Court Opinion

ID: 4044015
Source: CourtListenerOpinion
Date Created: 2016-09-28 23:30:04.244398+00
Date Added: 2024-06-11T14:29:46.758128
License: Public Domain

ACCEPTED
                                                                               03-14-00667-CV
                                                                                      3957344
                                                                     THIRD COURT OF APPEALS
                                                                                AUSTIN, TEXAS
                                                                          1/29/2015 6:24:01 PM
                                                                             JEFFREY D. KYLE
                                                                                        CLERK
                         NO. 03-14-00667-CV

                                                               FILED IN
                    IN THE COURT OF APPEALS             3rd COURT OF APPEALS
                FOR THE THIRD DISTRICT OF TEXAS             AUSTIN, TEXAS
                            AT AUSTIN                   1/29/2015 6:24:01 PM
                                                          JEFFREY D. KYLE
                                                                Clerk

             TEXAS COMMISSION ON ENVIRONMENTAL QUALITY,

                                               Appellant,

                                 v.

EXXON MOBIL CORPORATION, EXXONMOBIL OIL CORPORATION, PENNZOIL-QUAKER
               STATE COMPANY, AND SHELL OIL COMPANY,

                                               Appellees.

                        APPELLEES’ BRIEF

                                      John R. Eldridge
                                      State Bar No. 06513520
                                      john.eldridge@haynesboone.com
                                      Kent Rutter
                                      State Bar No. 00797364
                                      kent.rutter@haynesboone.com
                                      Adam Sencenbaugh
                                      State Bar No. 24060584
                                      adam.sencenbaugh@haynesboone.com
                                      HAYNES AND BOONE, LLP
                                      1221 McKinney Street, Suite 2100
                                      Houston, Texas 77010
                                      Telephone: (713) 547-2000
                                      Telecopier: (713) 547-2600

                    ATTORNEYS FOR APPELLEES

                  ORAL ARGUMENT REQUESTED
                DESIGNATION OF RECORD REFERENCES

      This brief follows the format suggested by the Bluebook: e.g., Clerk’s

Record: “(CR:1.)” See THE BLUEBOOK, A UNIFORM SYSTEM                     OF   CITATION,

Practitioners’ Note P.7 at 19-20 (Columbia Law Review Ass’n et al. eds., 18th ed.

2005).

      The record in this appeal consists of the clerk’s record, a supplemental

clerk’s record, the reporter’s record, and an administrative record. The

supplemental clerk’s record has been requested but has not yet been filed with the

Court. This brief uses the following conventions in citing the record:

      Clerk’s Record:

      CR:[page]

      Supplemental Clerk’s Record:

      Supp. CR at [page]

      Reporter’s Record:

      RR [vol]:[page]

      Administrative Record:

      AR [page]

                                        -i-
                                          TABLE OF CONTENTS

DESIGNATION OF RECORD REFERENCES ........................................................i 

TABLE OF CONTENTS .......................................................................................... ii 

TABLE OF AUTHORITIES ..................................................................................... v 

RESPONSE TO ISSUES PRESENTED ..................................................................ix 

STATEMENT OF FACTS AND PROCEDURAL HISTORY ................................ 1 

         A.       History of the Voda Site ........................................................................ 1 

         B.       EPA performs a removal action for the Voda Site................................ 1 

         C.       The TNRCC initiates the state listing process without
                  reevaluating the Voda Site following the EPA’s removal
                  action ..................................................................................................... 2 

         D.       The TCEQ issues an administrative order for the Voda Site
                  pursuant to § 361.188 and § 361.272 of the SWDA ............................. 3 

         E.       PRPs named in the AO seek a rehearing but are denied ....................... 5 

         F.       ExxonMobil and Shell challenge the AO in Travis County
                  District Court ......................................................................................... 6 

         G.       The parties engage in broad discovery at the trial court ....................... 7 

         H.       The State reverses course and argues that review is limited
                  to an administrative record .................................................................... 8 

SUMMARY OF THE ARGUMENT ........................................................................ 9 

STATEMENT OF JURISDICTION........................................................................ 11 

ARGUMENT ........................................................................................................... 13 

I.       Appellees’ Response to Appellant’s Issue One ............................................. 13 

         A.       The TCEQ can issue administrative orders under § 361.188
                  and § 361.272, and both share common attributes relevant
                  to this appeal ........................................................................................ 13 

                                                           - ii -
       B.     The statutory history of the SWDA shows that
              administrative orders have always been subject to the same
              appellate standards .............................................................................. 15 

              1.       The original SWDA established a permitting
                       program to regulate solid waste ................................................ 15 

              2.       Following the Congressional passage of CERCLA,
                       the Texas legislature amended the SWDA to create a
                       Texas state Superfund program ................................................ 17 

              3.       The codified SWDA makes all administrative orders
                       subject to these same provisions ............................................... 22 

       C.     The current statute does not create mutually exclusive
              orders with separate waivers of sovereign immunity.......................... 23 

              1.       Appearing in different sections using different
                       language does not make the orders mutually
                       exclusive.................................................................................... 23 

              2.       The SWDA appellate provisions distinguish between
                       appeals of Superfund orders and appeals of
                       permitting decisions, not separate kinds of Superfund
                       orders ......................................................................................... 25 

              3.       Forcing all appeals of Superfund orders into
                       § 361.321 creates an absurd result ............................................ 28 

II.    Appellees’ Response to Appellant’s Issue Two ............................................ 29 

       A.     The language of the AO demonstrates the Order was issued
              under § 361.188 and § 361.272 ........................................................... 30 

       B.     Counsel for the Executive Director asked the
              Commissioners to issue the Order under both § 361.188 and
              § 361.272 ............................................................................................. 32 

       C.     Understanding that the AO invokes both § 361.188 and
              § 361.272, the State described the Order as having been
              issued under both sections for years.................................................... 33 

                                                     - iii -
                  1.       The TCEQ repeatedly and unequivocally described
                           the AO as being issued under § 361.188 and
                           § 361.272 ................................................................................... 33 

                  2.       The State disclosed that it issued the AO under both
                           sections to obtain advantages of a § 361.272 order .................. 36 

         D.       Following the listing procedures of Subchapter F does not
                  insulate the AO from review under Subchapter K .............................. 37 

         E.       Reviewing an administrative order under § 361.322 does
                  not make Subchapter F redundant ....................................................... 38 

         F.       If the Commission is correct that it exceeded its powers
                  under the SWDA then the AO must be set aside ................................ 40 

III.     Appellees’ Response to Appellant’s Issue Three .......................................... 41 

         A.       Texas courts are not constitutionally limited to review of
                  administrative orders only as to matters of law .................................. 42 

         B.       The Texas Supreme Court’s decision in City of Waco is not
                  controlling in this SWDA appeal ........................................................ 48 

         C.       The APA provisions authorizing pure substantial evidence
                  review on a contested-case record are not applicable to this
                  appeal ................................................................................................... 53 

                  1.       The APA does not apply, and the available guidance
                           leads to different conclusions than advocated by the
                           State ........................................................................................... 54 

                  2.       Outside of threshold standing questions, pure
                           substantial evidence requires a true contested-case
                           record under the APA ............................................................... 55 

CONCLUSION ........................................................................................................ 59 

CERTIFICATE OF COMPLIANCE ....................................................................... 61 

CERTIFICATE OF SERVICE ................................................................................ 62 

APPENDIX .................................................................................................. Tabs A-K 

                                                          - iv -
                                   TABLE OF AUTHORITIES

CASES
Bland Indep. Sch. Dist. v. Blue,
   34 S.W.3d 547 (Tex. 2000)................................................................................. 11

City of El Paso v. Heinrich,
   284 S.W.3d 366 (Tex. 2009) .............................................................................. 12

City of Waco v. Tex. Comm’n on Envtl. Quality,
   346 S.W.3d 781 (Tex. App.—Austin 2011, pet. granted) .................................. 49

Collins v. Tex. Natural Res. Conservation Comm’n,
  94 S.W.3d 876 (Tex. App.—Austin 2002, no pet.) ............................................ 58

Commercial Life Ins. Co. v. Tex. State Bd. of Ins.,
  808 S.W.2d 552 (Tex. App.—Austin 1991, writ denied).......................43, 44, 46

County of Cameron v. Brown,
  80 S.W.3d 549 (Tex. 2002)................................................................................. 12

Dep’t of Pub. Safety v. Petty,
  482 S.W.2d 949 (Tex. Civ. App.—Austin 1972, writ ref’d n.r.e.) .................... 46

G.E. Am. Commc’n v. Galveston Cent. Appraisal Dist.,
   979 S.W.2d 761 (Tex. App.—Houston [14th Dist.] 1998, no pet.) ................... 56

Gen. Servs. Comm’n v. Little-Tex Insulation Co.,
  39 S.W.3d 591 (Tex. 2001)................................................................................. 42

Gerst v. Nixon,
  411 S.W.2d 350 (Tex. 1967) ........................................................................ 47, 48

Heat Energy Advanced Tech., Inc. v. W. Dallas Coal. for Envtl. Justice,
  962 S.W.2d 288 (Tex. App.—Austin 1998, pet. denied) ................................... 41

Heckman v. Williamson Cty.,
  369 S.W.3d 137 (Tex. 2012) .............................................................................. 11

Houston Mun. Emps. Pension Sys. v. Ferrell,
  248 S.W.3d 151 (Tex. 2007) .............................................................................. 11

                                                     -v-
Key Western Life Ins. Co. v. State Bd. of Ins.,
  350 S.W.2d 839 (Tex. 1961) ........................................................................40, 46

Macias v. Rylander,
  995 S.W.2d 829 (Tex. App.—Austin 1999, no pet.) ..............................44, 45, 46

Pub. Util. Comm’n of Tex. v. City Pub. Serv. Bd. of San Antonio,
  53 S.W.3d 310 (Tex. 2001)................................................................................. 41

R.R. Street & Co. v. Pilgrim Enters.,
   166 S.W.3d 232 (Tex. 2005) .............................................................................. 18

Ramirez v. Tex. State Bd. of Med. Exam’rs,
  927 S.W.2d 770 (Tex. App.—Austin 1996, no writ) .............................. 55, 56, 59

Smith v. Houston Chemical Services, Inc.,
  872 S.W.2d 252 (Tex. App.—Austin 1994, writ denied)................................... 57

Subaru of Am., Inc. v. David McDavid Nissan, Inc.,
   84 S.W.3d 212 (Tex. 2002)................................................................................. 40

Tex. Comm’n of Licensing & Regulation v. Model Search Am., Inc.,
   953 S.W.2d 289 (Tex. App.—Austin 1997, no writ) ......................................... 43

Tex. Dep’t of Ins. v. State Farm Lloyds,
   260 S.W.3d 233 (Tex. App.—Austin 2008, no pet.) .......................................... 59

Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc.,
   145 S.W.3d 170 (Tex. 2004) ........................................................................ 42, 43

Tex. Natural Res. Conservation Comm’n v. Sierra Club,
   70 S.W.3d 809 (Tex. 2002)........................................................................... 27, 28

Texas Comm’n on Envtl. Quality v. City of Waco,
   413 S.W.3d 409 (Tex. 2013) .......................................................................passim

Texas Comm’n on Envtl. Quality v. Kelsoe,
   286 S.W.3d 91 (Tex. App.—Austin 2009, pet. denied) ..................................... 57

Texas Comm’n on Envtl. Quality v. Sierra Club,
   No. 03-12-00335-CV, 2014 WL 7464085 (Tex. App.—Austin
   Dec. 30, 2014, no pet. h.) ........................................................................51, 52, 56

                                                    - vi -
Tex. State Bd. of Exam’rs in Optometry v. Carp,
   388 S.W.2d 409 (Tex. 1965) .............................................................................. 47

Texas Water Comm’n v. Dellana,
   849 S.W.2d 808 (Tex. 1993) .............................................................................. 51

TJFA, L.P. v. Tex. Comm’n on Envtl. Quality,
  No. 03-10-00016-CV, 2014 WL 3562735 (Tex. App.—Austin
  July 16, 2014, no pet.) (mem. op.) ...................................................................... 27

United Copper Indus., Inc. v. Grissom,
  17 S.W.3d 797 (Tex. App.—Austin 2000, pet. dism’d) ............................... 57, 58

United States v. Bestfoods,
  524 U.S. 51 (1998) .............................................................................................. 18

STATUTES
TEX. CONST. art. II, § 1 ............................................................................................ 42

42 U.S.C.A. §§ 9601–9628 ................................................................................17, 18

Tex. Health & Safety Code Ann. § 361.003(24) (West 2010) ....................17, 26, 28

Tex. Health & Safety Code Ann. § 361.061 (West 2010) ....................................... 27

Tex. Health & Safety Code Ann. § 361.181 (West 2010) ...........................13, 14, 31

Tex. Health & Safety Code Ann. § 361.188(b) (West 2010) ............................23, 24

Tex. Health & Safety Code Ann. § 361.271 (West 2010) ....................................... 15

Tex. Health & Safety Code Ann. § 361.272 (West 2010) ................................. 14, 31

Tex. Health & Safety Code Ann. § 361.274 (West 2010) ...................................5, 36

Tex. Health & Safety Code Ann. § 361.275 (West 2010) ....................................... 15

Tex. Health & Safety Code Ann. § 361.276 (West 2010) ................................. 15, 36

Tex. Health & Safety Code Ann. § 361.321 (West 2010) ....................................... 26

Tex. Health & Safety Code Ann. § 361.322 (West 2010) ................................ passim

Tex. Health & Safety Code Ann. § 401.229(a) (West 2010) .................................. 52

                                                        - vii -
Tex. Gov’t Code Ann. §§ 2001.171-178 (West 2008) ............................................ 54

Tex. Gov’t Code Ann. § 2001.060 (West 2008)...................................................... 55

Tex. Gov’t Code Ann. § 2001.174(2)(E) (West 2008) ............................................ 55

Tex. Water Code Ann. § 5.351 (West 2008) ........................................................... 51

SECONDARY SOURCES
Act approved June 2, 1969, 61st Leg., R.S., ch. 405,
  1969 Tex. Gen. Laws 1320, 1320 (repealed 1989) recodified by
  Act approved June 14, 1989, 71st Leg., R.S., ch. 678,
  1989 Tex. Gen. Laws 2230 ...........................................................................15, 16

Act approved June 15, 1973, 63rd Leg., R.S., ch. 576,
  1973 Tex. Gen. Laws 1595 ...........................................................................16, 17

Act approved June 12, 1985, 69th Leg., R.S., ch. 566,
  1985 Tex. Gen. Laws 2166 (repealed 1989) recodified by Act
  approved June 14, 1989, 71st Leg., R.S., ch. 678,
  1989 Tex. Gen. Laws 2230 ...............................................................18, 19, 20, 21

Act approved June 14, 1989, 71st Leg., R.S., ch. 703,
  1989 Tex. Gen. Laws 3212, 3217 ..................................................................21.22

BLACK’S LAW DICTIONARY at 857 (7th ed. 1999) ................................................... 11

                                                 - viii -
                  RESPONSE TO ISSUES PRESENTED

1.   The Solid Waste Disposal Act authorizes the Commission to issue
     administrative orders under § 361.188 and § 361.272, but these orders are
     not mutually exclusive and are subject to the same appellate provisions.

2.   The Commission issued the Administrative Order for the Voda Site pursuant
     to § 361.188 and § 361.272 of the Solid Waste Disposal Act.

3.   Judicial review of the Administrative Order for the Voda Site is
     constitutional and appropriate under § 361.322 of the Solid Waste Disposal
     Act.

                                    - ix -
           STATEMENT OF FACTS AND PROCEDURAL HISTORY

      A.     History of the Voda Site.

      The Voda Petroleum State Superfund Site (the “Voda Site”) is comprised of

approximately 6.12 acres located in Gregg County, Texas. (AR 2907.) The Voda

Site was historically used by Voda Petroleum, Inc. as an oil blending and recycling

facility from approximately 1981 to 1991, when all operations ceased and the Voda

Site was abandoned. (AR 3126.)

      B.     EPA performs a removal action for the Voda Site.

      In the mid-1990s, both the Environmental Protection Agency (“EPA”) and

the Texas Natural Resources Conservation Commission (“TNRCC”) investigated

the Voda Site to determine whether historic operations had resulted in the release

of hazardous substances. (AR 3030, 3495.) Part of this investigation included a

Hazard Ranking System (“HRS”) evaluation of the Voda Site. (AR 3495.) The

Voda Site scored a 23.6 on the HRS scale, which was too low to qualify the Voda

Site for the federal Superfund program. (AR 3509.) Instead, the Voda Site was

referred in 1995 to EPA for an immediate removal action. (AR 3029.) EPA’s

Action Memorandum seeking approval for the removal action indicated that

following the removal action “there is no potential for further state/local response.”

(AR 3033.)
      EPA conducted the removal action in 1996, removing drums and above-

ground tanks of grease and corrosive wastes, including associated soil exposed to

these materials, and backfilling with clean soil. (AR 943.) After the removal action

was complete, EPA’s contractor sampled both on-site soils and groundwater as

part of a post-removal assessment. (AR 3127.) EPA issued a post-closure report

confirming the removal action had abated the imminent and substantial

endangerment and that cleanup activities at the site had met EPA’s health based

cleanup standards for industrial land usage. (AR 3128, 61877.) Following its

removal action, EPA sought recovery of its costs and entered into Administrative

Orders of Consent (“AOCs”) with companies that EPA had named as potentially

responsible parties (“PRPs”) for the Voda Site. (AR 61852.)

      C.    The TNRCC initiates the state listing process without
            reevaluating the Voda Site following the EPA’s removal action.

      More than four years after the EPA removal action, the TNRCC proposed

the Voda Site for listing on the Texas Superfund registry on November 17, 2000.

(AR 46233.) Although the Texas Solid Waste Disposal Act (“SWDA”) requires

the agency to ensure that a site exceed 5.0 on the HRS score to proceed with

listing, the Commission did not re-score the Voda Site to account for the EPA’s

work. The Commission sent correspondence to certain entities it believed had

historically shipped materials to the Voda Site. (AR 16708-16710.) The

Commission asserted that each recipient was potentially responsible for

                                       -2-
environmental investigation and eventual remediation at the Voda Site, informed

the recipients of the proposed listing, and included a Notice of Opportunity to

Make Good Faith Offer to conduct a Remedial Investigation/Feasibility Study

(“RI/FS”). (AR 08614-46109.) Several parties submitted written comments and

objections, noting that there was no empirical data to support an imminent and

substantial endangerment finding and no evidence to support listing the Voda Site

on the Texas Superfund registry. (AR 41577-41578.) Nevertheless, the State went

forward with its plan to list the Voda Site.

      D.     The TCEQ issues an administrative order for the Voda Site
             pursuant to § 361.188 and § 361.272 of the SWDA.

      A draft administrative order for the Voda Site was docketed for

consideration by the Commissioners at a public meeting of the Texas Commission

on Environmental Quality (“TCEQ”)1 on February 10, 2010. (AR 51125.) Agenda

Item No. 7 pertaining to the Voda Site was described on the docket as

“Consideration of a Final Administrative Order (Final Order) pursuant to Texas

Health and Safety Code Sections 361.188 and 361.272 for the Voda Petroleum,

Inc. State Superfund Site….” (AR 51127.)

      Charmaine Backens, counsel for the Executive Director of the TCEQ,

presented the draft administrative order to the Commissioners. Following a brief

1
   The TNRCC was renamed the Texas Commission on Environmental Quality effective
January 1, 2004.

                                         -3-
description of the Voda Site and the remedial action plan, Backens testified that

“the Executive Director respectfully requests…recommends [sic] issuing this

Administrative Order for remedial activities at the Voda Petroleum State

Superfund Site pursuant to Chapter 361, sections 188 and 272 of the Health and

Safety Code.” (AR 50382.)

      A handful of PRPs were granted approximately five minutes to address the

Commissioners regarding the agenda item, in which they argued that the

Commissioners should delay issuance of the administrative order and allow the

parties to present evidence to the Commission. Id. Counsel for the Executive

Director responded that “the law governing this case does not provide for an

adjudicatory hearing at this time” and noted that the Executive Director would not

directly address these objections, suggesting instead that the appropriate remedy

was to appeal to the district court. Id.

      The Commissioners followed the Executive Director’s recommendation and

on February 12, 2010, issued a unilateral administrative order for the Voda Site

pursuant to § 361.188 and § 361.272 of the SWDA (“the Order” or “AO”).

(CR:29-108; App. A.) The AO named ExxonMobil and Shell—among

                                           -4-
approximately 350 other entities—as responsible parties and ordered them to pay

the TCEQ’s response costs for the Voda Site.2 Id.

      E.     PRPs named in the AO seek a rehearing but are denied.

      On March 12, 2010, Luminant, one of the parties named in the Order, filed a

motion for rehearing before the Commission. (AR 50870.) Luminant argued that

the SWDA requires the Commission to determine “the lowest cost alternative” to

remediate the Voda Site and that another contractor was prepared to present a

lower cost alternative remedy than had been adopted in the AO. (AR 50864.)

      The TCEQ filed a written response to Luminant’s motion, first noting that

“the Commission issued the Order pursuant to Tex. Health and Safety Code §§

361.188 and 361.272 (West 2010).” (AR 49650; App B.) The TCEQ then argued

that Luminant was “not entitled to a rehearing because the law did not afford it a

hearing in the first instance. See Tex. Health & Safety Code Ann. § 361.274 (West

2010) (stating that ‘[a]n administrative order under Section 361.272 does not

require prior notice or an adjudicative hearing before the commission’.”) Id. To

drive the point home, the TCEQ concluded that “[b]ecause the Order was issued

under Sections 361.272 and 361.188 (Administrative Order 1), it did not require an

adjudicative hearing before the Commission.” (AR 49650; App. B.) The

2
    Appellees ExxonMobil Oil Corporation, Exxon Mobil Corporation, Pennzoil-Quaker State
Company, and Shell Oil Company are referred to collectively as “ExxonMobil and Shell”
throughout this brief.

                                         -5-
Commission did not timely grant Luminant’s request, and the AO became final on

April 8, 2010. (AR 10.)

       F.     ExxonMobil and Shell challenge the AO in Travis County District
              Court.

       On March 26, 2010, ExxonMobil and Shell filed their First Amended

Original Petition appealing the AO in Travis County District Court. (CR:4-27;

App. C.)3 ExxonMobil and Shell challenged the AO and the Commission’s actions

under the SWDA as well as § 37.001 of the Texas Uniform Declaratory Judgments

Act. Id.

       On August 1, 2011, the TCEQ filed its Original Counter-Petition and Third-

Party Petition, pleading as follows: “On February 12, 2010, the TCEQ issued an

administrative order (“the Order”) under §§ 361.188 and 361.272 of the Act….”

(CR:127-169; App. D.)4 The TCEQ brought claims for cost recovery against

ExxonMobil and Shell and other PRPs pursuant to § 361.197(d), an action to

enforce the AO pursuant to § 361.321 and § 361.322(g), and injunctive relief

pursuant to § 361.273(2). Id.

3
    Appellees filed their Original Petition on March 12, 2010. On May 18, 2010, the Amended
Petition was consolidated, along with nine other lawsuits filed by a number of other entities
named in the AO, into a new cause number. (CR:112-26.)
4
    The TCEQ has filed two “supplements” to its Original Petition. However, neither supplement
revised or amended the factual allegations discussed herein. (CR:450-54.)

                                            -6-
       G.     The parties engage in broad discovery at the trial court.

       Although the State now argues judicial review of the AO is limited to the

TCEQ’s administrative record for the Voda Site, the State’s discovery at the trial

court contained no such limitations. Consistent with their live pleadings5 and each

successive amended scheduling order, the State spent nearly four years pursuing

unrestricted discovery on ExxonMobil and Shell. The Commission propounded

extensive written discovery on ExxonMobil and Shell and deposed corporate

representatives for both entities on a wide variety of issues outside the

administrative record. (Supp. CR at ___ [TCEQ’s First Written Discovery to

ExxonMobil Corporation and Shell Oil Company (served on September 10, 2013)];

(Supp. CR at ___ [TCEQ’s Notice of Oral Deposition (served on Sep. 20, 2012));

TCEQ’s Notice of Oral Deposition (served on Oct. 4, 2012)]. The State also

engaged in extensive expert discovery, designating eight state employee expert

witnesses, five non-state employee retained expert witnesses, and two non-retained

testifying expert witnesses which are presently identified to testify at trial, despite

the Commission’s current claim that the testimony of their own experts is actually

irrelevant to the case. (Supp. CR at ___ [Texas Commission on Environmental

Quality’s Amended Designation of Experts (served on May 10, 2013)].

5
    Shortly before filing current Plea to the Jurisdiction, the Commission filed a Motion for
Leave to Amend Pleadings and Discovery. However, the trial court denied this motion via
written order on July 31, 2014.

                                            -7-
      H.    The State reverses course and argues that review is limited to an
            administrative record.

      On December 18, 2013—approximately four years after the case was filed—

the State filed a Motion for Revised Discovery Control Plan in the trial court.

(Supp. CR at ___ [Texas Commission on Environmental Quality’s Motion for

Revised Discovery Control Plan (filed December 18, 2013)]. For the first time, the

State advanced the argument that: (1) the AO was issued exclusively under §

361.188 of the SWDA; and (2) judicial review of the AO was therefore limited to

an administrative record the TCEQ was in the process of compiling. Id. The trial

court rejected the State’s arguments and denied the motion via a written order

signed on March 4, 2014. The Commission did not seek an interlocutory appeal of

this order. (Supp. CR at ___ [Order Denying Motion for Revised Discovery

Control Plan (filed March 4, 2014)].

      On July 15, the TCEQ recycled precisely these same arguments in a new

motion restyled as a “Plea to the Jurisdiction.” (CR:729-859.) Although the State’s

newly-filed plea did not contain any reference to sovereign immunity—in fact, the

words “sovereign immunity” did not even appear in the motion—the State argued

in a reply brief and at a subsequent hearing that because the AO was a strictly “188

Order” judicial review under any standard other than § 361.321 violated the state’s

immunity from suit. Following a hearing on this motion, the trial court rejected the

motion via written order on October 1, 2014. (CR:1151.)

                                       -8-
                       SUMMARY OF THE ARGUMENT
      The TCEQ issued a unilateral administrative order pursuant to two

provisions of the SWDA—§ 361.188 and § 361.272—ordering ExxonMobil and

Shell to pay millions of dollars to reimburse the State’s remediation of the Voda

Site. ExxonMobil and Shell were denied an adjudicatory hearing prior to issuance

and had no opportunity to present experts or cross-examine the State’s witnesses

regarding liability. Instead, the TCEQ invoked its broadest powers under the

SWDA to block any hearing and attempted to hold persons named in the order

jointly and severally liable for response costs. For nearly four years, these were

uncontested procedural facts while the parties litigated the case at the district court.

      Following the Texas Supreme Court’s decision in City of Waco, the TCEQ

made a strategic decision to expand the boundaries of that holding in this case.

Although the AO was subject to judicial review based on a preponderance of the

evidence at the district court, the State attempts to whitewash the AO’s history and

the Commission’s own pleadings by claiming that it actually issued the Order

solely under § 361.188, which the State believes now entitles it to pure substantial

evidence review. But regardless of whether the Commission issued the Order

pursuant to § 361.188, § 361.272, or both, the SWDA presents the same appellate

remedy for both orders, and nothing from the statutory history or current text

indicates that these orders are mutually exclusive. Even if the SWDA did intend to

                                         -9-
split appellate remedies between different SWDA administrative orders, there is no

doubt the TCEQ issued the AO for the Voda Site under § 361.272, and therefore

§ 361.322 is the appropriate appellate provision.

      The Texas Supreme Court’s decision in City of Waco does nothing to change

this analysis. The City of Waco holding is limited to a threshold determination of

whether a third-party seeking to intervene in a permitting case is an “affected

person” sufficient to trigger a contested-case hearing. That case has no application

to an appeal by parties named responsible in a unilateral administrative order,

particularly when the relevant statute already provides an appropriate standard of

review.

      After spending an enormous amount of time and money prosecuting this

case as both a § 361.188 and § 361.272 Order, the State is now erroneously

emboldened by City of Waco to believe it can simply issue Superfund enforcement

orders demanding millions of dollars in response costs without an agency hearing

or de novo review at the district court. Instead, the State suggests that pure

substantial evidence review of its own record is sufficient. But City of Waco deals

solely with a permitting issue rather than the more onerous cost recovery

enforcement. Moreover, the plain language of the SWDA unequivocally waives

sovereign immunity to judicial review of the Order and provides for de novo

review based on a preponderance of the evidence. In this type of action, City of

                                       - 10 -
Waco does nothing to relieve the State of its ultimate burden to prove liability.

Potentially responsible parties are entitled to their day in court, and the trial court

has the power to hear their claims under a preponderance of the evidence standard.

                       STATEMENT OF JURISDICTION
      ExxonMobil and Shell believe the Court is without jurisdiction to hear this

appeal. A plea to the jurisdiction challenges the trial court’s power to adjudicate

the subject matter of the controversy. Heckman v. Williamson Cty., 369 S.W.3d
137, 149 (Tex. 2012); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.

2000). Black’s Law Dictionary defines “subject-matter jurisdiction” as

“[j]urisdiction over the nature of the case and the type of relief sought; the extent to

which a court can rule on the conduct of persons or the status of things.” BLACK’S

LAW DICTIONARY at 857 (7th ed. 1999). In the context of judicial review of an

administrative order, the issue of sovereign immunity requires an examination of

whether a statute provides a right to judicial review of agency action. Houston

Mun. Emps. Pension Sys. v. Ferrell, 248 S.W.3d 151, 158 (Tex. 2007).

      There is no question that the SWDA authorizes judicial review of the AO in

this case and that the State has waived immunity from suit. The trial court has the

power to either uphold or set aside the Order and to award attorneys’ fees to the

prevailing party. What the parties actually dispute is precisely what evidence the

trial court may consider in reviewing the Order. The State asserts the trial court is

                                         - 11 -
limited to the Commission’s administrative record, while ExxonMobil and Shell

argue that the trial court can consider new evidence through a trial de novo. The

State’s plea is not a challenge to the trial court’s subject matter jurisdiction, but

instead a maneuver to set the procedures the trial court will use to enter an order

that it unquestionably has the power to enter.

      Assuming this evidentiary question did implicate the court’s subject matter

jurisdiction, the State cannot maintain a plea to the jurisdiction in this case because

its own pleadings defeat its claim. In deciding a plea to the jurisdiction, the court

must not weigh the claims’ merits but should look to the pleadings and determine

if they allege facts that affirmatively demonstrate the court’s jurisdiction to hear

the case. City of El Paso v. Heinrich, 284 S.W.3d 366, 378 (Tex. 2009); County of

Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). The State’s live pleadings

indicate that “[t]he Texas Legislature has defined the sole method for appealing the

Order at Tex. Health & Safety Code § 361.322.” (CR:675-87: App. E.)

ExxonMobil and Shell agree, as their Amended Petition invokes § 361.322 and

challenges the TCEQ to prove—by a preponderance of the evidence—that

Appellees are liable for the elimination of any release at the Voda Site. Therefore,

the court need not look past the parties’ own pleadings to determine that they have

alleged facts that affirmatively demonstrate both that the Court has jurisdiction to

                                        - 12 -
hear this case and that the appropriate standard of review and burden of proof can

be found in § 361.322 of the SWDA.

                                   ARGUMENT

I.    Appellees’ Response to Appellant’s Issue One.

      The Texas Solid Waste Disposal Act (“SWDA” or “Act”) does not create

mutually exclusive Superfund orders with separate waivers of sovereign immunity.

Although the Act empowers the Commission to issue an administrative order

before a remedial investigation/feasibility study has been conducted or at the

conclusion of the state Superfund listing process, either type of administrative

order is subject to the same appellate provisions.

      A.     The TCEQ can issue administrative orders under § 361.188 and
             § 361.272, and both share common attributes relevant to this
             appeal.

      The SWDA permits the Commission to issue an administrative order under

Subchapter F regarding a site “that may constitute an imminent or substantial

endangerment to public health and safety or the environment due to a release or

threatened release of hazardous substances into the environment.” Tex. Health &

Safety Code Ann. § 361.181 (West 2010). Pursuant to the Act, an Order issued

under § 361.188 comes at the conclusion of the listing process, which would

include investigating the site proposed for listing and recommending a remedial

action to cleanup any hazardous substances identified. Id. Such an order lists the

                                        - 13 -
identified site on the state registry and provides the necessary details regarding the

proposed remedy for the hazardous substances found during the investigation. Id.

      The Act also permits the Commission to issue an administrative order under

Subchapter K “to a person responsible for solid waste if it appears that there is an

actual or threatened release of solid waste that presents an imminent and

substantial endangerment to the public health and safety or the environment.” Id. at

§ 361.272. This administrative order need not necessarily come at the conclusion

of the Commission’s investigation of a site believed to harbor hazardous

substances. Instead, the order issued under § 361.272 must only identify a party

allegedly responsible for “solid waste”—not hazardous substances—and order the

party “to take any action necessary to provide and implement a cost effective and

environmentally sound remedial action plan designed to eliminate the release or

threatened release.” Id. at § 361.272(b)(2).

      Although the power to issue administrative orders is found in two separate

sections of the SWDA, the two provisions are not mutually exclusive. Nothing in

the statute forbids the Commission from issuing an administrative order listing a

site alleged to contain “hazardous substances” and to issue that same order to a

person responsible for “solid waste” that presents an imminent and substantial

endangerment. Moreover, both types of orders share elements outlined in

Subchapters I, K, and L of the Act, including but not limited to:

                                        - 14 -
    The four-part definition of a “person responsible for solid waste.” Tex.
     Health & Safety Code Ann. § 361.271 (West 2010);

    Statutory defenses to liability. Id. at § 361.275;

    Apportionment of liability among potentially responsible parties. Id. at
     § 361.276; and

    An appellate provision. Id. at § 361.322.

      Although the power to issue administrative orders can be found in two parts

of the SWDA—and orders under each subsection can arise at different times in

response to different threats to human health or the environment—the essential

features relevant to this appeal remain the same, and nothing within the SWDA

makes § 361.188 and § 361.272 orders mutually exclusive.

      B.    The statutory history of the SWDA shows that administrative
            orders have always been subject to the same appellate standards.

            1.     The original SWDA established a permitting program to
                   regulate solid waste.

      The SWDA was enacted in 1969 to control “the collection, handling,

storage, and disposal” of solid waste. Act approved June 2, 1969, 61st Leg., R.S.,

ch. 405, 1969 Tex. Gen. Laws 1320, 1320 (repealed 1989) recodified by Act

approved June 14, 1989, 71st Leg., R.S., ch. 678, 1989 Tex. Gen. Laws 2230 (App.

F.) In its original form, the SWDA divided powers between two state agencies—

the Texas State Department of Health was tasked with regulating municipal solid

                                        - 15 -
waste while the Texas Water Quality Board was assigned industrial solid waste. Id.

at 1321 (App. F.) The original statute gave broad power to these agencies to:

         “require and issue permits authorizing and governing the
          operation and maintenance of sites used for the disposal of solid
          waste,” including the power to “revoke or amend any permit
          issues.” Id. at 1322. (App. F.); and

         “establish minimum standards of operation for all aspects of
          the management and control” of solid waste, including the
          “collection, handling, storage, and disposal by incineration,
          sanitary landfill, composting, or other method.” Id. at 1323. (App.
          F.)

      To effectuate enforcement, the Act imposed civil penalties for entities that

engaged in the “collection, storage, handling, or disposal of solid waste, or the use

or operation of a site for the disposal of solid waste, in violation of the Act.” Id. at

1326-27. (App. F.) Any “person affected by any ruling, order, decision, or other act

of the department or the board” enjoyed the right to “appeal by filing a petition in

the district court of Travis County.” Id. at 1328. (App. F.) The original SWDA

contained no definition for the term “person affected,” opening the door for a

broad judicial interpretation of standing to appeal permitting decisions. However,

the Legislature addressed this shortcoming in the following session, adding a

definition for “person affected” as:

      “any person who is a resident of a county in which a site, facility, or
      plant is to be located including any person who is doing business or
      owns land in the county or adjacent or contiguous county and any
      local government. Such person affected shall also demonstrate that he
      has suffered or will suffer actual injury economic damage.”

                                         - 16 -
Act approved June 15, 1973, 63rd Leg., R.S., ch. 576, 1973 Tex. Gen. Laws 1595

(current version at Tex. Health & Safety Code Ann. § 361.003(24) (West 2010))

(App. G.)

      Missing from the original statute was the power to issue administrative

orders like the Order at issue in this case. As enacted, the SWDA did not empower

the state to clean up sites contaminated with solid waste or hazardous substances

and to order persons the state believed responsible for solid waste to execute and/or

fund such a cleanup. Instead, the statute regulated solid waste through the

permitting program. Although a person affected by a permitting decision could

seek judicial review under 8(g), this clause was not applicable to an administrative

order to clean up a contaminated site simply because the SWDA did not grant the

power to issue any such order under the terms of the original act.

             2.    Following the Congressional passage of CERCLA, the
                   Texas legislature amended the SWDA to create a Texas
                   state Superfund program.

      The United States Congress passed the Comprehensive Environmental

Response, Compensation, and Liability Act (“CERCLA”) in 1980, giving the

federal government the power to identify parties responsible for the release of

hazardous substances and compel those parties to clean up the sites via

administrative orders or civil actions. 42 U.S.C.A. §§ 9601–9628. CERCLA also

permitted the government to clean up contaminated sites using the Superfund—a

                                       - 17 -
trust fund—and then recover costs from responsible parties through civil litigation.

Id. CERCLA was triggered by the presence of abandoned hazardous waste dump

sites like the infamous Love Canal site in New York. A critical feature of

CERCLA was the creation of a broad liability scheme under which parties who

arranged for disposal of waste (i.e, a dump site’s customers) and transporters of the

waste could be found jointly and severally liable for all remediation costs. No

longer was liability limited to the site’s permit holder or operator. United States v.

Bestfoods, 524 U.S. 51, 55-56 (1998).

      Five years after the passage of CERLCA, the Texas Legislature created the

state’s own Superfund program through a 1985 amendment to the SWDA. Act

approved June 12, 1985, 69th Leg., R.S., ch. 566, 1985 Tex. Gen. Laws 2166

(repealed 1989) recodified by Act approved June 14, 1989, 71st Leg., R.S., ch.

678, 1989 Tex. Gen. Laws 2230 (App. H.). Like CERCLA, the new provisions of

the SWDA created a broad liability scheme under which those who arrange for

disposal of waste or transport of waste can be held liable for remediation costs at

sites they do not own or operate. See, e.g., R.R. Street & Co. v. Pilgrim Enters.,

166 S.W.3d 232, 238 (Tex. 2005) (“SWDA, like CERCLA, provides mechanisms

for the clean-up of solid waste and for both governmental entities and private

parties to recover clean-up costs from those responsible for the waste.”). However,

instead of having the new liability scheme stand separately from the existing solid

                                        - 18 -
waste permitting statute as Congress had done, the Texas Legislature embedded

these new provisions into the SWDA.

         The 1985 amendments expanded the SWDA beyond permitting and

empowered the state to issue administrative orders to persons responsible for solid

waste,

         “restraining such person or persons from allowing or continuing the
         threatened release and requiring those persons to take actions
         necessary to provide and implement a cost effective and
         environmentally sound remedial action plan to designed to eliminate
         the release or threatened release.”

Act approved June 12, 1985, 69th Leg., R.S., ch. 566, 1985 Tex. Gen. Laws 2166,

2176 (repealed 1989) recodified by Act approved June 14, 1989, 71st Leg., R.S.,

ch. 678, 1989 Tex. Gen. Laws 2230 (App. H.)

         The 1985 amendments further empowered the state to survey and list “every

hazardous waste facility which may constitute an imminent and substantial

endangerment to public health and safety or the environment” and provided

guidelines for the “cleanup of a facility identified.” Id. at 2178, 2180 (App. H.)

Within those guidelines, the state was empowered as follows:

         “whenever the department of water resources finds that there exists an
         actual or threatened release of hazardous wastes at a hazardous facility
         listed on the registry that presents an imminent and substantial
         endangerment to the public health and safety of the environment, it
         may order the owner and/or operator of such facility and/or any other
         person responsible for the release or threatened release at such facility
         (A) to develop a remedial action program, subject to the approval of
         the department of water resources, at such facility; and (B) to

                                          - 19 -
      implement such program within reasonable time limits specified in the
      order.”

Id. at 2180 (App. H.) To ensure the same basic elements for all administrative

orders issued under the new amendments, the statute made clear that “[t]he

provisions in Sections 8(g), 9, 10, and 11 of this Act relating to administrative

orders shall apply to orders issued pursuant to this paragraph.” Id. (App. H.)

      The 1985 amendments also added a new appellate provision to the SWDA to

exclusively cover administrative orders issued pursuant to the new Superfund

program. While leaving the earlier appellate provision for the permitting program

unchanged, the new Section 9 placed the burden of proof on appeal of an

administrative order squarely on the state, providing that:

      “The district court shall uphold an administrative order issued
      pursuant to Section 8(g) if the department or the department of water
      resources, by a preponderance of the evidence, proves: (1) that there is
      an actual or threatened release of solid waste that is an imminent and
      substantial endangerment to the public health and safety or the
      environment; and (2) that the person made subject to the
      administrative order is liable for the elimination of the release or
      threatened release, in whole or in part.”

Id. at 2177 (App. H.)

      In short, the 1985 amendments established the modern state Superfund

program, empowering the state to issue administrative orders and seek to recover

its costs under a handful of different circumstances, but made both types of orders

                                        - 20 -
subject to certain procedural baselines, found in sections 8(g), 9, 10, and 11 of the

revised statute, including:

    A standard definition for persons responsible for solid waste. Id. at 2176
     (App. H.);

    Allowing persons responsible for solid waste to prove a statutory defense by
     a preponderance of the evidence. Id. (App. H.);

    Allowing persons responsible for solid waste to prove that the release is
     divisible, therefore avoiding the consequences of joint and several liability.
     Id. at 2176-77 (App. H.); and

    Granting the right to appeal an administrative order and placing the burden
     on the state based on a preponderance of the evidence for the appeal. Id. at
     2177 (App. H.)

      Nothing in the 1985 amendments gave the State the power to issue

administrative orders under the new Superfund program without these provisions.

      Subsequent amendments to the SWDA further clarified both the burden of

proof for an appeal of an administrative order and the class of persons who could

file such an appeal. The Legislature narrowed the standing for appeal of an

administrative order in 1989 to “any person subject to an administrative order

under 8(g),” replacing earlier language that effectively allowed any person to file a

petition appealing an administrative order issued under that provision. Act

approved June 14, 1989, 71st Leg., R.S., ch. 703, 1989 Tex. Gen. Laws 3212, 3217

(current version at Tex. Health & Safety Code Ann. § 361.322 (West 2010)) (App.

I.) The same bill clarified the standard of review for challenging the remedy

                                       - 21 -
selection, adding a subsection “(h) If the appropriateness of the selected remedial

action is contested in the appeal of the administrative order, the remedial action

shall be upheld unless the court determines that the remedy is arbitrary or

unreasonable.” Id. at 3217 (App. I.) The bill also revised subsection (e), clarifying

that an appeal “does not prevent the state agency issuing the administrative order

from proceeding with the remedial action program under Subchapter F unless the

court enjoins the remedial action under its general equity jurisdiction.” Id. (App. I.)

             3.     The codified SWDA makes all administrative orders subject
                    to these same provisions.

      Following codification, the SWDA retained the same procedural framework

outlined above. The procedure to list a site on the state Superfund list was

reorganized under “Subchapter F: Registry and Cleanup of Certain Hazardous

Waste Facilities.” The procedural building blocks of an administrative order

discussed above were reorganized into “Subchapter I: Enforcement, Administrative

Orders Concerning Imminent and Substantial Endangerment.” The appellate

provision was reorganized under “Subchapter K. Appeals; Joinder of Parties.” The

Commission retained the power to issue an administrative order either before or

after the listing process, but all administrative orders retained these elements.

                                         - 22 -
      C.     The current statute does not create mutually exclusive orders with
             separate waivers of sovereign immunity.

      The State’s brief traces largely the same statutory history, but erroneously

concludes that the Legislature intended to create “two types of Superfund order”

that the State argues are “separate and distinct.” (Appellant’s Brief at 9.) The State

argues that the two types of orders are mutually exclusive for three reasons:

(1) they are contained in different sections; (2) they are expressed in different

language; and (3) they are subject to different appellate provisions that present an

irreconcilable conflict. Id. But as discussed below, none of these factors support

the conclusion that the Legislature intended to create mutually exclusive Superfund

orders with separate appellate provisions, and the statutory history combined with

the current structure of the Act lead to precisely the opposite conclusion.

             1.    Appearing in different sections using different language
                   does not make the orders mutually exclusive.

      Although the Act empowers the TCEQ to issue orders in more than one part

of the statute, the text is clear that parties named in both § 361.188 and § 361.272

orders are subject to certain procedural protections which the TCEQ cannot

revoke. This was true when the 1985 amendments creating the Superfund program

were passed and remains true through the modern codification of the statute.

Pursuant to § 361.188(b), “the provisions in Subchapters I, K, and L relating to

administrative orders apply to orders issued under this section.” Tex. Health &

                                        - 23 -
Safety Code Ann. § 361.188(b) (West 2010). This is the same cross-reference that

was in the statute when it was enacted in 1985. This incorporation of Subchapters

I, K, and L into “orders issued under this section” is not limited to what the State

self-servingly identifies as “relevant provisions.” (Appellant’s Brief at 16.) Instead

it is open ended and inclusive, and demonstrates that the Legislature intended all

“administrative orders” of the SWDA to share common procedural attributes,

including the same appellate provisions. Tex. Health & Safety Code Ann.

§ 361.188(b) (West 2010).

      The structural link between orders issued under § 361.188 and § 361.272 is

not limited to this provision. Just as section § 361.188 of Subchapter F directly

incorporates Subchapters I, K, and L, a similar link between the two types of

orders is found within Subchapter K at § 361.322. That appellate provision—

limited to administrative orders issued under the Superfund program—states that

“[t]he filing of the petition does not prevent the commission from proceeding with

the remedial action program under Subchapter F unless the court enjoins the

remedial action under its general equity jurisdiction.” Tex. Health & Safety Code

Ann. § 361.322(e) (West 2010). Therefore, if the Commission issues an

administrative order before it has commenced with the remedial action program

under § 361.272, that cleanup program can continue just as it would have if the

order was issued under § 361.188 during the pendency of the appeal.

                                        - 24 -
      Although they appear in different sections of the Act and are expressed in

different language, § 361.188 and § 361.272 do not create mutually exclusive

orders. Instead, regardless of whether a Superfund order comes at the conclusion of

the listing and remedy selection process through § 361.188 or instead prior to the

remedial action program through § 361.272, the SWDA guarantees certain

protections to persons the state believes are responsible for solid waste.

             2.     The SWDA appellate provisions distinguish between
                    appeals of Superfund orders and appeals of permitting
                    decisions, not separate kinds of Superfund orders.

      The State contends that because there are two separate appellate provisions

contained within the SWDA, the Legislature must have intended that a different

appellate provision would apply to each type of Superfund order, and thus the

orders are mutually exclusive. However, the State’s argument misunderstands the

structure of the SWDA and the role both provisions play in the context of the entire

Act. The two appellate provisions are principally aimed at different types of orders

or actions of the Commission. Therefore, they grant appellate remedies to different

categories of parties, establish different timetables to perfect an appeal, and feature

different burdens of proof and standards of review.

      Section 361.321 of Subchapter K tracks the language of the 1969 Act and

states that “a person affected by a ruling, order, decision, or other act of the

commission may appeal the action by filing a petition in a district court of Travis

                                        - 25 -
County.” Tex. Health & Safety Code Ann. § 361.321(a) (West 2010). The appeal

must be perfected within 30 days of the date that the offending act of the

Commission occurs. Id. at § 361.321(b). The provision grants an appellate remedy

not limited to formal commission orders, but to virtually any action by the

Commission. An appellant under § 361.321 is not a named party subject to an

administrative order, but instead is “a person affected” by the actions of the

Commission. Id. at § 361.321(b). The SWDA defines a “person affected” as one

who “has suffered or will suffer actual injury or economic damage and, if the

person is not a local government: (A) is a resident of a county, or a county adjacent

or contiguous to the county, in which a solid waste facility is to be located; or

(B) is doing business or owns land in the county or adjacent or contiguous county.”

Tex. Health & Safety Code Ann. § 361.003(24) (West 2010).

      The modern § 361.321 does not state that it is limited to—or even applicable

to—administrative orders for Superfund cases. Id. at § 361.321(b). This is entirely

consistent with its statutory history, as the provision was adopted with the original

version of the SWDA in 1969, which did not empower the state to identify parties

responsible for the release of solid waste and to compel those parties to clean up

waste sites. As discussed above, the codified SWDA retains a solid waste

permitting program distinct from the Superfund program that allows the

Commission to issue permits for the construction, operation, and maintenance of

                                       - 26 -
solid waste disposal facilities. See Tex. Health & Safety Code Ann. § 361.061

(West 2010). Hence, § 361.321 is directed at parties aggrieved by this permitting

process who can show that they meet the economic injury test under the statute—it

is not directed at parties named liable in Superfund orders. Both its statutory

history and its current role in the SWDA demonstrate clear legislative intent that

§ 361.321 is the appellate provision for the permitting program, not the Superfund

program. See, e.g., Tex. Natural Res. Conservation Comm’n v. Sierra Club, 70
S.W.3d 809, 811 (Tex. 2002) (appeal of solid waste permitting decision under

§ 361.321 following contested-case hearing at the agency); TJFA, L.P. v. Tex.

Comm’n on Envtl. Quality, No. 03-10-00016-CV, 2014 WL 3562735, at *1 (Tex.

App.—Austin July 16, 2014, no pet.) (mem. op.) (same).

      In contrast, § 361.322 applies to “an administrative order issued under

361.272” of the SWDA. Tex. Health & Safety Code Ann. § 361.322(a) (West

2010). Instead of 30 days under § 361.321(b), the appeal must be perfected within

45 days of receipt of the order. Id. The section does not authorize appeals of solid

waste permits or other Commission actions, but is limited to administrative orders

issued under the Superfund program. Id.; see also Sierra Club, 70 S.W.3d at 812

(noting that § 361.322 was “not applicable” to appeal of permit decision). Instead

of restricting appeals to a “person affected” by a Commission action as defined in

the statute, § 361.322 is limited to a person “subject to” the administrative order on

                                        - 27 -
appeal. Id. This too is consistent with the statutory history of the SWDA, as the

Legislature created both the power to issue administrative Superfund orders and

the right to appeal those orders within the 1985 amendments, granting the same

appellate remedy for all Superfund orders. The State has never enjoyed the power

to issue these administrative orders without the appellate provisions of the modern

§ 361.322.

             3.    Forcing all appeals of Superfund orders into § 361.321
                   creates an absurd result.

      Ignoring the plain language of § 361.188(b)—which incorporates “all

provisions relating to administrative orders” into § 361.188 orders—the State

suggests that “[t]he proper reading of this section is that the relevant provisions of

the other subchapters apply to Section 361.188 orders, to the extent they do not

create contradictions or absurd results.” (Appellant’s Brief at 16.) Yet at the same

time, the State asks the Court to force Superfund appeals into an appellate

provision explicitly limited to entities surrounding the geographic area in which “a

solid waste facility is to be located.” Tex. Health & Safety Code Ann.

§ 361.003(24) (West 2010). But the statutory history of both appellate provisions

shows that the Legislature never intended to force appeals of Superfund orders into

the preexisting regime for permitting decisions. The separate appellate provisions

of Subchapter K were adopted alongside their respective programs—the permitting

                                        - 28 -
program and the Superfund program—to provide appellate remedies to parties

aggrieved by either type of agency action.

      Taking the State’s argument to its logical conclusion, a party’s standing to

appeal a Superfund order under the SWDA would not depend on whether or not

the entity was named in the administrative order per § 361.322, but instead would

turn on the entity’s geographic nexus to the site at issue pursuant to § 361.321.

Assuming the site in question even qualified as a “solid waste facility” under the

Act, parties who owned land or did business within the defined geographic zone

would have a right to appeal, while parties missing this geographic link would

have no clear appellate remedy. At the same time, the Commission is free to

identify and name in an administrative order persons it believes responsible for

solid waste without regard to their geography, and order them to remediate the site

or pay the State’s response costs. No such concept exists in the CERLCA

jurisprudence, and the Legislature never intended to create such an anomalous

appellate scheme for the Texas program.

II.   Appellees’ Response to Appellant’s Issue Two.

      The Administrative Order for the Voda Site was issued under both § 361.188

and § 361.272 of the SWDA. The AO is directed at both solid wastes and

hazardous substances, and plainly invokes the TCEQ’s powers under § 361.188

and § 361.272. Immediately before and after the AO was issued, the Commission

                                       - 29 -
unambiguously declared that it issued the Order pursuant to both sections of the

Act, and the TCEQ has unequivocally pled the same procedural facts throughout

this litigation. In fact, the Commission’s live pleadings state that the Order was

issued under both § 361.188 and § 361.272 and that the sole method for appealing

the Order resides at § 361.322. Therefore, even if the State were correct that

§ 361.188 and § 361.272 orders are subject to different appellate provisions, the

AO for the Voda Site was issued under § 361.272, making application of § 361.322

appropriate for this Order.

      A.     The language of the AO demonstrates the Order was issued under
             § 361.188 and § 361.272.

      The language used by the TCEQ in the AO demonstrates the Commission’s

intent and action to issue the Order under both § 361.188 and § 361.272. The very

first paragraph of the AO invokes the Commission’s power to issue the Order “as

authorized by Sections 361.188 and 361.272 of the Act.” (CR:29; App. A.) In

detailing the Chemicals of Concern at the Voda Site, the AO specifically invokes

“Sections 361.271 through 361.277 and 361.343 through 361.345” of the SWDA.

(CR:48; App. A.) The Order also names ExxonMobil and Shell as “responsible

parties (‘RPs’) pursuant to Section 361.271 of the Act” (CR:29; App. A.) and

announces the TCEQ’s conclusion that the “release or threatened release… has not

been proven to be divisible pursuant to Section 361.276 of the Act.” (CR:50; App.

A.) In the event there are disagreements between the Agreeing Respondents and

                                      - 30 -
the Executive Director, the AO states such disagreements will be handled pursuant

to “Sections 361.321 and/or Sections 361.322 of the Act.” (CR:86; App. A.) And

the AO orders Respondents to preserve records “relating to each Respondent’s

potential liability or to any other person’s potential liability for the Site under

Section 361.271 of the Act.” (CR:78; App. A.) All of these provisions flatly

contradict the State’s position that the AO was issued solely under § 361.188.

      The dual nature of the AO is even more apparent when looking at the

materials the Commission alleges are present at the Voda Site. Subchapter F of the

SWDA authorizes the TCEQ to identify and list sites where the release of

“hazardous substances” has allegedly endangered public health. Tex. Health &

Safety Code Ann. § 361.181(a) (West 2010). The term “solid waste” does not

appear within §§ 361.181-361.188 of the SWDA, which instead is focused

exclusively on the listing, cleanup, and remediation of sites containing “hazardous

substances.” Id. In contrast, Subchapter K authorizes the Commission to issue an

order to a person responsible for “solid waste” if a release of “solid

waste…presents an imminent and substantial endangerment.” Id. at § 361.272.

This provision makes no mention of hazardous substances.

      The AO for the Voda Site is not limited to “hazardous substances” as would

be expected for an order limited solely to § 361.188, but instead declares parties

responsible for “the solid waste and/or hazardous substances at the Site.” (CR:29;

                                       - 31 -
App. A.) The AO declares that certain substances “which are found at the Site, are

solid wastes as defined in Section 361.003(34) of the Act” and further alleges that

the PRPs are responsible for “solid wastes [that] were stored, processed, disposed

of, or discarded at the Site.” (CR:50; App. A.)

      B.     Counsel for the Executive Director asked the Commissioners to
             issue the Order under both § 361.188 and § 361.272.

      The State argues that “the TCEQ intended to issue a Section 361.188 order.”

(Appellant’s Brief at 23.) Yet the words of the counsel for the Executive Director

of the TCEQ—immediately before, during, and immediately after the AO was

issued—demonstrate the Commission’s intent to issue the AO pursuant to both

§ 361.188 and § 361.272, and a clear understanding that the TCEQ had done just

that. The Commission’s agenda item for the Voda Site was docketed as

“Consideration of a Final Administrative Order (Final Order) pursuant to Texas

Health and Safety Code Sections 361.188 and 361.272 for the Voda Petroleum,

Inc. State Superfund Site….” (AR 51127: App. J (emphasis added).) When counsel

for the Executive Director presented the administrative order to the Commission,

she asked the Commissioners to issue the order “pursuant to Chapter 361, sections

188 and 272 of the Health and Safety Code.” (AR 50382 (emphasis added).) And

when the TCEQ opposed Luminant’s rehearing request, it argued that “[b]ecause

the Order was issued under Sections 361.272 and 361.188 (Administrative Order

                                       - 32 -
1), it did not require an adjudicative hearing before the Commission.” (AR 49650;

App. B (emphasis added).)

      C.     Understanding that the AO invokes both § 361.188 and § 361.272,
             the State described the Order as having been issued under both
             sections for years.

      Since this case was filed in 2010, the State has understood the true nature of

the Order by repeatedly and unequivocally pleading that the AO was issued under

both § 361.188 and § 361.272 of the SWDA. These statements appeared in the

TCEQ’s Original Counter-Petition and Third-Party Petition, Response to Plea in

Abatement, Motions for Entry of Default, and their Motions for Entry of Agreed

Final Judgment. (CR:127-69; Tab D.) Following denial of the TCEQ’s Motion for

Leave to Amend, they remain the Commission’s live pleading in the case. The

State’s claim that the Commission intended to issue a purely § 361.188 Order is

flatly contradicted multiple times by the text of the Order and by the Commission’s

own justification for its actions.

             1.     The TCEQ repeatedly and unequivocally described the AO
                    as being issued under § 361.188 and § 361.272.

      In its Original Counter-Petition and Third-Party Petition, the State pled that:

“On February 12, 2010, the TCEQ issued an administrative order (“the Order”)

under §§ 361.188 and 361.272 of the Act….” (CR:158; App. D.) The State further

pled that ExxonMobil and Shell “were ‘liable for the elimination of the release or

threatened release, in whole or in part,’ within the meaning of TEX. HEALTH &

                                       - 33 -
SAFETY CODE § 361.322(g)” and that “the Order should be upheld pursuant to

TEX. HEALTH & SAFETY CODE §§ 361.321 and 361.322(g).” (CR:164; App.

D.)

         The State unequivocally repeated the same description of the AO—as an

order issued under § 361.188 and § 361.272—in myriad other filings at the trial

court:

            On October 20, 2011 Third-Party Defendant Howard Frelich filed a
             Plea in Abatement along with his Original Answer. In its Response to
             this Plea in Abatement, the TCEQ stated that “The Order was issued
             pursuant to two sections of the Texas Solid Waste Disposal Act:
             Tex. Health & Safety Code §§ 361.188 & 361.277 (sic).” As proof
             that the AO relied on both sections, the State cited to the very first
             paragraph of the AO—“Order sec. I at 1.” (Supp. CR at ___
             [TCEQ’s Response to Plea in Abatement by Third-Party Defendant
             Howard Freilich and Motion for Partial Summary Judgment at 9-10
             (filed November 14, 2011) (emphasis added) (attachments omitted)].

            On July 30, 2012, the State moved for entry of an agreed final
             judgment between the TCEQ and a group of approximately 154
             potentially responsible parties (“PRPs”). In the agreed final judgment,
             the State pled that “the TCEQ issued the Order under Sections
             361.188 and 361.272 of the Act….” (Supp. CR at ___ [Agreed Final
             Judgment, Cause No. D-1-GN-12-002297, Young Chevrolet, Inc., et
             al. v. Texas Commission on Environmental Quality, in the 345th
             Judicial District Court of Travis County, Texas at ¶ III. B. (filed July
             30, 2012) (emphasis added) (attachments omitted)].

            On May 3, 2013, the State moved for entry of another agreed final
             judgment between the TCEQ and a single PRP, Ark-La-Tex Waste
             Oil Company, Inc. Once again, the State pled that “the TCEQ issued
             the Order under Sections 361.188 and 361.272 of the Act….” (Supp.
             CR at ___ [Agreed Final Judgment, Cause No. D-1-GN-13-003373,
             Young Chevrolet, Inc., et al. v. Texas Commission on Environmental
             Quality, in the 345th Judicial District Court of Travis County, Texas

                                        - 34 -
            at ¶ III. B. (filed September 26, 2013) (emphasis added) (attachments
            omitted)].

          On February 4, 2014, the State moved for entry of default against
           PRPs Billy D. Cox Truck Leasing, Inc. and SBC Holdings, Inc. f/k/a/
           the Stroh Brewery Company. In ¶ 3 of those motions, the State noted
           that “The TCEQ issued a Superfund Order on February 12, 2010,
           (“the Order”) under Tex. Health and Safety Code §§ 361.188 and
           361.272….” (Supp. CR at ___ [Motion for Partial Default Judgment
           Against Billy D. Cox Truck Leasing, Inc. at ¶ 3 (filed February 4,
           2014) (emphasis added); Motion for Partial Default Judgment Against
           SBC Holdings, Inc., f/k/a The Stroh Brewery Company at ¶ 3 (filed
           February 3, 2014) (emphasis added).].

      Though the State has filed a handful of supplements to its pleadings at the

trial court, the Commission’s live pleadings directly contradict their core

arguments on appeal. The State’s Third Amended Answer acknowledged that

“[t]he Texas Legislature has defined the sole method for appealing the Order at

Tex. Health & Safety Code § 361.322.” (CR:678; App. E (emphasis added).) The

TCEQ concluded this Answer by pleading that “the standard of review in the

appeal of this Order is…whether: (a) TCEQ can prove, by a preponderance of the

evidence, the two factors listed in § 361.322(g)(1) and (2); (b) Plaintiffs can show

that the selection of the remedy by TCEQ was arbitrary or unreasonable; or

(c) Plaintiffs can show that the Order as a whole is ‘frivolous, unreasonable, or

without foundation with respect to a party named by the order.’ Id. at § 361.342.”

(CR:683; App. E (emphasis added).)

                                       - 35 -
             2.    The State disclosed that it issued the AO under both
                   sections to obtain advantages of a § 361.272 order.

      The State’s discovery disclosures make clear why the Commission chose to

issue the AO under § 361.272 as well § 361.188. Pursuant to § 361.274, “[a]n

administrative order under Section 361.272 does not require prior notice or an

adjudicative hearing before the commission.” Tex. Health & Safety Code Ann.

§ 361.274 (West 2010). In stating why ExxonMobil and Shell were not entitled to

an agency hearing prior to issuing the AO, the State disclosed that “a party does

not have a right to an adjudicative hearing prior to a § 361.272 Order, pursuant to

Tex. Health & Safety Code § 361.274.” (Supp. CR at ___ [Texas Commission on

Environmental Quality’s Response to Request for Disclosure at 3-4 (served

September 6, 2012) (attachments omitted)].

      Moreover, the State has steadfastly argued that ExxonMobil and Shell, as the

well as other PRPs, are jointly and severally liable for contamination at the Voda

Site. The statutory basis for joint and several liability under the SWDA is found in

§ 361.276, which states that “[i]f the release or threatened release is not proved to

be divisible, persons liable under Section § 361.272 or § 361.273 are jointly and

severally liable for eliminating the release or threatened release.” Tex. Health &

Safety Code Ann. § 361.276 (West 2010) (emphasis added). Nothing in

Subchapter F for a § 361.188 order establishes joint and several liability for

responsible parties, and § 361.276 does not state that persons declared by TCEQ to

                                       - 36 -
be a responsible party under a § 361.188 order are jointly and severally liable. At

the trial court, the State disclosed that: “[t]he TCEQ is not required to prove

allocation of liability, because the responsible parties are jointly and severally

liable unless they can prove ‘divisibility’ by a preponderance of the evidence.”

(Supp. CR at ___ [Texas Commission on Environmental Quality’s Response to

Request for Disclosure at 3-4 (served September 6, 2012) (attachments omitted)].

In other words, the Commission invoked § 361.272 in an attempt to hold the PRPs

for the Voda Site jointly and severally liable under the SWDA.

      D.    Following the listing procedures of Subchapter F does not insulate
            the AO from review under Subchapter K.

      Despite explicitly referencing numerous provisions of Subchapter K

throughout the AO, the State argues that the AO arose exclusively under § 361.188

because the agency followed the listing requirements of Subchapter F of the

SWDA. Therefore, the State argues, the AO can only be reviewable under the pure

substantial evidence rule. But as discussed above, the issuance of an order under

§ 361.272 does not preclude the Commission from the listing process of § 361.181-

188. Tex. Health & Safety Code Ann. § 361.322(e) (West 2010). Thus, § 361.322

authorizes the Commission to proceed with investigation and remedy selection

during the appeal of the administrative order under § 361.322, and nothing in

§ 361.322 indicates that once the TCEQ proceeds with the remedial action program

of Subchapter F, the appellate remedies of § 361.322 are mooted.

                                      - 37 -
      E.     Reviewing an administrative order under § 361.322 does not make
             Subchapter F redundant.

      The State suggests that if an administrative order issued under § 361.188

were subject to review based on a preponderance of the evidence, it would make

the listing procedures of Subchapter F effectively redundant. This suggestion

misapprehends what occurs prior to issuance of an administrative order compared

to what occurs at the district court upon judicial review.

      The TCEQ purposefully invoked § 361.272 and § 361.274 such that

ExxonMobil and Shell were not afforded a contested-case hearing prior to issuance

of the AO for the Voda Site. The Commission did not prove—by a preponderance

of the evidence to a neutral third party—that ExxonMobil and Shell were persons

responsible for solid waste at the Voda Site. Had ExxonMobil and Shell been

granted an adjudicative hearing, some procedures would be duplicated through

judicial review. However, the AO was issued without any such hearing, and the

district court will present the first opportunity for ExxonMobil and Shell to

challenge the AO and the first time the Commission will be required to carry its

statutory burden to prove ExxonMobil and Shell are responsible for solid waste.

      The State further suggests that the extensive procedure to list a site on the

Superfund registry should entitle the Commission to substantial evidence deference

because the agency spent significant time and effort investigating the Site and

choosing an appropriate remedy. Yet from the perspective of a party subject to an

                                        - 38 -
administrative order, virtually none of the Commission’s purported expertise is

brought to bear on issues most relevant to the responsible party—namely, whether

they are in fact a person responsible for solid waste or hazardous substances. In

practice, the agency’s identification of persons responsible for solid waste consists

of little more than collecting invoices or manifests, many of which are decades old,

and making a list of every entity mentioned in the paperwork. The SWDA does not

mandate any standard for how this identification must take place nor what

evidentiary threshold must be crossed before a party is named in an order.

      Although the Commission can issue administrative orders without

adjudicatory hearings, the potentially responsible party’s opportunity to establish

its innocence is delayed—not abrogated—by the SWDA. The appellate structure of

the SWDA allows those parties to challenge their status as PRPs and places the

burden on the Commission to ultimately prove them responsible at the district

court. When liability for such Sites routinely reaches into the millions of dollars,

the Legislature never intended the Commission’s unilateral order to be the final

word on liability.

      In contrast, the Commission does expend technical resources in developing a

remedy it believes suitable for a proposed site. This can occur either before the

issuance of the administrative order under § 361.188 or after the issuance of the

administrative order under § 361.272. In either event, the SWDA makes review of

                                       - 39 -
that remedy selection subject to greater deference than whether a party is

responsible for solid waste or whether the waste is divisible pursuant to the Act.

When a person subject to the order challenges the selected remedy, the

Commission is not required to prove it chose the best remedy by a preponderance

of the evidence, but instead the selected remedy is upheld “unless the court

determines that the remedy is arbitrary or unreasonable.” Tex. Health & Safety

Code Ann. § 361.322(h) (West 2010). In short, the Commission already receives

greater deference for issues where technical expertise was brought to bear, but the

Commission is not entitled to greater deference when simply naming parties it

believes responsible for the release of solid waste or hazardous substances.

      F.     If the Commission is correct that it exceeded its powers under the
             SWDA then the AO must be set aside.

      If the State is correct that “[a] single order cannot arise under both Sections

361.188 and 361.272” (Appellant’s Brief at 18.) the proper course of action is not

to grant the plea to the jurisdiction but to overturn the Order as a violation of law.

Administrative agencies “may exercise only those powers the law, in clear and

express statutory language, confers upon them.” Subaru of Am., Inc. v. David

McDavid Nissan, Inc., 84 S.W.3d 212, 220 (Tex. 2002). Agencies cannot “create

for themselves any excess powers” and courts avoid implying any additional

authority to them. Id. (citing Key Western Life Ins. Co. v. State Bd. of Ins., 350
S.W.2d 839, 848 (Tex. 1961)). When an agency exceeds the authority granted it by

                                        - 40 -
statute, the court should set aside the agency action. Pub. Util. Comm’n of Tex. v.

City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 315 (Tex. 2001); Heat Energy

Advanced Tech., Inc. v. W. Dallas Coal. for Envtl. Justice, 962 S.W.2d 288, 290

(Tex. App.—Austin 1998, pet. denied).

       The Commission intended to and did issue an administrative order under

both § 361.188 and § 361.272. Now, the State argues that the Commission has no

such power under the statute. If this Court agrees that the Commission is without

power to issue the AO under both § 361.188 and § 361.272, then the Court should

set aside the Order as exceeding the Commission’s power under the statute.

III.   Appellees’ Response to Appellant’s Issue Three.

       Review of the AO pursuant to § 361.322 of the SWDA is proper under the

Act and the Texas Constitution. The SWDA contains the applicable standard of

review, placing the burden on the Commission to prove, by a preponderance of the

evidence, that ExxonMobil and Shell are responsible for solid waste. The pure

substantial evidence review procedures found in the APA are not applicable to this

appeal, and the Texas Supreme Court’s decision in City of Waco regarding certain

threshold questions of standing for affected persons under the Texas Water Code is

not relevant to this Order.

                                      - 41 -
      A.     Texas courts are not constitutionally limited to review of
             administrative orders only as to matters of law.

      The State argues that courts are empowered to review administrative orders

only “as to matters of law” and that to do otherwise would offend the separation of

powers doctrine of the Texas Constitution. (Appellant’s Brief at 35.) Yet the

separation of powers doctrine only prohibits the Legislature from authorizing de

novo judicial review of quasi-legislative acts that address broad questions of public

policy or promulgate rules for future application. The AO is not a quasi-legislative

act, and thus judicial review under § 361.322 does not violate the separation of

powers doctrine.

      The Texas Constitution divides the state’s government into three coequal

branches, and forbids any branch from exercising a power properly vested in a

coordinate branch. Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d
591, 600 (Tex. 2001). Article II, Section 1 of the Texas Constitution provides as

follows:

      The powers of the Government of the State of Texas shall be divided
      into three distinct departments, each of which shall be confided to a
      separate body of magistracy, to wit: Those which are Legislative to
      one; those which are Executive to another, and those which are
      Judicial to another; and no person, or collection of persons, being of
      one of these departments, shall exercise any power properly attached
      to either of the others, except in the instances herein expressly
      permitted.

TEX. CONST. art. II, § 1.

                                       - 42 -
      Under Texas law, “a person may obtain judicial review of an administrative

action only if a statute provides a right to judicial review, or the action adversely

affects a vested property right or otherwise violates a constitutional right.” Tex.

Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d
170, 172 (Tex. 2004). The separation of powers doctrine generally prohibits a court

from reviewing the actions of an administrative agency absent statutory

authorization. Tex. Comm’n of Licensing & Regulation v. Model Search Am., Inc.,

953 S.W.2d 289, 291 (Tex. App.—Austin 1997, no writ).

      This Court explained the test for determining whether judicial review of an

agency’s order violates the separation of powers doctrine in Commercial Life

Insurance Company v. Texas State Board of Insurance, 808 S.W.2d 552, 554-55

(Tex. App.—Austin 1991, writ denied). The plaintiff in Commercial Life sought

judicial review of a final order issued by the Texas State Board of Insurance. Id. at

553. The insurance code provided that “such causes of action ‘shall be tried and

determined upon a trial de novo’ and, moreover, ‘the substantial evidence rule shall

not apply.’” Id. at 553-54. The Insurance Board argued that the statute violated the

separation of powers doctrine and the Insurance Board’s decision was subject only

to substantial evidence review. Id. at 555. The trial court in Commercial Life

accepted the Insurance Board’s argument, refusing to hold a trial de novo as

                                       - 43 -
required by the statute, and, based on the record, sustained the Insurance Board’s

order on the ground that it was supported by substantial evidence. Id. at 554.

         This Court reversed. This Court first identified the proper test for

constitutionality as “whether the reviewing court is required to exercise a function

that is deemed nonjudicial.” Id. at 556. Explaining this dichotomy, the Court

wrote:

         An inquiry by a court is nonjudicial and unconstitutional if it looks to
         the future and changes existing conditions by making a new rule
         which is to be applied thereafter. However, a court engages in a
         judicial inquiry if it investigates, declares and enforces liabilities as
         they stand on present or past facts and under laws already in
         existence. Thus, the court’s action is adjudicatory in nature if its
         action is particular and immediate rather than general and future.

         Id.
The Court held that the Insurance Board’s decision was “quasi-judicial and not

legislative in nature” such that trial de novo at the district court was permissible

under the separation of powers doctrine. Id.

         This Court reiterated the appropriate test for determining whether review of

an administrative order violates the separation of powers doctrine eight years later

in Macias v. Rylander, 995 S.W.2d 829, 832-33 (Tex. App.—Austin 1999, no

pet.). In that case, the Texas Comptroller issued an order temporarily suspending

Macias’s broker’s license. Id. at 831. Macias sought judicial review of the

Comptroller’s order. Id. Although the statute called for judicial review via trial de

                                           - 44 -
novo, the Comptroller convinced the district court to review the Comptroller’s

order pursuant to the substantial evidence rule, arguing that pure de novo review

violates the Texas Constitution. Id. at 832. The district court upheld the suspension

based on substantial evidence review and Macias appealed. Id.

      Writing for the Court, Justice Yeakel framed the issue on appeal as “whether

a trial de novo of the Comptroller’s charges against Macias violates the

constitution, allowing only substantial-evidence review confined to the agency

record.” Id. at 832. Justice Yeakel first identified the relevant separation of powers

doctrine, noting that “[i]f the function of the agency is legislative, judicial review is

constrained by the substantial-evidence rule because the court may not substitute

its judgment for that which is considered to be a legislative function.” Id. at 832. In

contrast, “when an agency has acted in a judicial or quasi-judicial capacity, a court

may conduct a trial de novo without violating separation-of-powers principles.” Id.

at 833.

      Drawing the distinction between the legislative and judicial, Justice Yeakel

explained that “an administrative agency acts in a legislative capacity when it

addresses broad questions of public policy and promulgates rules for future

application ‘to all or some part of those subject to its power.’” Id. But a “judicial

inquiry…typically involves an investigation of present or past facts and a

determination of liability based on laws already in existence.” Id. Applying this

                                         - 45 -
framework to the facts of Macias, Justice Yeakel held that the Comptroller’s

actions were judicial in nature because instead of “promulgating rules that would

broadly affect customs brokers as a whole,” the Comptroller had only “engaged in

a factual inquiry into the conduct of a particular individual.” Id. Finding that “the

district court erred in conducting a substantial-evidence review of the

Comptroller’s order” the Court decided to “remand this case to the district court for

consideration by trial de novo.” Id.

      The State advances the same argument presented by the Insurance Board in

Commercial Life and the Comptroller in Macias, suggesting that the separation of

powers doctrine requires that the trial court may only review the AO under the

substantial evidence test as to matters of law. Yet the State makes no effort to

explain how issuance of the AO was a quasi-legislative, as opposed to a quasi-

judicial, act. Unlike a quasi-legislative action, the AO does not address “broad

questions of public policy” nor promulgate “rules for future application.” Macias,
995 S.W.2d at 833. Instead, it fits squarely within the quasi-judicial framework

because it “investigates, declares and enforces liabilities as they stand on present or

past facts and under laws already in existence.” Commercial Life Ins. Co., 808
S.W.2d at 556. The AO purports to make specific factual findings about materials

ExxonMobil and Shell shipped to the Voda Site, the alleged release of those

materials, and the harm allegedly caused—all predicates to alleged liability under

                                        - 46 -
the SWDA. Therefore, review of the AO under the statutory provisions of the

SWDA does not violate the separation of powers doctrine. See also Key W. Life

Ins. Co. v. State Bd. of Ins., 350 S.W.2d 839, 847 (Tex. 1961); Dep’t of Pub. Safety

v. Petty, 482 S.W.2d 949, 952 (Tex. Civ. App.—Austin 1972, writ ref’d n.r.e.).

      The State relies upon Texas State Board of Examiners in Optometry v. Carp,

388 S.W.2d 409, 415-16 (Tex. 1965) to argue that review of the AO under

§ 361.322 would violate the separation of powers doctrine. Yet the Texas Supreme

Court explicitly identified the activity at issue in Carp—adopting a code of

professional responsibility applicable to all Optometrists in the state—as “quasi-

legislative in nature.” Id. at 414. The facts presented by Carp have no application

to the AO, and the holding only highlights the distinction between quasi-legislative

acts that set rules applicable to all parties and quasi-judicial acts that determine the

rights of responsibilities of the parties subject to the particular order.

      The State also relies on the 1967 decision in Gerst for the sweeping

suggestion that all judicial review of agency decisions is limited to questions of

law. Gerst v. Nixon, 411 S.W.2d 350, 352 (Tex. 1967). That case dealt with an

application to the Savings and Loan Commission for a charter to open a new

savings and loan association. The Court in Gerst defined certain acts—including

the issuance of permits to do business under the Savings and Loan Act—as

administrative functions that were not subject to judicial review de novo. Id. at

                                          - 47 -
354. (“The granting or withholding of a permit, certificate or authority to do

business in a statutorily regulated commercial endeavor is an administrative

function.”). Following the opportunity for a formal hearing at the agency level, the

court in Gerst held that de novo review of this type of administrative function was

impermissible, and determined that the trial court should review the decision on the

application under the substantial evidence rule. Id. In short, Gerst was directed at a

permitting decision that was reached following the opportunity for a hearing at the

agency level, and has no application to the facts of this AO.

      B.     The Texas Supreme Court’s decision in City of Waco is not
             controlling in this SWDA appeal.

      The State relies on the Texas Supreme Court’s decision in Texas

Commission on Environmental Quality v. City of Waco, 413 S.W.3d 409 (Tex.

2013) (App. K) to argue that judicial review of the AO is limited to the

“administrative record” provided by the TCEQ. Yet the State misapprehends the

significance of that decision at both the Court of Appeals and Supreme Court

levels.

      The central issue in City of Waco was a threshold determination on whether

a third-party could intervene and force a contested-case hearing for an existing

permit modification. Under the Texas Water Code, interested third-parties may

object to requested permit modifications during a comment period and may attempt

to intervene and force the applicant into a contested-case hearing. However, only

                                        - 48 -
an “affected person” has standing to receive a contested-case hearing. Therefore, a

threshold determination must be made as to whether the objecting party is an

“affected person” with standing to request a contested-case hearing.

      In City of Waco, a concentrated animal feeding operation sought to modify

its existing water-quality permit from the TCEQ. The City objected to the proposed

permit modification and sought to initiate a contested-case hearing. The

Commission determined that the City was not an “affected person” entitled to force

a contested-case hearing, and the Executive Director issued the amended permit.

The City appealed to the district court, which affirmed the Commission’s decision.

This Court reversed, holding that the Commission acted arbitrarily as a matter of

law. City of Waco v. Tex. Comm’n on Envtl. Quality, 346 S.W.3d 781, 827 (Tex.

App.—Austin 2011, pet. granted). This Court also summarized and restated a prior

line of cases which held that pure substantial evidence review was not possible

absent the opportunity to develop a record through a contested-case or adjudicative

hearing. Id. at 818. However, this Court based its holding on its conclusion that the

agency had “acted arbitrarily by relying on a factor that is irrelevant to the City’s

standing to obtain a hearing.” Id. at 823. Therefore, the Commission’s decision

could be overturned as arbitrary “independently and apart from whether substantial

evidence could be found to support those findings.” Id. at 819.

                                       - 49 -
      The Texas Supreme Court reversed and reinstated the Commission’s

decision to deny the City’s request. City of Waco, 413 S.W.3d at 425. The Texas

Supreme Court found that the Commission’s actions were not arbitrary and that

there was evidence in the record to support the Commission’s conclusion that the

City was not entitled to force a contested-case hearing. Id. In finding that the

Commission’s action was not arbitrary, the Texas Supreme Court did not articulate

what standard of review it used to uphold the TCEQ’s threshold determination on

whether the City was an affected person entitled to force a contested-case hearing.

Nor did the Texas Supreme Court address this Court’s extensive analysis regarding

the inapplicability of pure substantial evidence review in the absence of a factual

record developed in a contested-case proceeding. In fact, the words “substantial

evidence” are absent from the Texas Supreme Court’s analysis of the agency’s

actions. Instead, the Texas Supreme Court gave deference to the agency’s answer

to the threshold statutory question of whether the permit was exempt from the

hearing requirement under the statute.

      The State suggests that City of Waco should be interpreted to mean that all

the Commission’s actions are subject to review only under the substantial evidence

standard, regardless of the statute involved or the procedures afforded the

aggrieved party at the agency level. But this over-reads the limited issue at stake in

City of Waco. The issue on appeal was not the agency’s ultimate decision on the

                                         - 50 -
merits of the permit, but what the Texas Supreme Court characterized as a

“threshold determination of whether the party is an ‘affected person’” sufficient to

intervene in the application process of a third party. Id. at 410. While both cases

involve activities by the TCEQ, their similarities largely end there, as the present

case has no connection to the Texas Water Code, permitting, or the standing of

third parties—rather it involves the appeal of an agency order under liability-

declaring provisions of the SWDA. The TCEQ’s determination on right-to-hearing

decisions for third parties is not analogous to enforcement of a unilateral

administrative order against an entity that the agency alone has determined to be

responsible for environmental contamination.

      More importantly, the decision in City of Waco came in the context of an

appeal under § 5.351 of the Texas Water Code, which itself does not supply any

standard of review. Tex. Water Code Ann. § 5.351 (West 2008). Through case law,

the Texas Supreme Court has held that such decisions are subject to “substantial

evidence review.” Texas Water Comm’n v. Dellana, 849 S.W.2d 808, 809-10 (Tex.

1993). In contrast, this case is brought under the appellate provisions of the

SWDA, which places an affirmative burden of proof on the agency to prove certain

facts by a preponderance of the evidence to the satisfaction of the district court.

Tex. Health & Safety Code Ann. § 361.322 (West 2010).

                                       - 51 -
      The State further argues that a post-City of Waco decision from this Court,

Texas Commission on Environmental Quality v. Sierra Club, No. 03-12-00335-

CV, 2014 WL 7464085 (Tex. App.—Austin Dec. 30, 2014, no pet. h.), “reinforced

[the State’s] interpretation.” (Appellant’s Brief at 39.)6 In that case, a waste control

company applied to the TCEQ for a permit to construct and operate two facilities

for the disposal of low-level radioactive waste under the Texas Radiation Control

Act (“TRCA”). Similar to the Water Code provisions at issue in City of Waco, the

TRCA requires the TCEQ to hold a contested-case hearing on the merits of an

application if a “person affected” requests one. Tex. Health & Safety Code Ann. §

401.229(a) (West 2010). Two members of the Sierra Club sought to intervene and

force the applicant to defend its permit application through the contested-case

process. Id. at *2. This Court identified “the critical, or threshold, inquiry in

contested-case hearing requests—and importantly the focus of the parties to this

appeal—is whether the person requesting the hearing is an ‘affected person.’” Id.

at *4. Applying the holding from City of Waco, the Court held it must review “a

TCEQ determination regarding affected-person status for an abuse of discretion.”

Id. Upon review, this Court found a reasonable basis for the agency’s decision to

deny the hearing request. Id. at *9. And consistent with City of Waco, this Court

6
   The opinion cited by Appellant was withdrawn by the Court on December 30, 2104, and
substituted with the opinion discussed herein.

                                         - 52 -
determined that the Commission was not required to hold a contested-case hearing

simply to determine whether or not it was required to hold a contested-case

hearing. Id. at 10.

      No court interpreting or applying City of Waco has adopted the State’s

position that all TCEQ decisions—including those with specific statutory appellate

provisions to the contrary—are subject to review only through pure substantial

evidence. The cases citing City of Waco only reiterate its application to the limited,

threshold inquiry of whether a party is an affected person sufficient to trigger a

contested-case hearing. Consequently, the issues before the Court are neither

controlled nor informed by City of Waco or its limited progeny.

      C.     The APA provisions authorizing pure substantial evidence review
             on a contested-case record are not applicable to this appeal.

      Ignoring the statutory language for judicial review of the AO, the State tries

to shoehorn judicial review of the case into pure substantial evidence review under

Texas Government Code § 2001.174 with the claim that the Court should “look to

the APA” to “interpret the existing law of administrative review.” (Appellant’s

Brief at 36.) Yet by its express terms, Texas Government Code § 2001.174 does

not apply because there was no contested-case hearing at the TCEQ and because

the SWDA already provides the appropriate standard of review. If the Court does

choose to look to the APA, the lessons drawn should only reinforce the trial court’s

decision denying the State’s plea.

                                        - 53 -
             1.    The APA does not apply, and the available guidance leads
                   to different conclusions than advocated by the State.

      The statutory basis for pure substantial evidence review advanced by the

State is found in the Administrative Procedures Act (“APA”), Texas Government

Code Chapter 2001. Texas Gov’t Code Ann. §§ 2001.171-178 (West 2008). By its

express terms, this APA provision is limited to the appeal of a contested-case

hearing. Id. at § 2001.171. When an aggrieved party appeals an administrative

order issued after a contested-case hearing, the APA provides that the scope of

judicial review “is as provided by the law under which review is sought.” Id. at

§ 2001.172. If the law under which review is sought grants a right to trial de novo

of the administrative order, the APA provides the relevant procedures for this de

novo review under § 2001.173. If the law under which review is sought instead

allows only substantial evidence review of the contested-case order—or if it does

not define a scope of review—the APA outlines the procedures for that review in

§ 2001.174. None of these three situations are applicable to the AO in this case.

      Absent express application, to the extent the APA offers any guidance for

how the Court should determine the proper procedure for the appeal of the AO, the

State draws precisely the wrong conclusions. First, the Commission suggests the

Court should ignore the statutory appellate provisions of the SWDA and simply

substitute substantial evidence review under § 2001.174. But even when the APA

applies, it does not supplant the statutory provisions of the law under which review

                                       - 54 -
is sought as reflected in § 2001.172, but is expressly subject to the specific statute

under which the administrative order is being reviewed. Second, the State has

argued that administrative orders can only be reviewed as to questions of law based

on the separation of powers doctrine. Yet Subchapter K of the APA establishes that

administrative orders can be reviewed via trial de novo at the district court, even if

they are issued following a contested-case hearing at the agency.

             2.    Outside of threshold standing questions, pure substantial
                   evidence requires a true contested-case record under the
                   APA.

      The APA standard of “substantial evidence” permits the reviewing court to

reverse if the decision is “not reasonably supported by substantial evidence

considering the reliable and probative evidence in the record as a whole.” Texas

Gov’t Code Ann. § 2001.174(2)(E) (West 2008) (emphasis added). The “record as

a whole” within which the court looks for substantial evidence is the contested-

case record, not any type of informal record developed in a non-contested-case

proceeding. In fact, the items identified as part of such a record in the APA—

pleadings, evidence received, offers of proof, etc.—demonstrates that the “record

as a whole” is an adjudicative record. Id. at § 2001.060. Therefore, pure substantial

evidence review under the APA presupposes an open, adjudicative hearing where

both sides may present evidence and cross-examine testifying witnesses. See, e.g.,

Ramirez v. Tex. State Bd. of Med. Exam’rs, 927 S.W.2d 770, 773 (Tex. App.—

                                        - 55 -
Austin 1996, no writ) (rejecting argument that Legislature created right of judicial

review under substantial-evidence rule while depriving parties of opportunity for

contested-case hearing); G.E. Am. Commc’n v. Galveston Cent. Appraisal Dist.,

979 S.W.2d 761, 767 (Tex. App.—Houston [14th Dist.] 1998, no pet.)

(“Substantial evidence review cannot have been the proper standard because there

is no record from the appraisal review board hearing.”).

      The City of Waco case recognized a limited exception to the link between

pure substantial evidence review and a contested-case hearing, i.e., the “threshold

determination of whether the person seeking the [contested-case] hearing is an

affected person” sufficient to challenge a permitting decision. Sierra Club, 2014
WL 7463875, at *5. Those decisions can be reviewed by the trial court for abuse of

discretion. None of the features applicable to this limited exception are present in

this case. This is a Superfund case in which the TCEQ has declared ExxonMobil

and Shell liable, not a permitting case brought by a third-party. ExxonMobil and

Shell challenged a unilateral administrative order, not a denial of their contested-

case hearing request. Perhaps most importantly, the relevant statute contains a

standard of review, and there is no basis for substituting a standard of review other

than the one called for in the statute.

      The State ignores these prerequisites for pure substantial evidence review

and points to a handful of cases to argue that the Court should apply pure

                                          - 56 -
substantial evidence review to this appeal of a state Superfund order. Those cases

are readily distinguished. The aggrieved party in Smith v. Houston Chemical

Services, Inc., 872 S.W.2d 252 (Tex. App.—Austin 1994, writ denied) was

appealing a permitting decision under § 361.321 following a contested-case

hearing on its application for a solid waste disposal permit. Likewise in Texas

Commission on Environmental Quality v. Kelsoe, 286 S.W.3d 91 (Tex. App.—

Austin 2009, pet. denied), the aggrieved party challenged a decision of the

executive director about the administrative completeness of his application for a

solid waste permit. However, the case was not decided on substantive grounds

because the party failed to timely appeal the executive director’s decision. Id. at

97.7

       The State also relies upon United Copper to claim that the AO should only

be reviewed under the pure substantial evidence rule. United Copper Indus., Inc. v.

Grissom, 17 S.W.3d 797 (Tex. App.—Austin 2000, pet. dism’d). But like City of

Waco, United Copper was focused on whether a third-party was an affected person

sufficient to intervene in a permitting matter, and more specifically, what formal

procedures the agency must adopt to make that threshold determination. United

Copper applied to the Commission for an air quality permit to construct and

7
   The Court’s observation in Kelsoe about whether a contested-case hearing was required
before the executive director could determine if a permit application was administratively
complete—even if it were somehow relevant to this Superfund case—was dicta.

                                          - 57 -
operate two copper melting furnaces. Id. at 799. Shortly after receiving notice of

the application, Grissom, an adjacent landowner, sought a hearing on United

Copper’s permit. Id. at 800. The Commission denied his request, and Grissom

appealed to the district court. Id. at 800-01. The district court found that the

Commission erred by denying Grissom’s request without first providing him an

opportunity to present his evidence at a preliminary adjudicative hearing, and

remanded the case to the Commission for such a hearing. Id. at 801. This Court

affirmed, determining that Grissom was an affected person under the rule and that

the agency had erred by denying Grissom a meaningful opportunity to present

evidence in support of his hearing request. Id. at 806.

      United Copper was curtailed by Collins two years later (which the State also

relies upon) which itself was distinguished by the Texas Supreme Court in City of

Waco. Whereas the landowner in United Copper was given a hearing to prove he

was an affected person sufficient to intervene in the permitting process, the

landowner in Collins (who received no such hearing) was unable to show that he

was an affected person under the statute, and this Court upheld the agency’s

decision to deny his request for a contested-case hearing on the permit. Collins v.

Tex. Natural Res. Conservation Comm’n, 94 S.W.3d 876, 885 (Tex. App.—Austin

2002, no pet.). In either event, the relative rights of third-parties to intervene in a

                                        - 58 -
permit dispute has no application to an administrative order naming parties liable

under the Superfund program.

      This case is not an appeal of a permit decision under § 361.321 following a

contested-case hearing, but instead challenges a unilateral state Superfund order

under § 361.322. Because parties subject to the order have not been afforded any

hearing prior to issuance of the AO, the trial court may only uphold the order if the

Commission “proves by a “preponderance of the evidence” the factors in

§ 361.322(g). The “use of the term prove” suggests that the Legislature intended

evidence to be presented—and that the agency could not rely on its own non-

adjudicative agency record to justify its actions. See Ramirez v. Tex. State Bd. of

Med. Exam’rs, 927 S.W.2d 770, 773 (Tex. App.—Austin 1996, no writ); Tex.

Dep’t of Ins. v. State Farm Lloyds, 260 S.W.3d 233, 245 (Tex. App.—Austin 2008,

no pet.) (“Absent an administrative record, no substantial evidence review is

required or even possible.”).

                                  CONCLUSION
      For each of the reasons discussed above, Appellees request that this Court

affirm the trial court’s order denying Appellant’s Plea to the Jurisdiction, or in the

alternative, overturn the Order as a violation of the Commission’s power under the

SWDA.

                                        - 59 -
Dated: January 29, 2015.

                           Respectfully submitted,

                           /s/ John Eldridge
                           John R. Eldridge
                           State Bar No. 06513520
                           john.eldridge@haynesboone.com
                           Kent G. Rutter
                           State Bar No. 00797364
                           kent.rutter@haynesboone.com
                           HAYNES AND BOONE, LLP
                           1221 McKinney Street, Suite 2100
                           Houston, Texas 77010-2007
                           Telephone: (713) 547-2000
                           Telecopier: (713) 547-2600

                           Adam H. Sencenbaugh
                           State Bar No. 24060584
                           adam.sencenbaugh@haynesboone.com
                           HAYNES AND BOONE, LLP
                           600 Congress Avenue, Suite 1300
                           Austin, Texas 78701
                           Telephone: (512) 867-8489
                           Telecopier: (512) 867-8606

                           ATTORNEYS FOR APPELLEES EXXON
                           MOBIL CORPORATION, EXXONMOBIL
                           OIL   CORPORATION,   PENNZOIL-
                           QUAKER STATE COMPANY, AND
                           SHELL OIL COMPANY

                           - 60 -
                     CERTIFICATE OF COMPLIANCE
                         TEX. R. APP. P. 9.4(i)(3)

       I hereby certify that this Brief contains a total of 14,210 words, excluding
the parts of the brief exempted under TEX. R. APP. P. 9.4(i)(1), as verified by
Microsoft Word 2010. This Brief is therefore in compliance with TEX. R. APP. P.
9.4(i)(2)(B).

                                      /s/ Adam Sencenbaugh
                                      Adam Sencenbaugh

                                      - 61 -
                         CERTIFICATE OF SERVICE
       In accordance with the Texas Rules of Appellate Procedure, certify that a
true and correct copy of the Appellees’ Brief, with appendix, was served by
electronic service on the following parties or attorneys of record on this 29th day
of January, 2015:

Attorneys                             Parties

Thomas H. Edwards                     Texas Commission on Environmental
Quality
Craig J. Pritzlaff
Linda Secord
Assistant Attorney General
Office of the Attorney General
Environmental Protection Division
P. O. Box 12548, Capitol Station
Austin, TX 78711-2548

NON PARTIES TO APPEAL:

Janessa M. Glenn                  Cabot Norit Americas, Inc.
R. Steven Morton
MOLTZ MORTON & GLENN, LLP
5113 Southwest Parkway, Suite 120
Austin, TX 78735-8969

John E. Leslie                        Howard Freilich/ d/b/a Quick Stop
JOHN LESLIE | PLLC                    Brake and Muffler
1216 Florida Dr., Suite 140
Arlington, TX 76015-2393

Cynthia J. Bishop                     Baxter Oil Service
C BISHOP LAW PC
P. O. Box 612994
Dallas, TX 75261-2994

                                      - 62 -
Paul Craig Laird II              Frank Kosar, d/b/a Rite Way Truck Rental
ASHLEY & LAIRD, L.C.
800 W. Airport Fwy., Suite 880
Irving, TX 75062-6274

Billy D. Cox                     Billy D. Cox Truck Leasing, Inc.
128 Red Oak Ln.
Flower Mound, TX 75028-3501

David F. Zalkovsky, Agent        Central Transfer & Storage Co.
11302 Ferndale Rd.
Dallas, TX 75238-1020

George E. Kuehn                  SBC Holdings, Inc., f/k/a The Stroh
BUTZEL LONG                      Brewery Company
301 E. Liberty St., Suite 500
Ann Arbor, MI 48102-2283

                                 /s/ Adam Sencenbaugh
                                 Adam Sencenbaugh

                                 - 63 -
                            APPENDIX

App. A   —   Administrative Order (CR:29-108)

App. B   —   TCEQ’s Response to Motion for Rehearing

App. C   —   Plaintiffs’ First Amended Original Petition (CR:4-27)

App. D   —   Texas Commission on Environmental Quality’s Original
             Counter-Petition and Third-Party Petition and Request for
             Disclosure (CR:127-169)

App. E   —   TCEQ’s Third Original Answer, responding to Shell and Exxon
             Mobil, and Plea to the Jurisdiction (CR:675-687)

App. F   —   Act approved June 2, 1969, 61st Leg., R.S., ch. 405, 1969 Tex.
             Gen. Laws 1320, 1320 (repealed 1989) recodified by Act
             approved June 14, 1989, 71st Leg., R.S., ch. 678, 1989 Tex.
             Gen. Laws 2230

App. G   —   Act approved June 15, 1973, 63rd Leg., R.S., ch. 576, 1973
             Tex. Gen. Laws 1595 (current version at Tex. Health & Safety
             Code Ann. § 361.003(24) (West 2010)

App. H   —   Act approved June 12, 1985, 69th Leg., R.S., ch. 566, 1985
             Tex. Gen. Laws 2166 (repealed 1989) recodified by Act
             approved June 14, 1989, 71st Leg., R.S., ch. 678, 1989 Tex.
             Gen. Laws 2230
Ohio App. I   —   Act approved June 14, 1989, 71st Leg., R.S., ch. 703, 1989 Tex.
             Gen. Laws 3212, 3217 (current version at Tex. Health & Safety
             Code Ann. § 361.322 (West 2010)

App. J   —   TCEQ Agenda, February 10, 2010

App. K   —   Texas Commission on Environmental Quality v. City of Waco,
             413 S.W.3d 409 (Tex. 2013)
      APP. A

Administrative Order
   (CR:29-108)
                TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

                            DOCKET NUMBER 2009-1706-SPF

        IN THE MATTER OF                        §              BEFORE THE
       THE SITE KNOWN AS                        §         TEXAS COMMISSION ON
      VODA PETROLEUM, INC.                      §        ENVIRONMENTAL QUALITY
      STATE SUPERFUND SITE                      §

                                AN ADMINISTRATIVE ORDER

I.    Introduction

      On February 1 Q, 201 Q               , the Texas Commission on Environmental Quality
      ("Commission" or "TCEQ") considered the Executive Director's ("ED") allegations of the
      existence of a release or threat of release of solid wastes and/or hazardous substances into
      the environment on, at or from the Yoda Petroleum, Inc. State Superfund Site ("Site") that
      poses an imminent and substantial endangerment to the public health and safety or the
      environment pursuant to the Solid Waste Disposal Act, TEX. HEALTH & SAFETY CODE,
      Chapter 361 (the "Act"), and the ED's requested relief including issuance of a Commission
      order to require persons responsible for such solid wastes or hazardous substances to perform
      the Work, including conducting the Remedial Activities, as authorized by Sections 361.188
      and 361.272 of the Act.

      After proper notice, the TCEQ makes the following Findings of Fact and Conclusions of
      Law:

II.   Findings of Fact

      A.     For purposes of this Administrative Order ("AO"), TCEQ has ideµtified the
             following persons that are potentially responsible parties ("PRPs") for' the solid
             waste and/or hazardous substances at the Site:

                     AAMCO Transmissions

                     AR Oil Co

                     A T P Results Inc

                                                                                                      29
 AT&T

 Adena Exploration Inc

Allstate Transmissions

Amber Refining Inc

American Airlines Inc

American Auto

American Marazzi Tile Inc

American Norit Company Inc

American Spill Control Inc

Andrews Motor & Transmission

Anvil Shop

Aratex Services Inc

Archer Auto

Arco Oil and Gas Corporation

Ark-La-Tex Waste Oil Co Inc

Ashco Production Inc

Auto Precision Motors Inc

Autohaus

Aviation Properties Inc

Axelson Inc

Aycock Oil Corporation

B B Wells Waste Oil Inc

           Page 2 - Yoda Petroleum, Inc., Stale Superfund Site

                                                                 30
BE &Kinc

Basil Oil Field Service Inc

Baxter Oil Service

Bayou State Oil Corporation

Ben E Keith Company

Ben Griffin Tractor Company

Big Three Industrial Gas Inc

Billy D Cox Truck Leasing Inc

Bishops Auto

Blake Janet DBA D & D Radiator & Muffler

Borden Inc

Bright Truck Leasing Corporation

Brookhollow Exon Car Care

Brown & Root Inc

Brown Express Inc

Brunson Oil

Brushy Creek Saltwater Disposal Inc

Buck Resources Inc

Bule Diamond

Burland Enterprises Inc

CPL Industries

Cabot Corporation

          Page 3 - Yoda Petroleum, Inc., State Superfund Site

                                                                31
Can-Am Distributors and Warehouse Inc of Texas

Capacity of Texas Inc

Carraway Co

Carrier Air Conditioning

Cematco Inc

Central Power and Light Company

Central Texas Iron Works

Central Transfer & Storage Co

Champie Hill Mobil

Champion International Corporation

Channel Shipyard Company Inc

Chaparral Steel Company

Chief Oil & Chemical

Cities Service Company

Cities Service Pipe Line Company

City Motor Supply Inc

City of Dallas

City of Garland

City of Jefferson

City of Plano

City of University Park

Clarke Checks Inc

          Page 4 - Yoda Petrolewn, Inc., State Superfund Site

                                                                32
Clements Oil Corporation

Cliffs Automotive

Coker Automotive Center Inc

Collin County

Complete Auto Transit Inc

Continental Can Company USA Inc

Continental Car Wash

Continental Trailways Inc

Converter Shop Inc

Coors Distributor

Custom-Bilt Cabinet and Supply Inc

Custom-Crete Inc

Daljet Inc

Dallas Area Rapid Transit

Dallas Dressed Beef Company Inc

Dallas Lift Trucks Inc

Dallas Power & Light Company

Damson Gas Processing Corp

Davison Petroleum Products

Davison, TM

Delmar Disposal Co

Deloach Texaco

             Page 5 - Yoda Petroleum, Inc., State Superfund Site

                                                                   33
Delta Distributors Inc

Diamond Shamrock

Dillingham & Smith Mechanical and Sheet Metal Contractors Inc

Dixie Oil

Donco Saltwater Disposal System

Double A & Y Corp

Dowell Schlumberger Incorporated

Dunlap-Swain

Durham Transportation Inc

EC Incorporated

East Texas Gas

Eastern ECC Company

Fina

The Firestone Tire and Rubber Company

First Interstate Bank of Dallas

Fort Sill

Fox &Jacobs

Franks Oil Service

Fred Jordan Inc

Fred Taylor GMC Truck Sales Inc

Freilich Howard DBA Quick Stop Brake & Muffler

Fruin-Colnon Corporation

            Page 6 - Voda Petroleum, Inc., State Superfund Site

                                                                  34
G B Boots Smith Corporation

Gelco Truck Leasing Division Gelco Corporation

General Electric Company

General Telephone Company of the Southwest

General Tire Inc

General Truck Leasing Inc

Georgia-Pacific Corporation

Gifford-Hill Cement Compariy of Texas

Goff Willie

Grantham Oil Service

Greyhound Lines Inc

Grubbs Enterprises Ltd

Gulf States Oil & Refining Co

Gulf Stream Oil

H & H Oil Services

H &P Trans

Halliburton Energy Services Inc

Harris Bros Co

Harry Vowell Tank Trucks Inc

Hartsell Oil

Haynes Resources Inc

Hearne Ave Exxon

          Page 7 - Yoda Petrnlewn, Inc., State Superfund Site

                                                                35
Herod Oil Inc

Hertz Penske Truck Leasing Inc

The Highland Pump Company Inc

Holloway Welding & Piping Co

Hunt Oil Company

Hydraulic Service and Supply Company

Industrial Lubricants Co

Industrial Solvents Gulf Division of Industrial Solvents Corporation

Ingersoll-Rand Company

Inland Container Corporation

International Electric Corporation

International Paper Company

J & E Die Casting Co Division of Cascade Die Casting Group Inc

Jam es T Gentry Inc

Janks Texaco

Jeffco

J errys Waste Oil

John Crawford Firestone Inc

Johnson Controls Inc

Jones Environmental Inc

Joy Manufacturing Company

Jubilee Oil Service

          Page 8 - Yoda Petrolemn, Inc., State Superfund Site

                                                                       36
Juna Oil & Gas Co Inc

K & F Oil & Gas Management Inc

KRNN

Kayo Oil Company

Kel.lys Truck Terminal Inc

Kennys Mobil

Ko:mr Frank DBA Rite Way Truck Rental

LA Transit

L D Baker Inc DBA Baker Gulf Service

L & J Recovery Ltd

LTV Energy Products Company

Lake Country Trucking Inc

Lance Inc

Larry Gulledge Exxon

Las Colinas Service Center Inc

Lockheed Missiles & Space Company Inc

Lone Star Dodge Inc

Lone Star Logistics Inc

Long Mile Rubber Co

The Lubrizol Corporation

M Lipsitz & Co Inc

M & M Oil Salvage Inc

            Page 9 - Yoda Petroleum, Inc., State Superfund Site

                                                                  37
                              MacMillan Bloedel Containers

                              Manvel Salt Water Disposal Company

                              Manville Sales Corporation

                              Marathon Battery Company

                              Martin-Decker

                              Mathews Trucking Company Inc

                              McAlister Construction Company

                              McBane Crude

                              McDonalds

                              Mega Lubricants Inc

                              Melton Truck Lines Inc

                              Metal Services Inc

                              Metro Aviation Inc

                             Metro Ford Truck Sales Inc

                             Millers Gulf

                              Minit Oil Change Inc

                             Mobil Oil Corporation

                             Modem Tire Service Inc

                             Mohawk Laboratories

                             Monsanto Company1

                             Moore James

1
    Only to the extent that Solutia Inc. is not excluded under applicable federal bankruptcy law.

                                          Page 10- Voda Petroleum, Inc., State Superfund Site

                                                                                                    38
Morgan Oil

Morgan, Troy L Jr

Mr Transmission

Murphy Brothers Service Center Inc

National Oilwell Inc

National Scientific Balloon Facility

National Supply Co

Naval Air Station Dallas

Navarro Petroleum Corp

Nobles Transmission

North Highland Mobil

Northwest Oil

Norwel Equipment Company

Nucor Corporation

Occidental Chemical Corporation

Oilwell Division of United States Steel Corporation

Olympic Fastening Systems Inc

On the Spot Oil Change

Owens Mobil

Oxendine, Von K DBA Oxendine Transmission

Oxy Cities Service NGL Inc

P N B Corporation

          Page 11 - Yoda Petroleum, Inc., Stale Superfund Site

                                                                 39
Pantera Crude Inc

Paramount Packaging Corporation Texas

Parawax

Parrott Oil Corp

Pauls Oils Service

Pearl Brewing Company

Pelican Energy of LA Inc

Pen Roy Oil of Odessa Inc

Pengo Industries Inc

Pennwalt Corporation

Pepsi Cola

Performance Friction Products Formerly Coltec Automotive Products
       Division of Coltec Industries Inc

Peterbilt Motors Company

Petro Chem Environmental Sen·ices Inc

Petroleum Distributors Inc

Petroleum Market Products

Petroleum Refiners Unlimited Inc

Petroleum Stripping Inc

Pipes Equipment Co Inc

Pitts

Pool Company

Post Office Vehicle Maintenance Facility

          Page 12 - Yoda Petroleum, Inc., State Superfund Site

                                                                    40
Presbyterian Hospital of Dallas

Prestige Ford

Preston Management Company

Preston Oil Service

Production Operators Inc

R & C Petroleum Inc

R & K Auto Repair Inc

Ralph Wilson Plastics

Rayco Oil Company

Reed Tool Company

Reeves Oil Co Inc

Repetro Inc

Retail Graphics Printing Company

Rhodes Oil

Richards-Gebaur AFB

Roadway Express Inc

Robison Cecil

Rock Tenn Converting Company

Rockwall

Rollins Leasing Corp

Royle Container

Ruan Leasing Company

           Page 13 - Yoda Petroleum, Inc., State Superfund Site

                                                                  41
Ryder Truck Rental Inc

SETI

SKI Oil Incorporated

The Sabine Mining Company

Safeway

Santos Radiator

Schepps Dairy Inc

Schlumberger Well Services Division of Schlumberger Technology
      Corporation

Sears Roebuck and Co

Senco Marketing

Service Oil Co

Servion Inc

Shell Oil Company

Shippers Car Line Inc

Shore Company Inc

Shreveport Truck Center

Sitton Oil

Snappy Lube Inc

Snow Coil Inc

S.ooner Refining Co Inc

South Coast Products Inc

Southeast Tex-Pack Express Inc

             Page 14 - Vada Petroleum, Inc., State Superfund Site

                                                                    42
Southern Gulf

Southern Plastics Inc

Southland Sales Corporation

Southwest Disposal

Southwestern Bell Telephone Company

Southwestern Electric Power Company

Southwestern Petroleum Corporation

Specialty Oil

Sprague Electric Company

Star Solvents Inc

Steel City Crane Rental Inc

Stemco Inc

Steve D Thompson Trucking Inc

The Stroh Brewery Company

Sullivan Transfer & Storage

Summit White GMC Trucks Inc

Sun Engine Sales Inc

T E C Well Service Inc

TanA Co

Tannehill Oil Products

Taylor Rental Center

Texaco Chemical Company

          Page 15 - Yoda Petroleum, Inc., State Superfund Site

                                                                 43
Texas Gas Transmission Corporation

Texas Industrial Disposal Inc

Texas Industries Inc

Texas Mill Supply- Longview Inc

Texas State Technical Institute Airport

Texas Utilities Generating Company

Thompson Trans

Toneys Garage

Trailways Inc

Tri con

Trinity Industries Inc

Triple L Disposal

Tri-State Oil Tools Inc

Triton Aviation Services Inc

Truckstops of America

Tuneup Masters Inc of Texas

Twin City Transmission Service Inc

Union Oil 76 Truck Stop

United Gas Pipe Line Company

United Press International

United States Army Corps of Engineers Mat Sinking Unit

Vanguard Sales

          Page 16 - Yoda Petroleum, Inc., Stale Superfund Sile

                                                                 44
     Varo hlc

     Vault Oil & Gas

     Viking Freight Service hlc

     Yoda Petroleum hlc

     Volvo White Truck Corporation

     · W F B Tank Bottom Reclaiming 9orp

     WW Waste Oil

     Warren Petroleum Company

     Westmoreland Joint Venture

     Western Auto Supply Company

     Westland Oil Company hlc

     Willamette fudustries Inc

     Woodline Motor Freight

     Woods Operating Co Inc

     Wray Ford Inc

     Yates SWD Corp

     Young Chevrolet hlc

     Zavala Energy Inc

     and these parties

1.   are the owners or operators of the Site;

2.   owned or operated the Site at the time of processing, storage, or disposal of
     any solid waste;

                Page 17 • Voda Petroleum, Inc., State Superfund Site

                                                                                     45
     3.     by contract, agreement, or otherwise, an·anged to process, store, or dispo;e
            of, or arranged with a transporter for transport to process, store, or dispose of
            solid waste owned or possessed by the PRPs or by any other person or entity
            at the Site; or

     4.     accepted solid waste for transport to the Site as selected by the PRP.

B.   Reserved.

C.   The following PRPs entered into this AO as Agreeing Respondents but do not admit
     liability regarding the Site except for the purpose of enforcing this AO.

     There are no Agreeing Respondents.

D.   When ranked, the Site had a State Superfund Hazard Ranking System ("HRS") score
     of23.6.

E.   The portion of the Site used for ranking on the State Registry of Superfund Sites is
     described as follows:

     All that certain lot, tract or parcel of land being situated in the David Ferguson
     Survey, Gregg County, Texas and being a part of a 6.12 acre tract ofland conveyed
     from Chaco, Inc. to Ultra Oil, Inc. in deed recorded in Vol. 1212, Page 252, Deed
     Records, Gregg County, Texas and being more particularly described as follows:

     BEGINNING at a 12" x 12" fence comer post on the north ROW ofDuncan Road,
     said point being the SE comer of a 50 acre tract conveyed from Charles McBride to
     Chaco, Inc. in deed recorded in Vol. 1206, Page 83, Deed Records, Gregg County,
     Texas and also being the SE comer of the herein described tract;

     THENCE along the SBL of the above mentioned 6.12 acre tract, also being the north
     ROW of Duncan Road:

            N 89 deg. 47' 06" W, a distance of 199.02 feet;

            S 63 deg. 18' 26" W, a distance of57.72 feet;

            S 89 deg. 55' 54" W, a distance of 120.65 feet to a Yi" iron rod for this most
            southerly SW comer, same being N 89 deg. 55' 54" E, 200.00 feet from the
            SW comer of said 6.12 acre tract;

     THENCE N 00 deg. 56' 53" W, a distance of200.00 feet to a W' iron rod for comer;

                      Page 18 - Yoda Petrolewn, Inc., State Superfund Site

                                                                                                46
       THENCE S 89 deg. 14' 07" W, a distance of 200.00 feet to a W' iron rod for this
       most northerly SW comer, same being located on the east ROW of Charise Drive and
       the WBL of said 6.12 acre tract and beingN 00 deg. 56' 53" W, 200.00 feet from the
       SW comer of same:

       THENCE N 00 deg. 56' 56" W, along the east ROW of said Charise Drive, a distance
       of 271.25 feet to a 5/8" iron rod for this NW comer, same being the NW comer of
       said 6.12 acre tract;

       THENCE N 89 deg. 03' E, along the NBL of said 6.12 acre tract, a distance of 578.45
       feet to a 5/8" iron rod for this NE comer, same being the NE comer of said 6.12 acre
       tract; ·

       THENCE S 00 deg. 04' 55" E along the EBL of said 6.12 acre tract, a distance of
       452. 78 feet to the Place of BEGINNING of the herein described tract and containing
       5.201 acres.

       The remainder, a contiguous 0.92 acre tract ofland, is described as follows:

       All that certain lot, tract or parcel of land being situated in the David Ferguson
       Survey, Gregg County, Texas and being a part of a 6.12 acre tract ofland conveyed
       from Chaco, Inc., to Ultra Oil, Inc., in deed recorded in Vol. 1212, page 252, Deed
       Records, Gregg County, Texas, and being more particularly described as follows:

       BEGINNING at a 5/8" iron rod set in the BBL of Charise Drive; THENCE North .
       with the BBL of Charise Drive 200 feet to a Yi'' iron rod; THENCE North 89 deg. 14'
       07" E, 200 feet to Yz" iron rod for comer, THENCE S 00 deg. 56' 53" E, a distance
       of200 feet to Yz" iron rod for comer: THENCE S 89 deg. 55' 54" W with the said
       SBL of said 6.12 acre tract, 200 feet to the point of BEGINNING, containg· [sic] 1
       acre of land, more or less, together with all improvements situated thereon.

F. .   The Site consists of the area listed in Paragraph E above. In addition, the Site
       includes any areas outside the area listed in Paragraph E above where as a result,
       either directly or indirectly, of a release of solid waste or hazardous substances from
       the area described in Paragraph E above, solid waste or hazardous substances have
       been deposited, stored, disposed of, or placed or have otherwise come to be located.

G.     The Site was proposed for listing on the State Registry of Superfund Sites in the
       Texas Register on November 17, 2000. 25 Tex. Reg. 11594-95 (Nov. 17, 2000).

H.     The Site historically has been used as a waste oil recycling facility.

                         Page 19 - Vada Petroleum, Inc., State Superfund Site

                                                                                                 47
I.   The Chemicals of Concern at the Site include those substances listed in Exhibit B.
     The substances listed in Exhibit B have been processed, deposited, stored, disposed
     of, or placed or have otheiwise come to be located on the Site.

J.   The substances listed in Exhibit B have been documented in surface and subsurface
     soil and groundwater at the Site.

K.   The substances listed in Exhibit B are:

     1.     substances designated under Section 31l(b)(2)(A) of the Federal Water
            Pollution Control Act, as amended (33 United States Code ("U.S.C.") Section
            1321);

     2.     elements, compounds, mixtures, solutions, or substances designated under
            Section 102 of the Comprehensive Environmental Response, Compensation,
            and Liability Act("CERCLA")(42 U.S.C. Section9601 et seq., as amended);

     3.     hazardous wastes having the characteristics identified under or listed under
            Section 3001 of the Federal Solid Waste Disposal Act, as amended (42
            U.S.C. Section 6921), excluding wastes, the regulation of which has been
            suspended by Act of Congress;

     4.     toxic pollutants listed under Section 307(a) of the Federal Water Pollution
            Control Act (33 U.S.C. Section 1317);

     5.     hazardous air pollutants listed under Section 112 of the Federal Clean Air
            Act, as amended (42 U.S.C. Section 7412); or

     6.     any imminently hazardous chemical substances or mixtures with respect to
            which the administrator ofthe Environmental Protection Agency ("EPA") has
            taken action under Section 7 of the Toxic Substances Control Act (15 U.S.C.
            Section 2606).

L.   The substances listed in Exhibit B include the following: garbage; rubbish; refuse;
     sludge from a waste treatment plant, water supply treatment plant, or air pollution
     control facility; or other discarded material, including solid, liquid, semisolid, or
     contained gaseous material resulting from industrial, municipal, commercial, mining,
     and agricultural operations and from community and institutional activities, or
     hazardous substances, for the purposes of TEX. HEALTH & SAFETY CODE Sections
     361.271through361.277 and 361.343 through 361.345.

M.   The substances listed in Exhibit B are solid wastes or hazardous substances.

                       Page 20 - Yoda Petroleum, Inc., State Superfund Site

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      N.     Solid wastes or hazardous substances at the Site listed in Exhibit Bare, or potentially
             are, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
             escaping, leaching, dumping, or disposing into the enviromnent.

      0.     Potential pathways for human exposure to the solid wastes or hazardous substances
             listed in Exhibit B include incidental ingestion of, inhalation of or dermal exposure
             to surface and/or subsurface soil, and ingestion of or dermal exposure to
             groundwater.

      P.     Exposure to levels of dichloroethylene, cis-1,2-; benzene; propylbenzene, n-; MTBE
             (methyl tertiary-butyl ether); tetrachloroethylene; toluene; trichloroethane, 1,1,1-;
             trichloroethylene; trimethylbenzene, 1,2,4-; trimethylbenzene, 1,3,5-; vinyl chloride;
             xylene, m-; xylene, o-; xylene, p-; dichloroethylene 1,1-; and dichloroethane, 1,2-
             found at the Site poses an unacceptable carcinogenic risk or an unacceptable toxicity
             risk.

      Q.     The solid wastes or hazardous substances at the Site are not capable of being
             managed separately under the remedial action plan.

      R.     On November 6, 2000, the Com.mission provided written notice of the proposed
             listing of the Site on the State Registry to each PRP identified as of that date at the
             PRP's last known address.

      S.    On September 12, 2008, the Commission provided written notice of the public
            meeting and of the opportunity to comment on the proposed Remedy as specified in
            Sections 361.187(b) and (c) of the Act to each PRP identified as of that date at the
            PRP's last known address.

      T.    On September 12, 2008, each PRP identified as of that date was provided an
            opportunity to fully fund or perform the proposed Remedial Activities, as specified
            in Sections 361.187(d) and 361.133(c) of the Act.

      U.    No voluntary actions have been undertaken at the Site by any PRPs.

      V.    The Remedy Selection Document ("RSD") for the Site is attached to this AO as
            Exhibit A.

      W.    The remedy adopted in Exhibit A is selected as the Remedy to be implemented in
            accordance with this AO.

ID.   Conclusions of Law and Determinations

      A.    The PRPs listed in Section II (Findings of Fact) Paragraph A are responsible parties
            ("RPs") pursuant to Section 361.271 of the Act.

                               Page 21 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                       49
B.   Some ofthe substances referenced in Section II (Findings ofFact) Paragraph I, which
     are found at the Site, are hazardous substances as defined in Section 361.003(11) of
     the Act.

C.   Some ofthe substances referenced in Section II (Findings ofFact) Paragraph I, which
     are found at the Site, are solid wastes as defined in Section 361.003(34) of the Act.

D.   Hazardous substances were deposited, stored, disposed of, or placed or otherwise
     came to be located at the Site; and solid wastes were stored, processed, disposed of,
     or discarded at the Site.

E.   The Site is a facility as defined in Section 361.18l(c) of the Act.

F.   The Site is a solid waste facility as defined in Section 361.003(36) of the Act.

G.   "Imminent and substantial endangerment" is defined by rule as follows: A danger is
     imminent if, given the entire circumstances surrounding each case, exposure of
     persons or the environment to hazardous substances is more likely than not to occur
     in the absence of preventive action. A danger is substantial if, given the current state
     of scientific knowledge, the harm to public health and safety or the environment
     which would result from exposure could cause adverse environmental or health
     effects. 30 TEX. ADMIN. CODE Section 335.342(9).

H.   There has been a release (as defined in Section 361.003(28) ofthe Act) or threatened
     release of hazardous substances or solid wastes into the environment at the Site that
     poses an imminent and substantial endangerment (as defined in 30 TEX. ADMIN.
     CODE Section 335.342(9)) to the public health and safety or the environment; and
     therefore, the Site will be listed on the State Registry of Super.fund Sites as per
     Section V (Order) Paragraph A.

I.   The release or threatened release of hazardous substances or solid wastes into the
     environment at or from the Site has not been proven to be divisible pursuant to
     Section 361.276 of the Act.

J.   The actions required by this AO are reasonable and necessary to protect the public
     health and safety or the environment.

K.   The Site is ineligible for listing on the National Priorities List ("NPL") because the
     HRS score was below 28.5.

L.   Funds from the Federal Government are unavailable for the Remedial Activities at
     this Site because it is ineligible for the NPL.

                       Page 22 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                50
N.   Exhibits and Definitions

     A.     The following exhibits are incorporated by reference into this AO:

            "Exhibit A"    Remedy Selection Document

            "Exhibit B"    List of Solid Wastes and Hazardous Substances at the Site

            "Exhibit C"    Field Sampling Plan Contents Outline

     B.     The following terms have the meaning set out below:

           "Agreeing Respondent"                The PRPs listed in Section II (Findings of Fact)
                                                Paragraph C that fund or perform the Work and have
                                                agreed to the terms and conditions of this AO as
                                                evidenced by signing a consent form.
           "Chemicals of Concern"              Any chemical that has the potential to adversely affect
                                               ecological or human receptors due to its concentration,
                                               distribution, and mode of toxicity.
           "Day''                               A calendar day.

           "Defaulting Performing              Any Performing Party that fails to comply with the
           Party''                             terms or conditions of this AO.

           ''Demobilization''                  The dismantling and removal of all construction
                                               equipment from the Site.

           "Effective Date"                    The Day ten (10) Days after the issue date of this AO.

           "Executive Director                 The Executive Director of the TCEQ or a designee.
           (ED)"
           "include"                           Use of the term include, in all its forms, in this AO is
                                               intended to express an enlargement or illustrative
                                               application specifying a particular thing already
                                               included within the preceding general words. It is not
                                               used as a term of limitation.

           "Institutional Control"             A legal instrument which indicates the limitations on or
                                               the conditions governing use of the property which
                                               ensures protection of human health and the
                                               environment in accordance with 30 TEX. ADMIN. CODE
                                               Chapter 350 and as required by the Remedy.

           "Parties"                           Collectively, the Respondents and the Commission.

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                                                                                                          51
"Performing Parties"             Collectively, the Agreeing Respondents and persons
                                 that did not enter into this AO but that fund or perform
                                 the Work.
"Post Construction               All Remedial Activities at the Site, subsequent to
Activities (PCA)"                issuance of the Approval of RA Completion, required
                                 to complete the Remedial Activities in accordance with
                                 this AO.
"Post Construction Cost·         An estimate of the cost to perform all of the PCA for as
Estimate"                        long as post constmction activities are needed.
"Project Manager"                The individual designated by the ED to oversee
                                 implementation of the Work and to coordinate
                                 communications with the Agreeing Respondents or, if
                                 there are no Agreeing Respondents to this AO, the
                                 Performing Parties.
"Remedial Action (RA)"           Those Remedial Activities, except for Post
                                 Construction Activities, undertaken at the Site,
                                 including on-site physical construction and any
                                 required institutional controls, to implement the
                                 Remedy. The areal extent of the RA is not limited to
                                 the Site. It includes all suitable areas in proximity to
                                 the Site necessary for implementation of the Remedial
                                 Activities.
"Remedial Activities"           The RD, RA, PCA, and any other actions required to
                                implement and maintain the Remedy pursuant to the
                                RSD and 30 TEX. ADMIN. CODE Chapter 335,
                                Subchapter Kand 30 TEX. ADMIN. CODE Chapter 350.
"Remedial Activities            The individual, company, or companies retained by the
Contractors"                    Agreeing Respondents, or if there are no Agreeing
                                Respondents to this AO, by the Performing Parties to
                                undertake any or all phases of the Remedial Activities.
                                Remedial Activities Contractors cannot assume the role
                                of any quality assurance official required by this AO.

"Remedial Design (RD)"          Those Remedial Activities during which engineering
                                plans and technical specifications are developed for the
                                Remedy.

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                                                                                            52
"Remediation Goals"              Cleanup standards or other measures of achievement of
                                 the goals of the Remedy, consistent with the Act, 30
                                 TEX. ADMIN. CODE Chapter 335, Subchapter Kand 30
                                 TEX. ADMIN. CODE Chapter 350, determined by ED to
                                 be necessary at the Site to achieve and to maintain the
                                 Remedy.
"Remedy"                         The Remedy adopted for the Site in the Remedy
                                 Selection Document to clean up or control exposure at
                                 the Site in accordance with all applicable laws and
                                 regulations·and to be implemented in accordance with
                                 this AO.     The Remedy includes all applicable
                                 requirements contained in the Act, 30 TEX. ADMIN.
                                 CODE Chapter 335, Subchapter Kand 30 TEX. ADMIN.
                                 CODE Chapter 350.
"Remedy Selection                The document that was developed for the Site, based
Document (RSD)"                  on Site specific information, that specifies the Remedy,
                                 and that was adopted by the ED and TCEQ after the
                                 opportunity for public review and comment.
"Responsible Parties"            The PRPs listed in Section II (Findings ofFact)
                                 Paragraph A.
"Respondents" .                  Collectively, the Agreeing Respondents, the RPs, and
                                 the Performing Parties.
"Samples"                        Samples of environmental media taken pursuant to and
                                 in accordance with this AO.
"Sections"                       Those major divisions ofthis AO designated by Roman
                                 numerals.
"Site Coordinator"               The individual designated by the Agreeing
                                 Respondents, or if there are no Agreeing Respondents
                                 to this AO, the Performing Parties to oversee the
                                 Remedial Activities Contractors and the
                                 implementation of the Remedial Activities and to
                                 coordinate communications with the ED.

"Site Representative"            A person designated by the Project Manager that is
                                 authorized to oversee the Remedial Activities.

                  Page 25 - Voda Petroleum, Inc., State Superfund Site

                                                                                            53
             "Substantial                      The point, as determined by the ED in his sole
             Completion"                       discretion, at which the Work (or a specified part
                                               thereof) has been substantially completed in accordance
                                               with any work plans or documents required to be
                                               developed pursuant to this AO.
             "Work"                            All activities to be undertaken or performed m
                                               accordance with and as required by this AO.

V.   Order

     Therefore, the TCEQ orders:

     A.      The Site will be listed on the State Registry of Superfund Sites.

     B.      Reserved.

     C.      Respondents shall reimburse the Hazardous and Solid Waste Remediation Fee
             Account for all of the ED's costs of the Remedial fuvestigation ("Rf') and the
             Feasibility Study ("FS"), including the oversight costs of these activities.
             Respondents shall reimburse the Hazardous and Solid Waste Fee Account for all
             uncompensated Pre-Remedial Investigation costs, including oversight costs of these
             activities.

             The RPs and any Defaulting Performing Parties shall reimburse the Hazardous and
             Solid Waste Remediation Fee Account for all costs incurred by the ED in
             implementing and in overseeing the Work and for any costs incurred by the ED for
             activities other than the RI and FS to the extent that such costs have not been paid.

             Reimbursement is to be made within forty-five (45) Days after the ED transmits a
             Demand L1::tter stating the amount owed. Payment is to be paid by cashiers check or
             money ord.er. All payments and accompanying letters or documentation should
             contain the following information: "Yoda Petroleum, Inc. State Superfund Site,"
             "Cost Recovery Funds for the Hazardous and Solid Waste Remediation Fee Account
             (Fund 550} ofthe State ofTexas," "PCA Code 50482," "Docket Number 2009-1706-
             SPF," and "TCEQ Project Manager, Carol Boucher, P.G." All payments and
             accompanying letters or documentation should be mailed to: Cashier's Office, MC-
             214, TCEQ, Re: Yoda Petroleum, Inc. State Superfund Site, P.O. Box 13088, Austin,
             TX 78711.-3088. All checks and money orders shall be payable to the "Texas
             Commission on Environmental Quality," or "TCEQ." The requirement to make such
             payments will survive the termination of this AO in accordance with Section XXXIII
             (Termination of the Administrative Order).

                               Page 26 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                         54
D.   This AO applies to and is binding upon Respondents, their agents, successors, and
     assigns. Respondents are jointly and severally responsible for carrying out the Work.
     Performance of any or all of the Work by the Performing Parties or Agreeing
     Respondents shall not excuse any other Respondent from such performance. Upon
     performance by any Respondent of Remedial Activities, either alone or in
     conjunction with other Performing Parties, such Respondent shall, from such
     performance forward, become a Performing Party. Such performance by a
     Respondent of some ofthe Remedial Activities does not excuse the Respondent from
     performance of those Remedial Activities that took place prior to the Respondent
     becoming a Performing Party or any other preexisting requirement of this AO. No
     change in the ownership or corporate status and no acquisition of a Respondent will
     alter its respective responsibilities under this AO.

E.   Respondents that own or lease real property at the Site shall provide a copy of this
     AO to all of their lessees or sublessees of the Site until such time as this AO is
     terminated in accordance with Section XXXIII {Termination of the Administrative
     Order) and to any prospective owners or successors before all or substantially all
     property rights, stock, or assets are transferred.

F.   Respondents shall provide a copy of this AO to all contractors, subcontractors,
     laboratories, and consultants retained by Respondents to perform any or all of the
     Work within thirty (30) Days after the Effective Date or on the date such services are
     retained, whichever date occurs later. Notwithstanding the terms of any contract,
     Respondents remain responsible for compliance with this AO and for ensuring that
     their contractors and agents comply with this AO.

G.   Within forty-five (45) Days after the Effective Date each Respondent that owns real
     property at the Site shall record a copy or copies of this AO, with all exhibits, in the
     appropriate office where land ownership and transfer records are filed or recorded,
     and shall ensure that the recording of this AO is properly indexed to each and every
     property comprising any part or all of the Site so as to provide notice to third parties
     of the issuance and terms of this AO with respect to those properties. Each
     Respondent that owns real property comprising all or any part of the Site shall, within
     sixty ( 60) Days after the Effective Date, send notice of such recording and indexing
     to the ED. The obligations and restrictions of this AO run with the land and are
     binding upon any and all persons who acquire any interest in any real property
     comprising all or any part of the Site.

     Not later than ninety (90) Days before any transfer of any property interest in any
     property included within the Site and in accordance with Section XII (Notices and
     Submittals) Respondents that own or lease such real prope1iy shall submit the
     transfer documents to the ED.

                       Page 27 - Voda Petrolewn, Inc., State Superfund Site

                                                                                                55
H.   In accordance with Section 361.1855 of the Act and for the purpose of selecting the
     Remedy, the ED has selected commercial/industrial as the appropriate land use for
     the Site. Any change in use of any or all of the Site must comply with Section
     361.190 of the Act.

I.   A qualified Remedial Activities Contractor shall direct and supervise all aspects of
     the Remedial Activities. Within ten (10) Days after the Effective Date each
     Respondent that is not an Agreeing Respondent shall notify the ED of its intent to
     perfonn the Work.

     In addition to fulfilling the requirements of Section VIII (Project Manager/Site
     Coordinator) Paragraph C, within ten (10) Days after the Effective Date, Agreeing
     Respondents or, if there are no Agreeing Respondents, Perfonning Parties shall
     notify the ED in writing of the name, title, qualifications, relevant licenses, and
     pennits of the Site Coordinator and Remedial Activities Contractor proposed to be
     used in carrying out the Remedial Activities. The Agreeing Respondents shall
     demonstrate or, ifthere are no Agreeing Respondents, the Perfonning Parties shall
     demonstrate that each proposed Remedial Activities Contractor has any licenses
     necessary to do business in the State of Texas and permits necessary to perfonn any
     or all of the Remedial Activities. If at any time the Agreeing Respondents or, ifthere
     are no Agreeing Respondents, Performing Parties propose to use a different Remedial
     Activities Contractor, the Agreeing Respondents or Performing Parties, as
     appropriate, shall notify the ED before the new Remedial Activities Contractor
     perfonns any of the Remedial Activities. The Agreeing Respondents' Site
     Coordinator shall be the Project Manager's and Site Representative's point of
     contact for all Performing Parties. All Performing Parties must coordinate with and
     cooperate with any Agreeing Respondents in the performance of any and all of the
     Work.

J.   The Remedy may be modified as specified in 30 TEX. ADMIN. CODE Section
     335.349. Except as specified in the previous sentence and in Section XVIII
     (Extension of Deadlines), the tenns of this AO may be amended upon approval by
     the Commission after notice to all Respondents.

K.   Respondents shall provide all the necessary infonnation and assistance for TCEQ's
     Community Relations personnel to implement the Community Relations Plan.

L.   All ED-approved final submittals, documents, plans, and reports required to be
     developed and approved by the ED pursuant to this AO will be incorporated in and
     enforceable under this AO.

M.   In complying with this AO, Respondents shall at all times comply with the
     requirements of the Act and 30 TEX. ADMIN. CODE Chapter 335, Subchapter Kand
     30 TEX. ADMIN. CODE Chapter 350, as applicable.

                       Page 28 - Yoda Petroleum, Inc., State Superfund Site

                                                                                              56
VI.   Remedial Activities

      A.     The Respondents shall undertake the Remedial Activities in the following phases:

             Remedial Design ("RD");

             Remedial Action ("RA"); and

             Post Construction Activity ("PCA").

            The ED may, in his sole discretion, waive, in writing, a requirement to submit any
            report, submittal, document or plan otherwise required to be submitted by this AO.

      B.     Remedial Design

             1.     Not later than ten (10) Days after the Effective Date, Respondents shall
                    submit a Design Concept Memorandum ("DCM") to the ED for review,
                    comment, and approval. Respondents must submit a DCM that includes:

                    a.      Description of key performance and design criteria for the Remedy
                            necessary to meet the requirements of the Remedy Selection
                            Document;

                   b.       Identification of all significant design options that may be considered
                            by the design professional to meet the required performance and
                            design criteria and the proposed option(s) to meet those criteria; and,

                    c.      Identification ofpotential problems and unresolved issues which may
                            affect the timely completion of the RD, RA and PCA, and proposed
                            solutions to those problems.

            2.     Within thirty (30) Days after the ED approves the DCM, Respondents shall:

                   a.       Obtain written landowner consent for any institutional control to be
                            placed on the land records for any or all of the Site as required by this
                            AO or byTCEQ rule and submit a copy of the consent to the ED; and

                   b.       Submit a Preliminary RD to the ED for review, comment, and
                            approval.

            3.     The Respondents shall submit a Preliminary RD that meets the requirements
                   as set forth in this Section and consists of a 30% completion of all sections
                   of the following RD submittals:

                              Page 29 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                        57
     RA Schedule;

     RA Field Sampling Plan ("RA FSP");

     Remedial Action Construction Quality Assurance Project Plan ("RA C-
     QAPP");

     RA Plans and Specifications;

     RA Health and Safety Plan ("RA HASP"); and

     Post Construction Activity Plan ("PCA Plan").

4.   The RA Schedule will describe the sequence, dependency on other activities,
     and duration of each activity to be conducted during the RA including Project
     Milestones (which will be subject to the provisions of Section XXI
     (Stipulated Penalties), Paragraph D) and the specific mobilization date to
     begin the RA.

5.   The RA Sampling and Analysis Plan (RA SAP) and RA C-QAPP will
     describe the means of assuring quality during the RA and will specify a
     quality assurance official ("Respondent QA Official"), independent of the
     RA Contractors, to conduct a quality assurance program during the RA.

     a.     The RA SAP will be comprised of the RA FSP and the "Texas
            Commission on Environmental Quality Superfund Cleanup Section,
            Remediation Division, Quality Assurance Project Plan for the
            Superfund Program" (Program QAPP) which is most current as ofthe
            Effective Date of this AO. The RA SAP will address sampling and
            analysis relating to environmental parameters which may present
            toxic risk to human health or the environment. Respondents and their
            contractors and subcontractors, including analytical laboratories, shall
            strictly adhere to all requirements of the approved RA SAP.

     b.     The Program QAPP text will not be altered. Alterations to the
            Program QAPP necessitated by project specific circumstances will be
            effected by appropriate notation in Section 8.0 "Exceptions,
            Additions and Changes to the Program QAPP" of the RA FSP.

     c.     The RA FSP will include:

            i)          All data required by the Program QAPP and the contents
                        outline attached as Exhibit C to this AO;

                 Page 30 - Yoda Petroleum, Inc., State Superfund Site

                                                                                       58
     ii)           Data Quality Objectives ("DQO's") which provide for the
                   collection and analysis of a sufficient quantity and quality of
                   data to demonstrate attainment of the Remediation Goals and
                   to demonstrate protection of off-site receptors from exposure
                   to Chemicals of Concern during the RA; DQO's will be
                   developed in accordance with EPA "Guidance for the Data
                   Quality Objectives Process, EPA QA/G-4"; and

     iii)         A perimeter air monitoring plan including the action levels
                  necessary to protect off-site receptors from exposure to the
                  Chemicals of Concern; the Chemicals of Concern to be
                  sampled; the kinds of sampling techniques to be used to
                  sample; the number, type, and location of monitors; the
                  calibration methods and schedule; and the sampling and
                  reporting frequency.

d.   In regard to laboratories and laboratory analytical work, Respondents
     shall:

     i)           Ensure that all contracts with laboratories utilized by
                  Respondents for analysis of Samples provide for access to
                  those laboratories by the ED's personnel and the ED's auth-
                  orized representatives to assure the accuracy of laboratory
                  results related to the Site.

     ii)          Ensure that each laboratory it may use is qualified to conduct
                  the proposed work. This includes use of methods and
                  analytical protocols for the Chemicals of Concern in the
                  media of interest within detection and quantitation limits
                  consistent with both QA/QC procedures and approved DQOs
                  for the site. The Respondent QA Official shall provide written
                  certification that it has reviewed the laboratory's Quality
                  Assurance Plan and capabilities and has determined that:

                  (a)         The laboratory has a documented quality assurance
                              program in place that is generally consistent with
                              National Environmental Laboratory Accreditation
                              Conference (NELAC) standards;

                  (b)         The laboratory has demonstrated and documented
                              proficiency with each sample preparation and
                              determinative combination to be used on the project;

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                                                                             59
                          (c)         The laboratory has documented standard operating
                                      procedures for each of the methods required for the
                                      project; and,

                          (d)         The laboratory has the capability of meeting the
                                      analytical objectives for the project.

                         A table which presents the laboratory's method detection
                         limits and quantitation limits and the preliminary remediation
                         goal for each analyte of concern, and a table that presents the
                         laboratory's control limits for quality control parameters, i.e.,
                         surrogates, matrix spike/matrix spike duplicate samples, and
                         laboratory control samples must be submitted along with the
                         certification letter and must be submitted attached or inserted
                         into the RA FSP.

            iii)         Ensure that all laboratories used for analysis of Samples are
                         acceptable to the ED. A laboratory may be deemed
                         unacceptable for any of the following reasons:

                         (a)         repeated or numerous deficiencies found in the
                                     laboratory quality assurance program during the ED' s
                                     or EPA' s laboratory inspections;

                         (b)         repeated or numerous deficiencies in laboratory
                                     performance;

                         (c)         debarment by EPA; or

                         (d)         failure to comply with any requirement or criteria of
                                     the Program QAPP or this AO.

            iv)          Ensure that all data submitted to the agency is produced by
                         laboratories accredited by TCEQ according to 30 TEX.
                         ADMIN. CODE Chapter 25 (relating to Environmental Testing
                         Laboratory Accreditation and Certification) Subchapters A
                         andB.

6.   The RA C-QAPP will describe the activities necessary to ensure that the
     Remedy is constructed to meet or exceed all design criteria, plans,
     specifications, and all applicable Remediation Goals. The RA C-QAPP will
     address sampling and analysis relating to physical properties of constructed
     engineered controls which must meet specified criteria to ensure the long-
     term performance of those features (e.g. physical soil properties of soil

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                                                                                             60
     backfill or constmcted clay caps, physical properties of geotextiles and liner
     materials, leak testing of piping systems and containment vessels, etc.). At a
     minimum, the RA C-QAPP will include the following elements:

     a.     The responsibility and authority of organizations and key personnel
            involved in designing and constmcting the RA;

     b.     The qualifications of the Respondent QA Official(s) and supporting
            inspection personnel;

     c.     The observations and tests that will be used to ensure that the
            construction meets or exceeds all design criteria, plans and
            specifications and all applicable Remediation Goals;

     d.     The sampling activities, sample size, methods for determining
            locations, frequency of sampling, acceptance and rejection criteria,
            and methods for ensuring that corrective measures are implemented;
            and

     e.     Detailed reporting requirements.

7.   The RA Plans and Specifications will establish the sequences, procedures and
     requirements to be implemented at the Site including at a minimum:

     a.     Demolition activities including monitor well                  closure,
            decontamination, environmental controls, and disposal.

     b.     Excavation activities including: establishment of limits of initial
            excavation for surface and subsurface soils with provisions for field
            controls; excavation materials handling including stockpiling;
            excavation confirmation sampling; backfill procedures; air emissions
            control; stormwater management; cross-contamination prevention;
            and equipment and personnel decontamination procedures and
            facilities.

     c.     Estimated quantities of material to be excavated and estimated
            quantities of materials to be disposed of off-site.

     d.     Site restoration activities, including backfill materials, compaction,
            and final cover.

     e.     Plans including at a minimum:

            i)          Site plan;

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                                                                                      61
             ii)          Demolition plan;

             iii)         Excavation plan, plan view;

             iv)          Excavation plan, sections;

             v)           Monitor well construction details;

             vi)          Final Site grading plan;

             vii)         Construction details; and

             viii)        All other plans and specifications necessary to describe
                          sequences, procedures, and requirements to conduct the
                          Remedial Activities in a manner protective of human health
                          and the environment.

8.   The RA HASP will specify the procedures that are sufficient to protect on-
     site personnel and the public from the physical, chemical and/or biological
     hazards of the site. The HASP will address all requirements of 29 CFR
     Chapter XVII - "Occupational Safety and Health Administration (OSHA),
     Department of Labor," 40 C.F.R. § 35.6015(a)(21) "Health and Safety Plan,"
     and all applicable safety regulations, ordinances and statutes pertaining to the
     safety of on-site personnel and the public. The HASP and any revi~ions or
     addenda will be reviewed and signed by a Board Certified Industrial
     Hygienist.

     The TCEQ relies on the Respondent in the preparation of an adequate HASP.
     However, TCEQ reserves the right to review and provide comments on the
     Respondent's HASP. If TCEQ provides comments, they constitute only
     general safety guidelines which are not intended to cause the Respondent to
     reduce the level of protection. Any language in the comments or in this AO
     which appears to give the TCEQ the right to direct or control the
     Respondent's means, methods and details of the Work shall be deemed to
     mean that the Respondent will follow TCEQ's desires only as to the results
     of the Work. The Respondent is solely responsible for preparing an adequate
     HASP, for complying with the RD and the applicable safety laws and
     regulations, for performing the Work in a safe manner and for protecting the
     health and safety of on-site personnel and the public. The Respondent shall
     address the TCEQ's comments and concerns and if necessary submit a
     revised HASP. TCEQ notation of "approval," "acceptance," or similar
     language in response to a HASP submittal for review shall not alter the
     responsibilities of the parties as described in this Section. In the event that
     TCEQ notes a HASP "approved" or "accepted" or uses similar language to

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                                                                                        62
     indicate that there are no further comments, such notation shall be deemed to
     mean only:

     We have reviewed your HASP under the AO provision reserving the right for
     TCEQ to review and provide comments constituting general safety guidelines
     (not intended to cause the Respondent to reduce the level ofprotection). The
     reviewer(s) might not be Board Certified Industrial Hygienist or any other
     type ofsafety professional. We have no comments (or further comments) at
     this time on your HASP. We recognize this HASP as your final HASP. Ifyou
     change this HASP you must submit a revision or addendum for review and
     potential comment in accordance with this AO.

     Do not rely on TCEQ review or comments (or lack thereof) on your HASP
     for any purposes.

     By telling you we have no comments (or further comments) we are not
     assuming responsibility for your means, methods, details or sequences, nor
     are we assuming any duty of protection to you, your employees, your
     subcontractors or suppliers, or their employees, or to any third party. Any
     language in the comments or in this AO which appears to give the TCEQ the
     right to direct or control your means, methods and details of the Work shall
     be deemed to mean that you will follow TCEQ 's desires only as to the results
     ofthe Work. You are solely responsible for preparing and implementing an
     adequate HASP, for complying with the RD and the applicable safety
     regulations, ordinances and statutes, for performing the Work in a safe
     manner and for protecting the health and safety ofon-site personnel and the
     public.

9.   The PCA Plan will describe all sequences, procedures and requirements for
     implementing the PCA. The PCA Plan will, at a minimum, include the
     following:

     a.     A Post Construction Sampling and Analysis Plan ("PC SAP") and
            Post Construction Quality Assurance Project Plan ("PC-QAPP")
            meeting the criteria established herein for the RA SAP and RA C-
            QAPP but addressing all sampling and analyses relating to PCA;

     b.     Post Construction Plans and Specifications necessary to assure that
            the Remedial Activities attain and maintain the Remediation Goals;

     c.     A PCA Schedule describing the sequence, dependency on other
            activities, and duration of each activity to be conducted during the
            PCA including Project Milestones (which will be subject to Section

               Page 35. Yoda Petroleum, Inc., State Superfund Site

                                                                                     63
              XXI Stipulated Penalties Paragraph D), and the specific mobilization
              date to begin the PCA;

      d.      A Post Construction Cost Estimate providing an estimate for a
              qualified third party to perform all of the tasks necessary for post
              construction for as long as PCA are needed, in accordance with the
              PCA Schedule; and

      e.      A Post Construction Activities HASP ("PCA HASP") which meets
              all of the requirements specified above for the RA HASP but which
              is appropriate to protect on-site personnel and the public from any
              physical, chemical and/or biological hazards of the site relating to the
              Post Closure period and activities.

10.   Within thirty (30) Days after the ED provides written comments to the Site
      Coordinator on the Preliminary RD, Respondents shall submit a Pre-Final RD
      to the ED for review, comment, and approval. The Pre-Final RD will consist
      of 95% RD submittals. Respondents shall address the ED's comments on
      the Preliminary RD and submit a summary note which clearly and explicitly
      indicates how each comment by the ED on the Preliminary RD has been
      satisfactorily addressed and which will also identify all other revisions or
      changes from the Preliminary RD.

11.   Within twenty (20) Days after the ED provides the Site Coordinator with the
      ED's written comments on the Pre-Final RD, Respondents shall submit the
      Final RD, prepared and sealed by a Professional Engineer registered in the
      State of Texas, to the ED. The Final RD will consist of 100% complete RD
      submittals except the PCA Plan. A Professional Engineer shall include a
      certification that the design was prepared to attain all Remediation Goals
      upon implementation. Respondents shall address the ED' s comments on the
      Pre-Final RD and submit a summary note which clearly and explicitly
      indicates how each of the ED's comments on the Pre-Final RD has been
      satisfactorily addressed and which will also identify all other revisions or
      changes from the Pre-Final RD.

12.   The ED will notify the Site Coordinatorofhis approval or disapproval of the
      Final RD including written comments. Within fifteen ( 15) Days after the ED
      provides written comments to the Site Coordinator, Respondents shall
      resubmit the Final RD, in both clean and redline, strikeout format, with a
      summary note which clearly and explicitly indicates how each of the ED's
      comments on the previous draft of the Final RD has been satisfactorily
      addressed and which will also discuss all other revisions or changes from the
      previous draft of the Final RD.

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                                                                                         64
                 13.     The ED will notify the Site Coordinator of his approval or disapproval of
                         each resubmittal of the Final RD. Each resubmittal will be submitted as
                         specified in Paragraph 12 above. Disapproval of the first resubmittal, and
                         each subsequent resubmittal, is subject to assessment of stipulated penalties
                         in accordance with Section XXI (Stipulated Penalties).

                 14.     Upon the ED's approval, the documents comprising the Final RD will be
                         incorporated as requirements into and will be enforceable under this AO.

        C.      Remedial Action

                 1.      Respondents and Respondents' contractors and subcontractors shall not
                         mobilize to the Site until the Final RD is approved by the TCEQ. Under no
                         circumstance will mobilization occur prior to TCEQ approval of the RA
                         HASP. 2 The Respondents will be responsible for initiating, maintaining, and
                         supervising all safety precautions and programs required for the protection of
                         all persons who may be affected by the Work, the Work, and any property
                         which maybe affected by the Work.

                2.       As soon as practicable after the award of any contract to ship solid wastes
                         and/or hazardous substances from the Site and prior to any such actual
                         shipment, Respondents shall submit to the Project Manager a written
                         certification containing all relevant information regarding such shipments.
                         The certification will include:

                         a.      The name and location of the facility to which the solid wastes and/or
                                 hazardous substances are to be shipped;

                         b.      The type and quantity ofthe solid wastes and/or hazardous substances
                                 to be shipped;

                         c.      The expected schedule for the shipment of the solid wastes and/or
                                 hazardous substances; and

                         d.      The method of transportation and the name, address, and phone
                                 number of the transporter.

                3.      In addition, Respondents shall certify that:

                        a.       No enforcement order is currently imposed on any selected receiving
                                 facility or transporter by any regulating authorities;

        2
        TCEQ's "approval" or "acceptance" of the HASP will be given the meaning as explained in Section VI
(Remedial Activities) Paragraph B.8.

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                                                                                                             65
     b.      The selected receiving facility and transporter are permitted to accept
             the specific solid wastes and/or hazardous substances to be shipped
             from the Site by all appropriate regulating authorities; and

     c.      After appropriate inquiry, they have no knowledge that either the
             se:lected receiving facility or transporter is non-compliant with any
             federal, state, or local requirement.

4.   The ED may inspect the Remedial Activities and/or the Site at any time to
     evaluate compliance with this AO.

5.   At least ten (10) Days prior to the expected date of achieving Substantial
     Completion of the RA, the Site Coordinator shall conduct a pre-Substantial
     Completion inspection and shall develop and submit to the ED a preliminary
     punch list identifying any nonconformance with the requirements of the RA
     Plans and Specifications.

6.   At the same time that the Performing Parties submit the Substantial
     Completion punch list, they shall schedule a Substantial Completion
     inspection by the ED. The Site Coordinator shall accompany the ED during
     the Substantial Completion inspection.

7.   Within 10 Days after the ED's on-site inspection, the Respondents shall
     submit to the ED in writing a revised punch list incorporating any
     deficiencies identified by the ED during the Substantial Completion
     inspection, indicating those deficiencies that are completely addressed and
     providing a proposed schedule and list of activities necessary to complete the
     RA. The ED will notify the Site Coordinator in writing of his approval or
     disapproval .of the revised punch list.

     If the ED disapproves the revised punch list, the ED will provide written
     comments to the Site Coordinator. Within ten (10) Days after the ED
     provides written comments to the Site Coordinator on the revised punch list,
     Respondents shall submit a final punch list, in both clean and redline,
     strikeout format, with a summary note that clearly and explicitly indicates
     how each of the ED's comments on the revised punch list has been
     satisfactorily addressed. The ED will notify the Site Coordinator of his
     approval or disapproval of the final punch list with comments. Ifdisapproved
     by the ED, within fifteen (15) Days after the ED provides written comments,
     Respondents shall resubmit the final punch list. The ED will notify the Site
     Coordinator of his approval or disapproval of each resubmittal of the final
     punch list. Disapproval of the first resubmittal and each subsequent
     resubmittal is subject to assessment of stipulated penalties in accordance with
     Section XXI (Stipulated Penalties).

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                                                                                       66
8.    When Respondents believe that they have completed the RA, they shall
      submit a certification to the ED that the RA is complete. If the ED identifies
      RA items to be corrected or completed, Respondents shall immediately
      correct or complete these items.

9.    Within forty five (45) Days after Respondents certify that the RA is complete,
      Respondents shall submit to the ED a draft RA Report, containing the
      following:

      a.      A certification from a Professional Engineer licensed in the State of
              Texas that the RA has been completed in compliance with the Final
              RD and this AO and that the RA is complete;

      b.      All data collected during the RA and documentation of compliance
              with the terms of the RA Quality Assurance Project Plan and the RA
              Construction Quality Assurance Plan;

      c.      Copies of waste manifests for all Class II, Class I, and hazardous
              wastes and substances disposed of off-site;

      d.      As-built drawings showing:

              i)            Areas and depths of excavation, with verification sample
                            results by grid area;

              ii)          Final site plan with topographic contours;

      e.     Progress photographs;

      f.     Proposed areas for soil and groundwater that will require land use
             restrictions and/or other deed notices, certifications, or restrictions;
             and,

      g.     Proposed language for any institutional controls in accordance with
             and as required by this AO and TCEQ rules.

10.   The ED will notify the Site Coordinator of his approval or disapproval of the
      draft RA Report. If the ED disapproves the draft RA Report, the ED will
      provide written comments to the Site Coordinator.

11.   Within fifteen (15) Days after the ED provides written comments to the Site
      Coordinator on the draft RA Report, Respondents shall submit a final RA
      Report, in both clean and redline, strikeout format, with a summary note
      which clearly and explicitly indicates how each of the ED's comments on the

                    Page 39 - Yoda Petroleum, Inc., State Superfund Site

                                                                                        67
      draft RA Report has been satisfactorily addressed and which also discusses
      all other revisions or changes from the draft RA Report.

12.   The ED will notify the Site Coordinator of his approval or disapproval of the
      final RA Report with comments.

13.   If disapproved by the ED, within fifteen (15) Days after the ED provides
      written comments, Respondents shall resubmit the RA Report as specified in
      Paragraph 11 above. Each resubmittal will also be submitted in accordance
      with Paragraph 11 above.

14.   The ED will notify the Site Coordinator of his approval or disapproval of
      each resubmittal of the final RA Report including written comments.
      Disapproval of the first resubmittal and each subsequent resubmittal is
      subject to assessment of stipulated penalties in accordance with Section XXI
      (Stipulated Penalties).

15.   Within thirty (30) Days after approval of the final RA Report and after
      obtaining the required written landowner consent in accordance with
      Paragraph B.2 of this Section, Respondents shall:

      a.      record a copy or copies of any required institutional controls in
              compliance with the requirements found in 30 TEX. ADMIN. CODE
              Chapter 350.111 in the appropriate local or county office where land
              ownership and transfer records are filed or recorded;

      b.     ensure that the recording of these documents is properly indexed and
             recorded to each and every property at the Site in the appropriate
             office where land ownership and transfer records are filed so as to
             provide notice to third parties concerning those properties; and

      c.     send evidence of such recording, landowner consent, and indexing to
             the ED.

16.   After he approves the final RA Report, receives evidence of the filing of any
      institutional control from each property owner or other person as required by
      Section V (Order) Paragraph G, and determines that the financial assurance
      requirements of Paragraph E below have been satisfied, the ED will issue an
      Approval of RA Completion to the Agreeing Respondents, or if there are no
      Agreeing Respondents to this AO, any Performing Parties.

                Page 40 - Yoda Petroleum. Inc., State Superfund Site

                                                                                      68
D.   Post Construction Activity

     1.     Concurrent with the submittal ofthe preliminary punch list for the Substantial
            Completion inspection, the Site Coordinator shall 1) submit a list of the
            name, title, qualifications, relevant licenses and permits of the Remedial
            Activities Contractors proposed to be used in carrying out any or all of the
            PCA and 2) submit to the ED a Revised PCA Plan.

     2.     The ED will notify the Site Coordinator of his approval or disapproval of the
            Revised PCA Plan including written comments to the Site Coordinator.

     3.     Within fifteen ( 15) Days after the ED provides written comments to the Site
            Coordinator, Respondents shall submit the Final PCA Plan, in both clean and
            redline, strikeout format, with a summary note which clearly and explicitly
            indicates how each of the ED' s comments on the Revised PCA Plan has been
            satisfactorily addressed and which will also discuss all other revisions or
            changes from the Revised PCA Plan.

     4.     The ED will notify the Site Coordinator of his approval or disapproval of the
            submittal and each resubmittal of the Final PCA Plan. Each resubmittal will
            be submitted as specified in Paragraph 3 above. Disapproval of the first
            resubmittal and each subsequent resubmittal is subject to assessment of
            stipulated penalties in accordance with Section XXI (Stipulated Penalties).

     5.     Upon the ED's approval of the final PCA Plan, Respondents shall begin the
            PCA in accordance with the schedule included in the PCA Plan.

     6.     The Agreeing Respondent(s) shall submit a Five Year Review report to the
            TCEQ for TCEQ' s approval no later than five (5) years after the ED approves
            the Final Remedial Action for the Site. The Five Year Review report must
            be conducted in accordance with the U.S. Environmental Protection Agency's
            "Comprehensive Five-Year Review Guidance." The Agreeing Respondent(s)
            shall submit Five Year Review reports for the Site to the TCEQ every five ( 5)
            years unless and until the TCEQ approves cessation.

E.   Post Construction Financial Assurance.

     1.     Respondents shall provide financial assurance in the minimum amount of the
            final Post Construction Cost Estimate and shall maintain such financial
            assurance for the full duration of the PCA. Within ten (10) Days of the ED's
            approval of the PCA Plan, Respondents shall submit a written proposal for
            providing financial assurance to the ED for approval.

                      Page 41 - Yoda Petroleum, Inc., State Superfund Site

                                                                                             69
              2.      Subject to the ED's approval, financial assurance may be demonstrated by
                      one or a combination of the following mechanisms: letter of credit, surety
                      bond guaranteeing payment, surety bond guaranteeing performance, fully
                      funded trust, insurance, escrow account or other approved mechanism. Each
                      financial assurance document will be issued by an institution with the
                      authority to issue the document whose operations are regulated and examined
                      by a federal or state agency.

              3.      Within fifteen (15) Days after the ED provides written approval of
                      Respondents' proposed financial assurance mechanism to the Site
                      Coordinator, Respondents shall submit the necessary financial assurance
                      documents to the ED. The ED will notify the Site Coordinator of his
                      approval or disapproval ofthe financial assurance documents with comments.
                      If disapproved by the ED, within fifteen (15) Days after the ED provides
                      written comments to the Site Coordinator, Respondents shall resubmit the
                      financial assurance documents, in both clean and redline, strikeout format,
                      with a summary note which clearly and explicitly indicates how each of the
                      ED's comments on the previous draft of the financial assurance documents
                      has been satisfactorily addressed and which will also discuss all other
                      revisions or changes from the previous draft of the financial assurance
                      documents.

              4.      The ED will notify the Site Coordinator of his approval or disapproval, with
                      comments, of each resubmittal of the financial assurance documents. Each
                      resubmittal will be submitted in accordance with Paragraph 3 above.
                      Disapproval of the first resubmittal and each subsequent resubmittal is
                      subject to assessment of stipulated penalties in accordance with Section XXI
                      (Stipulated Penalties).

VII.   Failure to Attain Remediation Goals or Findings of Significant Difference

       A.     If at any point in the Remedial Activities the Performing Parties conclude that the
              Remedial Activities as implemented in accordance with this AO will not attain the
              Remediation Goals, or if the Performing Parties find that conditions at the Site differ
              from those that form the basis of the RSD and significantly change the scope,
              performance or costs of the Remedial Activities, then the Performing Parties shall
              take the actions specified in this Section.

       B.     Within ten (10) Pays after the Performing Parties initially determine that a failure to
              attain Remediation Goals or that a significant difference in the scope, performance
              or cost of the Remedial Activities as described in this Section exists, Performing
              Parties shall notify the ED of that determination with a description of its basis.

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                                                                                                        70
C.   Not later than sixty (60) Days after the initial assertion of a failure to attain
     Remediation Goals or of a significant difference in the scope, performance or cost
     of the Remedial Activities, the Performing Parties shall submit a Failure Evaluation
     Report to the ED for his approval.

D.   The Performing Parties shall submit a Failure Evaluation Report that meets the
     requirements ofthis Section. The Failure Evaluation Report will include a discussion
     of the following: the data related to the failure to attain Remediation Goals or to the
     assertion of a significant difference, conclusions concerning all such data, and any
     known cause of the failure to attain Remediation Goals or of the significant
     difference, and a recommendation for any necessary additional studies. Data
     presented in the Failure Evaluation Report will comply with the DQOs.

E.   The ED will not consider the failure of a design element or remedial action that is not
     required by this AO to be the basis for a failure to attain the Remediation Goals.

F.   The ED will consider differences in the quantity or extent of contaminants as the
     basis for a determination of a significant difference only when such differences are
     so significant as to cause the Remedy not to be the lowest cost alternative that is
     technologically feasible and reliable and that effectively mitigates and minimizes
     damage to and provides adequate protection of the public health and safety or the
     environment.

G.   After receipt of the Failure Evaluation Report, the ED will notify the Site
     Coordinator of his approval or disapproval of the report with comments. If the ED
     determines that the basis of the Performing Parties' assertion of a failure to attain
     Remediation Goals or of a significant difference is valid, no applicable stipulated
     penalties will be imposed for missed deadlines subsequent to the Performing Parties'
     notification made in accordance with Paragraph B above, except for failure to submit
     documents pursuant to this Section. If the ED determines that the basis of a failure
     to attain Remediation Goals or of an assertion of a significant difference is not valid,
     the ED will direct that Remedial Activities continue and that the Performing Parties
     pay any applicable stipulated penalties for any missed deadlines.

H.   Unless the ED approves the Failure Evaluation Report and/or directs continuation of
     Remedial Activities, within thirty (30) Days after the ED provides written comments
     to the Site Coordinator, the Performing Parties shall resubmit the Failure Evaluation
     Report, in both clean and redline, strikeout format, with a summary note which
     clearly and explicitly indicates how each of the ED' s comments on the previous draft
     ofthe Failure Evaluation Report has been satisfactorily addressed and which will also
     identify all other revisions or changes from the previous version of the Failure
     Evaluation Report.

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                                                                                                71
        I.     The ED will notify the Site Coordinator of his approval or disapproval, with
               comments, of each resubmittal of the Failure Evaluation Report. Each resubmittal
               will be submitted in accordance with Paragraph H above. Disapproval of the first
               resubmittal and each subsequent resubmittal is subject to assessment of stipulated
               penalties in accordance with Section XXI (Stipulated Penalties).

        J.     Not later than ninety (90) Days after a determination by the ED that the Remedy will
               not attain the Remediation Goals or a significant difference exists, the Respondents
               shall submit to the ED for approval a written report evaluating alternatives to the
               Remedial Activities and may submit a proposal for such alternative Remedial
               Activities as may be necessary to achieve the Remediation Goals. Any proposed
               alternatives must comply with the remedy selection criteria contained in 30 TEX.
               ADMIN CODE Chapter 335, Subchapter Kand 30 TEX. ADMIN. CODE Chapter 350.
               The Remedy may be modified, as stated in Section V (Order) Paragraph J, only as
               specified in 30 TEX. ADMIN. CODE Section 335.349.

        K.     In the event TCEQ determines that alternate or additional remedial actions are
               necessary because of the Remedy's failure, TCEQ may terminate this AO.

VTII.   Project Manager/Site Coordinator

        A.     Not later than the Effective Date, the ED will designate a Project Manager to oversee
               implementation of the Work and to coordinate communication between the ED and
               the Agreeing Respondents or, ifthere are no Agreeing Respondents to this AO, the
               Performing Parties.

        B.     Respondents shall direct all communications regarding the Remedial Activities,
               whether written or oral, at a minimum, to the Project Manager or, ifnot available, the
               alternate Project Manager.

        C.    In addition to fulfilling the requirements of Section V (Order) Paragraph I, within ten
              (10) Days after the Effective Date, the Agreeing Respondents or, if there are no
              Agreeing Respondents to this AO, the Performing Parties shall submit a written
              notice to the Project Manager containing the Site Coordinator's address, phone
              number and/or pager number at which he/she may be contacted at any time in case
              of emergency. The Site Coordinator shall notify the ED in writing at least seven (7)
              Days prior to the start date of any field activities associated with the Remedial
              Activities. All Performing Parties must coordinate with and cooperate with any
              Agreeing Respondents in the performance of any and all of the Work.

        D.    The Project Manager has the authority to require that the Remedial Activities are
              performed in accordance with all applicable statutes and regulations and with this AO
              and to require a cessation of the performance of any part or all of the Remedial
              Activities that:

                                 Page 44 • Yoda Petroleum, Inc., State Superfund Site

                                                                                                        72
     1.      In the Project Manager's opinion, may present or contribute to an imminent
             and substantial endangerment to public health, welfare, or the environment
             because of an actual or threatened release of solid wastes or hazardous
             substances from the Site; or

     2.      In the Project Manager's opinion, is not in conformance with any work plan
             developed in accord~ce with this AO; or

     3.      In the Project Manager's opinion, is a violation of any work plan developed
             in accordance with this AO, HASP, or RA Quality Assurance Project Plan.

E.   Within 24 hours after the Project Manager issues an oral order to halt any or all of the
     Remedial Activities, if time permits, the Project Manager will provide a brief
     explanation of the basis for the order. As soon as possible, but in any event no more
     than fourteen (14) Days after the initial order to halt any or all of the Remedial
     Activities, the Project Manager will provide a written explanation of the basis for the
     order to halt any or all of the Remedial Activities to the Site Coordinator. The
     Remedial Activities may be resumed only after the basis for the order to halt any or
     all of the Remedial Activities has been corrected and instructions to proceed have
     been provided to the Agreeing Respondents or, if there are no Agreeing Respondents
     to this AO, the Performing Parties by the Project Manager. All additional costs
     associated with the cessation of any or all of the Remedial Activities will be borne
     by Respondents.

F.   During the RD and RA, the Project Manager and Site Coordinator shall hold
     meetings at least once per month to review the progress and details of the Remedial
     Activities and to review and resolve any discrepancies in data. At the ED's
     discretion, these meetings may be held by telephone. At least seven (7) Days prior
     to each meeting, the Performing Parties shall deliver an agenda for the meeting and
     any documents to be discussed to the Project Manager.

G.   The ED and the Agreeing Respondents or, ifthere are no Agreeing Respondents to
     this AO, the Performing Parties may change their respective Project Manager,
     Alternate Project Manager, or Site Coordinator by written notice to each other of the
     name, address, and telephone number of the new Project Manager, Alternate Project
     Manager, or Site Coordinator seven (7) Days prior to the change, or if seven (7) Days
     notice is not feasible, as soon as possible.

H.   The Project Manager may assign other persons, including other TCEQ employees or
     contractors, to serve as a Site Representative and may temporarily delegate her or his
     responsibilities to such Site Representative. The Project Manager will notify the Site
     Coordinator orally or in writing of such delegation.

                       Page 45 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                73
IX.   Endangerment and Immediate Threat

      A.     In the event of any action or occurrence during the performance of the Remedial
             Activities which causes or threatens a release of a solid waste or hazardous substance
             or which may present an immediate threat to public health or welfare or the
             environment, Respondents shall immediately take all appropriate action to prevent,
             abate, or minimize such release or threat and shall immediately notify the Project
             Manager and Site Representative or, if the Project Manager cannot be contacted, the
             alternate Project Manager and Site Representative. Respondents shall also notify the
             TCEQ Emergency Response Unit, 1-800-832-8224, Region 5, Tyler. Respondents
             shall take such action in accordance with all applicable provisions of the HASP. If
             Respondents fail to take appropriate response action as required by this Section and
             the ED takes such action instead, Respondents shall reimburse the ED all costs of the
             response action. Respondents shall make payments of such costs as specified in
             Section V (Order) Paragraph C and not later than forty-five (45) Days after the ED
             transmits a Demand Letter stating the amount owed.

      B.     Nothing in the preceding paragraph will be deemed to limit any authority of the State
             of Texas to take, direct, or order all appropriate action to protect human health and
             the environment or to prevent, abate, or minimize an actual or threatened release of
             solid wastes or hazardous substances to the environment on, at, or from the Site.

X.    Submittals Requiring the ED's Approval

      A.     Upon the ED' s approval of a submittal, Respondents shall proceed to implement all
             actions required by the submittal according to the schedule approved by the ED.

      B.    Approved submittals may be modified upon agreement by the ED and the Performing
            Parties. The Performing Parties shall submit proposed modifications and obtain
            approval in accordance with the process for submittals specified in this AO generally.
            Upon approval of any modification, the modification is incorporated into the original
            submittal for all purposes.

      C.    The ED's approval of submittals or modifications is administrative in nature and
            allows the Agreeing Respondents or, if there are no Agreeing Respondents to this
            AO, the Performing Parties to proceed to the next steps in the Remedial Activities.
            The ED's approval does not imply any warranty of performance, does not imply that
            the Remedy, when constructed, will meet the Remediation Goals, nor does it imply
            that the Remedy will function properly and ultimately be accepted by.the ED.

XI.   Submittal of Documents, Sampling, and Analyses

      A.    Respondents shall provide to the ED all data, information, documents, or records
            related to the Site which are generated or obtained by any Respondent within twenty

                               Page 46. Yoda Petroleum, Inc., State Superfund Site

                                                                                                      74
               (20) Days of any written request from the ED for such data, information, document,
               or record. Respondents shall provide written notice to the ED immediately upon
               generating or obtaining 2.ny such data, information, document or record.

       B.     Subject to the confidentiality provisions set forth in Paragraph C below, all data,
              information, documents, and records developed pursuant to this AO or submitted by
              Respondents to the ED pursuant to this AO will be available to the public.

       C.     Respondents may assert a claim of business confidentiality pursuant to the Texas
              Public Information Act as to any process, method, technique, or any description
              thereof that the Respondents claim constitutes proprietary or trade secret information
              developed by Respondents or developed by their contractors or subcontractors. Ifno
              confidentiality claim accompanies the process, method, technique, or description
              thereof when submitted to the ED, any such process, method, technique, or
              description thereof may be made available to the public by the ED or the State of
              Texas without further notice to Respondents. Respondents shall make business
              confidentiality determinations in good faith.

       D.     The ED or his Site Representatives may take splits or duplicates of any samples
              obtained by any Respondent at the Site at any time including during the
              implementation of the Remedial Activities. The Respondents shall provide
              assistance necessary for the ED to take split or duplicate samples.

       E.     Respondents shall provide the ED with a schedule ofroutine.sampling and notify the
              ED at least seven (7) Days before any non-routine sampling is conducted at the Site,
              except in the event of situations provided for by Section IX (Endangerment and
              Immediate Threat). Respondents shall collect and analyze all Samples in accordance
              with approved work plans developed pursuant to this AO and shall handle all
              Samples in accordance with the approved RA Quality Assurance Project Plan.

       F.     Respondents shall submit all data, information, reports, schedules, and other
              documents required by this AO in hard copy format (two hard copies of draft
              submittals and three of final submittals) and in specific computer software format
              (one electronic copy of each draft and final submittal) as determined by the Project
              Manager.

XII.   Notices and Submittals

       Respondents shall make all notices and submittals required by this AO in writing and in
       accordance with the contact information contained in this Section unless otherwise expressly
       authorized. Receipt by the Site Coordinator of any notice or communication from the ED
       relating to this AO will be deemed by the ED to be receipt by all Respondents. All
       information required to be submitted pursuant to this AO, including data, documents,
       records, reports, approvals, and other correspondence, will be submitted to the following

                                Page 47 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                       75
        Parties at the addressees listed below or to such other addressees as such Party hereafter may
        designate in a written communication to all other Parties:

        As to the Texas Commission on Environmental Quality:

               For mail:

                       Texas Commission on Environmental Quality
                       Remediation Division
                       Mail Code 136
                       P.O. Box 13087
                       Austin, TX 78711-3087
                       Attention: Project ManagerN oda Petroleum, Inc. State Superfund Site

               For overnight express mail or delivery service:

                       Project Manager
                       Mail Code 136
                       Voda Petroleum, Inc. State Superfund Site
                       TCEQ, Remediation Division
                       Building D, Floor 1, Room 277N
                       12100 Park 35 Circle
                       Austin, TX 78753

               By facsimile:

                       Project Manager
                       Voda Petroleum, Inc. State Superfund Site
                       Superfund Cleanup Section
                       (512) 239-2450

XIIl.   Periodic Review

        A.     Respondents shall provide written progress reports on the Remedial Activities to the
               ED, as specified below in Paragraphs B and C.

        B.     RD/RA Progress Reports

               1.      Respondents shall submit written monthly progress reports to the ED
                       beginning on the tenth Day of the month following the Effective Date. These
                       progress reports will describe the actions taken pursuant to this AO during the
                       previous month, including a general description of activities and progress
                       during the reporting period, activities projected to be commenced or
                       completed during the next reporting period, and any problems encountered

                                 Page 48 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                         76
            or anticipated by Performing Parties in commencing or completing the
            Remedial Activities. Progress reports will include all data received during
            the reporting period and an up-to-date progress schedule. Progress reports
            will identify any violations of this AO and calculate any applicable stipulated
            penalty required under Section XXI (Stipulated Penalties). The requirement
            to submit these monthly progress reports will be terminated at the earlier of:
            1) if no PCA Plan is required, when the AO is terminated in accordance with
            Section XXXIII (Termination of the Administrative Order) or 2) if a PCA
            Plan is required, upon the ED' s approval of a Final PCA Plan in accordance
            with Section VI (Remedial Activities) Paragraph D.

     2.     If an RD/RA progress report submitted by Performing Parties is deficient, the
            ED will provide written notice to the Site Coordinator. The notice will
            include comments and a description of the deficiencies.

     3.     Within ten (10) Days of the ED providing the Site Coordinator with a notice
            of deficiency of an RD/RA progress report, Performing Parties shall make
            such changes as the ED deems necessary and resubmit the progress report to
            the ED.

C.   Post Construction Progress Reports

     1.    Performing Parties shall submit written monthly post construction progress
           reports to the ED beginning on the tenth Day of the month following the
           initiation of the PCA as described in Section VI (Remedial Activities)
           Paragraph D.l. These progress reports will describe the actions taken
           pursuant to this AO, including a general description of activities and progress
           during the reporting period, activities projected to be commenced or
           completed during the next reporting period, and any problems encountered
           or anticipated by Performing Parties in commencing or completing the
           Remedial Activities. Post construction progress reports will include all data
           received during the reporti:1;1g period and an up-to-date progress schedule.
           Post construction progress reports will identify any violations of this AO and
           calculate any applicable stipulated penalty required under Section XXI
           (Stipulated Penalties). The requirement to submit monthly post construction
           progress reports will be terminated when the conditions specified in Section
           XIV (Termination of Post Construction Activities) have been met as
           determined by the ED in his sole discretion.

     2.    If a monthly post construction progress report submitted by Performing
           Parties is deficient, the ED will provide written notice to the Site
           Coordinator. This notice will include comments and a description of the
           deficiencies.

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                                                                                              77
              3.      Not later than ten (10) Days after the ED provides the Site Coordinator with
                      a notice of deficiency of a post construction progress report, Performing
                      Parties shall make such changes as the ED deems necessary and resubmit the
                      post construction progress report to the ED.

XIV.   Termination of Post Construction Activities

       The ED will terminate the requirement to perform PCA if Respondents demonstrate that all
       Remediation Goals have been met. The Respondents shall satisfactorily perform PCA for
       the duration of time specified in the RSD, and the Remediation Goals will not be deemed
       achieved before the time specified in the RSD.

XV.    Records

       A.     Each Respondent shall preserve and retain, and shall instruct its accountants,
              attorneys, employees, agents, contractors, and subcontractors and anyone else acting
              on its behalf at the Site to preserve and retain, in the form of originals or copies, all
              data, records, documents, and information of whatever kind, nature, or description
              that relate in any way to the Site that are now or that come to be in its possession or
              control. The previous sentence is meant to include data, records,· documents, or
              information relating to each Respondent's potential liability or to any other person's
              potential liability for the Site under Section 361.271 of the Act.

       B.    All data, records, documents, and information required to be preserved and retained
             in accordance with Paragraph A above will be preserved and retained for a minimum
             of ten (10) years after the ED' s issuance of the Approval of RA Completion. At the
             end of this ten (10) years, each Respondent shall notify the ED at least ninety (90)
             Days before any such data, records, documents, or information is destroyed. If the
             ED requests, Respondents shall, at no cost to TCEQ, provide the ED originals or
             copies of such data, records, documents, or information which are not protected by
             a privilege as per Paragraph C below.

             Until this AO is terminated in accordance with Section XXXIII (Termination of the
             Administrative Order), Respondents shall maintain an index of documents that
             Respondents claim contain privileged information. The index will contain, for each
             document, the date, author, addressee, and subject of the document. Respondents
             shall submit a copy of the index to the ED within ten (10) Days after the ED submits
             a written request.

       C.    Any Respondent refusing to provide copies of any data, information, records, or
             documents based upon a claim of privilege shall identify the data, information,
             record, or document and explain the basis for the claim. Notwithstanding the
             immediately preceding sentence, any data, record, information, or document required
             to be developed or submitted pursuant to this AO will be available to the public.

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                                                                                                          78
       D.       At any time prior to the completion of the Work, the ED may contact the Site
                Coordinator to determine the location and/or to obtain copies of any or all of the data,
                records, documents, or information developed in accordance with this AO. The
                Respondents shall provide copies of any such data, records, documents, and
                information to the ED at no cost to TCEQ.

       E.       Upon request by the ED, Respondents shall submit to the ED all data, information,
                records, and documents requested, including those relevant to the items specified in
                Section 36 l. l 82(b) of the Act for possible inclusion in the administrative record in
                accordance with 30 TEX. ADMIN. CODE Section 335.345.

XVI.   Access

       A.       As of the Effective Date, any Respondent that owns, in whole or in part, the Site, an
                off-site area that is to be used for access to the Site, property subject to or affected by
                the Remedial Activities, or other property where documents generated in accordance
                with this AO are or come to be located shall provide access to such property to the
                ED; any federal, state or local authorities and their contractors approved by the ED;
                and the Performing Parties and their authorized representatives and contractors.
                Failure to provide such access may result in the imposition of statutory and/or
                stipulated penalties. Respondents shall indemnify TCEQ, and TCEQ will not be
                liable, for any loss or claim arising out of Respondents' activities at the Site, on off-
                site areas to be used for access to the Site, on property subject to or affected by the
                Remedial Activities, and on other property where documents generated in accordance
                with .this AO are or come to be located.

       B.       If a person other than a Respondent owns, in whole or in part, the Site, an off-site
                area that is to be used for access to the Site, property subject to or affected by the
                Remedial Activities, or other property where documents generated in accordance
                with this AO are or come to be located, Respondents shall obtain, or use their best
                efforts to obtain, Site access agreements from the then current owner( s) within ninety
                (90) Days of the Effective Date. Respondents shall secure agreements to provide
                access for the ED, federal, state or local authorities and their contractors as approved
                by the ED, and the Performing Parties and their authorized representatives and
                contractors. Respondents shall insure that such agreements specify that TCEQ is not
                liable for any loss or claim arising out of any activities at the Site, on off-site areas
                to be used for access to the Site, on property subject to or affected by the Remedial
                Activities, or on other property where documents generated in accordance with this
                AO are or come to be located. Respondents shall provide copies of such agreements
                to the ED before the Performing Parties initiate field activities. Respondents' best
                efforts shall include, ifnecessary, providing reasonable compensation to any property
                owner not a Party. If access agreements are not obtained within the ninety (90) Days,
                Respondents shall immediately notify the ED of their failure to obtain access. If the
                ED determines, in his sole discretion, that the Performing Parties have used best

                                   Page 51 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                              79
               efforts to obtain such access, the ED will, pursuant to statutory authority, make
               appropriate efforts to obtain such access upon reasonable terms to the Agreeing
               Respondents or, ifthere are no Agreeing Respondents to this AO, to the Performing
               Parties. Any revision to the deadlines specified in this AO necessitated by
               Respondents' inability to obtain such access may be considered a reasonable ground
               for extending any affected deadline pursuant to Section XVIII (Extension of
               Deadlines).

       C.      Subject to the Agreeing Respondents' reasonable safety and internal security
               requirements, the ED will have the authority to enter, freely move about, and exit the
               Site, any off-site area that is to be used for access to the Site, property subject to or
               affected by the Remedial Activities, or other property where documents generated in
               accordance with this AO are located or come to be located, for the purposes of:
               inspecting conditions at the Site, the Remedial Activities and all information,
               documents, data, records, operating logs, and contracts related to the Site; reviewing
               the Performing Parties' progress in performing the Remedial Activities; conducting
               such tests as the ED deems necessary; using a camera, sound recording device, or
               other documentary type equipment; verifying the data submitted to the ED by the
               Performing Parties; and performing any Remedial Activities not being performed or
               not being satisfactorily performed by the Performing Parties. Nothing herein will be
               interpreted as limiting or affecting the ED's right of entry or inspection authority
               under state or federal law. All persons with access to the Site shall comply with the
               HASP.

XVII. Delay in Performance

       Respondents shall notify the ED of any delay or anticipated delay in achieving compliance
       with any requirement of this AO. Such notification will be made by telephone to the Project
       Manager or, ifnot available, the alternate Project Manager, within forty-eight (48) hours after
       Respondents first knew or should have known that an event might cause a delay. Within
       seven (7) Days after notifying the ED by telephone, Respondents shall provide written
       notification fully describing the cause of the delay, the anticipated duration of the delay, the
       measures taken and to be taken by Respondents, their contractors, or consultants, to prevent
       or minimize the delay, and the timetable by which these measures have been, are being, and
       will be implemented. A revised timetable will be implemented upon its approval by the ED.

XVIII. Extension of Deadlines

      Upon failure to comply with the terms and conditions of this AO, any Defaulting Performing
      Parties shall cease to be Performing Parties and all such rights and privileges as accrue to the
      Performing Parties pursuant to this AO will immediately terminate as to such Defaulting
      Performing Parties. At that time all responsibilities and obligations that attach to RPs in
      addition to those that attach to Performing Parties will attach to Defaulting Performing

                                 Page 52 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                           80
       Parties that are RPs, including the requirement to pay TCEQ costs in accordance with
       Section V (Order) Paragraph C.

       Notwithstanding anything to the contrary in this AO, the Agreeing Respondents or, ifthere
       are no Agreeing Respondents to this AO, the Performing Parties shall bear no costs for any
       fines, penalties, or increases in the ED's oversight of the Remedial Activities resulting from
       Defaulting Performing Parties actions or inactions. Defaulting Performing Parties and the
       RPs may be assessed the ED's full costs for oversight of the Work. If actions required by
       this AO are delayed or are not timely completed because of acts or omissions of one or more
       Defaulting Performing Parties, the Agreeing Respondents, or if there are no Agreeing
       Respondents to this AO, the Performing Parties may request a time extension. Upon such
       request, the ED will approve the time extension, disapprove it, or approve such alternative
       time extension as the ED in his sole discretion deems appropriate. Thereafter, Respondents
       shall adhere to all remaining deadlines in this AO and in any documents developed in
       accordance with this AO and approved by the ED.

       The Agreeing Respondents may seek and the ED may grant an extension of any deadline
       contained in this AO or in any document submitted pursuant to this AO. Agreeing
       Respondents shall submit the request for a deadline extension no later than seven (7) Days
       prior to the deadline date and shall substantiate good cause for extension of the deadline.
       The determination of what constitutes good cause and the length of any deadline extension
       will be at the ED's sole discretion.

XIX.   Reserved

XX.    Compliance with Applicable Laws

       A.     Respondents shall perform all actions pursuant to this AO in accordance with the
              requirements of all applicable or relevant and appropriate federal, state, and local
              laws, including the Texas Solid Waste Disposal Act as codified in the Texas Health
              and Safety Code and the Texas Oil and Hazardous Substance Spill Prevention and
              Control Act as codified in the Texas Water Code. This AO is not, and shall not be
              construed to be, a permit issued pursuant to any federal or state statute or regulation.

       B.     All materials removed from the Site shall be disposed of or treated at a facility which
              is in compliance with all applicable or relevant and appropriate federal, state, and
              local laws and shall be disposed of or treated in accordance with all such
              requirements.

XXI.   Stipulated Penalties

       A.     Subject to the provisions of Sections XXII (Force Majeure) and XXIIl (Resolution
              of Disagreements), noncompliance with this AO shall result in the imposition of
              stipulated penalties as set forth below.

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                                                                                                         81
B.   Penalties Related to Timeliness of Submittals Required by this AO

     For failure to:

     1.      meet the deadlines set forth in Sections V (Order) and VI (Remedial
             Activities);

     2.      submit timely reports as set forth herein;

     3.      submit data in a timely fashion or provide timely notice of sampling as
             required by Section XI (Submittal of Documents, Sampling, and Analyses);
             or

     4.      resubmit a do·cument within the time:frames specified herein;

             Agreeing Respondents shall pay stipulated penalties in the following amounts
             for each Day and part thereof during which any delay listed in Subparagraphs
             B.1 through B.4 above continues:

             Period ofDelay                                                   Amount/Day

             1st through 14th Day                                             $500.00

             15th through 45th Day                                            $2,000.00

             46th Day and beyond                                              $3,000.00

C.   Penalties Related to Competency of Submittals

     This Paragraph applies to submittals of any document required by Sections VI
     (Remedial Activities), VII (Failure to Attain Remediation Goals or Findings of
     Significant Difference), and XIlI (Periodic Review) which fail to be responsive and
     acceptable. Agreeing Respondents shall pay a stipulated penalty of $5,000 for each
     week and part thereof that an acceptable and responsive document is not submitted.
     This penalty may be assessed in addition to any penalties assessed under Paragraph
     B of this Section.

D.   Penalties Related to Project Milestones

     For failure to:

     1.      achieve any RA Project Milestones in accordance with the schedule approved
             under Section VI (Remedial Activities) Paragraph B; or

                       Page 54 - Yoda Petroleum, Inc., State Superfund Site

                                                                                            82
      2.     achieve any PCA Project Milestones in accordance with the schedule
             approved under Section VI (Remedial Activities) Paragraph B.

     Agreeing Respondents shall pay stipulated penalties in the following amounts for
     each Day and part thereof during which any delay listed in Subparagraphs D.1
     through D.2 above continues:

             Period ofDelay                                                   Amount/Day

             1st through 14th Day                                             $1,000.00

             15th through 45th Day                                            $3,000.00

             46th Day and beyond                                              $10,000.00

E.   For disobeying an order to halt any or all of the Remedial Activities under Section
     VIII (Project Manager/Site Coordinator), Agreeing Respondents shall pay stipulated
     penalties of $10,000 per Day.

F.   For failure to use best efforts to obtain Site access in accordance with Section XVI
     (Access), Agreeing Respondents shall pay a stipulated penalty of $1,000 per Day.

G.   For denying access provided for in Section XVI (Access), Agreeing Respondents
     shall pay stipulated penalties of $10,000 per Day.

H.   Any Agreeing Respondent who fails to provide records within ten (10) Days after
     receipt of a written request from the ED or within such other period as specified
     herein shall pay a stipulated penalty of $10,000 per Day.

I.   With the exception of the stipulated penalties referenced in Paragraphs E, G and H
     above which attach to individual Agreeing Respondents, all stipulated penalties
     assessed in accordance with this Section are joint and several, not individual,
     obligations.

J.   Agreeing Respondents shall pay stipulated penalties assessed under this Section as
     specified in ParagraphK below within sixty (60) Days after ED transmits a demand
     letter stating that stipulated penalties have accrued or after resolution of a
     disagreement as specified in Section XXIII (Resolution of Disagreements),
     whichever comes later. Stipulated penalties will accrue from the date of
     noncompliance until the noncompliance is corrected, provided however, that if any
     Respondent prevails in resolution of disagreements as specified in Section XX.III
     (Resolution of Disagreements), it shall have no liability to pay stipulated penalties
     with regard to those matters submitted for resolution of disagreements in accordance
     with Section XXIII (Resolution of Disagreements) in which it prevails.

                       Page 55 - Yoda Petroleum, Inc., State Superfund Site

                                                                                             83
      K.     Agreeing Respondents shall pay stipulated penalties to "General Revenue Fund of
             the State of Texas" and shall mail payments to:

             Chief Fiscal Officer (MC 180)
             Texas Commission on Environmental Quality
             "Re: Voda Petroleum, Inc. State Superfund Site Administrative Order, Docket
             Number 2009-1706-SPF"
             P.O. Box 13088
             Austin, Texas 78711-3088

      L.     The requirement to pay stipulated penalties that have been incurred prior to the
             termination of this AO in accordance with Section XXXIIl (Termination of the
             Administrative Order) will survive termination of this AO.

      M.    A single act or omission may be the basis for more than one type of stipulated
            penalty. A single act or omission may also be subject to more than one (1) Day of
            stipulated penalties. In cases where more than one stipulated penalty applies to a
            single act or omission, the ED may choose which stipulated penalties to assess.

      N.    The ED has the sole discretion to reduce or waive stipulated penalties and to do so
            as to specific Agreeing Respondents or groups of Agreeing Respondents.

      0.    Stipulated penalties against Agreeing Respondents will be in lieu of administrative
            and civil penalties for the same violation but will not prevent TCEQ from seeking
            enforcement of the ordering provisions by injunctive relief. Respondents that are not
            Agreeing Respondents are subject to administrative and civil penalties.

XXII. Force Majeure

      A.    If a delay in performance is caused (in whole or in part) by events beyond the
            reasonable control of the Agreeing Respondents, that failure will not be construed as
            a violation of this AO. The burden of establishing that an event is beyond their
            reasonable control lies with the Agreeing Respondents. The Agreeing Respondents
            shall notify the ED in writing within seven (7) Days of the start oftheForceMajeure
            event and within seven (7) Days of the end of the Force Majeure event. Agreeing
            Respondents shall submit the notification as specified in this Section. Failure to so
            notify the ED will constitute a waiver of the claim of Force Majeure.

            Such notice will describe in detail the cause of the delay; the anticipated duration of
            the delay; the measures taken and to be taken by the Agreeing Respondents, their
            contractors or consultants, to prevent or minimize the delay; and the timetable by
            which these measures have been, are being, and will be implemented. Measures to
            prevent or minimize the delay will be implemented upon the ED's written approval
            of the timetable. The Agreeing Respondents shall also submit, forthe ED's approval,

                              Page 56 - Voda Petroleum, Inc., State Superfund Site

                                                                                                      84
               a proposed schedule for subsequent Remedial Activities whose deadlines have been
               affected by the Force Majeure event. Neither the ED's approval of the timetable of
               measures to be taken to prevent or minimize delays or of the revised schedule of
               Remedial Activities will be construed as excusing the delay or as a waiver of
               TCEQ's rights to enforce this AO.

        B.     Force Majeure events will not include increased costs or expenses of any part or all
               of the Work or the financial inability of any Agreeing Re.spondent to perform any part
               or all of the Work.

        C.     Ifthe ED and the Agreeing Respondents cannot agree that the cause for the delay was
               a Force Majeure event or cannot agree upon the schedule for subsequent Remedial
               Activities, then the disagreement will be resolved according to Section XX:ill
               (Resolution of Disagreements). The Agreeing Respond~mts shall have the burden of
               demonstrating that Force Majeure is warranted.

:xxm.   Resolution of Disagreements

        A.    The Agreeing Respondents and the ED shall attempt to resolve on an informal basis
              any issues arising under Sections V (Order) through XXXIlI (Termination of the
              Administrative Order) on which there is disagreement. The Agreeing Respondents
              shall commence informal negotiations by notifying the Project Manager in writing
              that there is a disagreement and that this Section is being invoked. Except as
              provided below in Paragraph D, informal negotiations will not extend beyond thirty
              (30) Days from the date the Project Manager receives such notification, unless the
              Agreeing Respondents and the ED agree otherwise in writing.

        B.    The Agreeing Respondents shall notify the Project Manager within thirty (30) Days
              after the Day the Agreeing Respondents knew or should have known of the events
              giving rise to the disagreement. Should the Agreeing Respondents fail to give such
              notice, the ED's decision on any disagreement will be binding.

        C.    Notification of the Project Manager in accordance with Paragraph A above will not
              by itself postpone the deadlines established in accordance with this AO or stay the
              accrual of any applicable stipulated penalties for the matter at issue. However, the
              obligation to pay any applicable stipulated penalties to the TCEQ will be stayed
              pending resolution of the disagreement in accordance with thiS Section.

        D.    If the ED makes a determination to perform a portion or all of the Remedial
              Activities, the Agreeing Respondents shall have five (5) Days after notification to the
              Site Coordinator to commence informal negotiations by notifying the Project
              Manager in accordance with Paragraph A above. Informal negotiations will not
              extend beyond fifteen (15) Days from the date the ED receives notification, unless
              the Agreeing Respondents and the ED agree otherwise in writing.

                                 Page 57 - Yoda Petroleum, Inc., Stale Superfund Sile

                                                                                                        85
       E.     The procedure for any resolution of disagreements subsequent to informal
              negotiations will be found in Sections 361.321 and/or 361.322 of the Act.

       F.     Unless otherwise specifically set forth herein, the fact that resolution of
              disagreements is not specifically set forth in individual Sections is not intended to
              and will not bar the Agreeing Respondents from invoking this Section as to any
              disagreement arising under Sections V (Order) through XXXIII (Termination of the
              Administrative Order), including any disagreement concerning the ED's exercise of
              discretion under the terms of this AO.

XXIV. Indemnification

       Respondents agree to indemnify and hold harmless TCEQ and its officers, employees,
       agents, principals and assigns from and against all fines, penalties, claims, damages, losses,
       demands, judgments, settlements, costs of suit, and attorneys fees that arise out of or result
       from:

              1.      Respondents' performance of an inherently dangerous activity or handling of
                      a solid waste or hazardous substance at or from the Site;

              2.      Respondents' negligent, reckless, or intentional acts or omissions or such acts
                      or omissions of any of its agents or employees; and

              3.      the negligent, reckless, or intentional acts or omissions of any of
                      Respondents' contractors or suppliers or their agents or employees.

XXV. Liability

      The State of Texas, by issuing this AO, assumes no liability for any injuries or damages to
      persons or property resulting from acts or omissions of Respondents, or their directors,
      officers, employees, agents, representatives, successors, assigns, contractors, or consultants
      in carrying out any of the Work. Neither TCEQ nor the State of Texas will be deemed a
      party to any contract entered into by any Respondent or its directors, officers, employees,
      agents, successors, assigns, contractors, or consultants to perform any or all of the Work or
      any other activity at the Site.

XXVI. Severability

      The provisions of this AO are intended to be severable and are deemed severable. Should
      any provision of this AO be rendered unenforceable by a court of competent jurisdiction or
      other appropriate authority the remaining provisions will remain valid and enforceable.

                                Page 58 - Yoda Petroleum, Inc., State Superfund Site

                                                                                                        86
XXVII. TCEQ's General Reservation of Rights and Retention of Claims

       Except as specified herein, nothing in this AO will constitute or be construed as a covenant
       not to sue by TCEQ or the State of Texas or a release from any claim, cause of action, or
       demand in law or equity against any person, firm, partnership, or corporation. Except as
       specified herein, the ED reserves and this AO is without prejudice to all rights against
       Respondents with respect to all matters including:

              1.      Claims based on Respondents' failure to fulfill the requirements of this AO;

              2.      Liability arising from the past, present, or future disposal, release, or threat
                      of release of solid wastes or hazardous substances outside of or not related to
                      the Site;

              3.      Liability for future disposal of solid wastes or hazardous substances at the
                      Site, other than as provided in the RSD or in any work plan required to be
                      developed in accordance with this AO;

              4.      Liability for violations of federal or state law which occur during or after
                      implementation of the Remedial Activities;

              5.      Claims based on criminal liability; and

              6.      Claims for natural resource damages as defined by CERCLA (42 U.S.C.
                      Sections 9601 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. Sections
                      2701 et seq.), the Oil Spill Prevention and Response Act (Texas Natural
                      Resources Code Chapter 40), and the Federal Water Pollution Control Act
                      (33 U.S.C. Sections 1251 et seq.).

XXVIII. Section Headings

      Section headings are included for convenience of reference only and will be disregarded in
      the construction and, interpretation of any of the provisions of this AO.

XXIX. Continuing Authority

      TCEQ specifically retains authority over Respondents for the duration of this AO for the
      purposes of issuing such further orders or directions as may be necessary or appropriate to
      construe, implement, modify, enforce, terminate, or reinstate the terms of this AO or for any
      further relief as the interest of the State of Texas may require.

XXX. Enforcement

                                Page 59 - Voda Petroleum, Inc., State Superfund Site

                                                                                                         87
       Except as provided in Section XXI (Stipulated Penalties) Paragraph 0, nothing herein will
       preclude TCEQ from taking any additional enforcement actions against Respondents at any
       time including issuing such additional orders as TCEQ may deem necessary or from
       requiring Respondents to perform additional activities in the future and to completely
       perform all of the Work.

       This AO in no way obligates the State of Texas to assist Respondents in defending
       contribution actions brought by other persons or entities.

XXXI. Computation of Time

       A.     Deadlines falling on a weekend or a State of Texas holiday will be extended until the
              next business day.

       B.     The terms "submit" and "provide" as used herein will refer to the date on which
              information, data, a document, or a record is to be received by the appropriate Party.
              Submittals received on the deadline date will be deemed timely.

XXXII. Opportunity to Conference

       A.     The Agreeing Respondents or, ifthere are no Agreeing Respondents to this AO, the
              Performing Parties may, within twenty (20) Days after the Effective Date, request a
              conference with the Project Manager. The request must be submitted in writing to
              the Project Manager. Any such conference will occur at the TCEQ's main campus
              in Austin.

       B.     The purpose and scope of the conference will be limited to issues involving the
              implementation of the Remedial Activities. The conference is not an evidenti.ary
              hearing, does not constitute a proceeding to challenge this AO, and does not give
              Agreeing Respondents or, if there are no Agreeing Respondents to this AO, the
              Performing Parties the right to seek review of this AO.

XXX:ill. Termination of the Administrative Order

       A.     The ED may terminate this AO when he determines that alternative or additional
              work is required at the Site because the Remediation Goals will not be attained by
              implementation of the Remedial Activities, unless Agreeing Respondents and the
              ED agree on such alternative or additional work, agree to modify the Remedial
              Action to include such additional or alternative work in accordance with Section V
              (Order) Paragraph J, and agree to modify this AO in accordance with Section V
              (Order) Paragraph J.

       B.     Except as provided in this Section, when the ED determines that the Work has been
              completed in accordance with this AO, the ED will provide written notice to

                                Page 60 - Voda Petroleum, Inc., State Superfund Site

                                                                                                       88
             Agreeing Respondents that Agreeing Respondents have fully satisfied the
             requirements of this AO. Such notice will be issued within one hundred and eighty
             ( 180) Days after the ED determines that the Work has be•en completed in accordance
             with this AO. This notice will not, however, terminate Respondents' obligations to
             comply with those provisions specified herein that are intended to survive this AO,
             including requirements regarding record preservation and Sections XV (Records),
             XXI (Stipulated Penalties), XXV (Liability), XXIX (Continuing Authority), and
             XXX (Enforcement).

XX.XIV. Rules of Construction

      The masculine, feminine, and neuter gender will each include tbe other and the singular and
      plural number will each include the other.

      This AO may be executed in two or more counterparts each of which will be deemed an
      original but all of which together will constitute one and the same document.

XXXV. Sovereign Immunity

      The Parties hereby agree that nothing in this AO waives the State of Texas' sovereign
      immunity relating to suit, liability, and the payment of damages. The Parties farther agree
      that all claims, suits, or obligations arising under or relating to this AO are subject to and
      limited to the availability of funds appropriated by the Texas Legislature for that respective
      claim, suit or obligation.

                                Page 6 I - Yoda Petroleum, Inc., State Superfund Site

                                                                                                       89
The Chief Clerk shall send a copy of this Administrative Order to all Parties.

Issue date:   FEB 1 2 2010
                              TEXAS COMMISSION ON
                              ENVIRONMENTAL QUALITY

                              For the Commission

                                Page 62 - Yoda Petroleum, Inc., State Superfund Site

                                                                                       90
V ODA PETROLEUM, INC.
 STATE SUPERFUND SITE
ADMINISTRATIVE ORDER

       EXHIBIT A

REMEDY SELECTION DOCUMENT

                            91
REMEDY SELECTION DOCUMENT

                   TCEQ
      YODA PETROLEUM, INC.
      STATE SUPERFUND SITE
 CLARKSVILLE CITY, GREGG COUNTY,
             TEXAS

              SEPTEMBER 2009

 PREPARED BY: CAROL BOUCHER, P.G., PROJECT MANAGER
    TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
               REMEDIATION DIVISION

                                                     92
                                                TABLE OF CONTENTS

I.      INTRODUCTION ............................................................................................................. 1
II.     PURPOSE .......................................................................................................................... 1
III.    LEGAL AUTH01RJTY ..................................................................................................... 1
IV.     SITE HISTORY ................................................................................................................ 2
V.      SUMMARY OF :REPORTS ............................................................................................. 3
VI.     ACTION LEVEI.S ............................................................................................................ 4
VII.    THE SELECTEI> REMEDIAL ACTION ...................................................................... 5
VIII.   GLOSSARY ........................................................................................................................ 6

                                                                   11
                                                                                                                                               93
                  VODA PETROLEUM, INC. STATE SUPERFUND SITE
                   CLARKSVILLE CITY, GREGG COUNTY, TEXAS
                        REMEDY SELECTION DOCUMENT

I.     INTRODUCTION

Voda Petroleum, Inc., (aka Ultra Oil) (Voda Site) occupies 6.12 acres at 211 Duncan Road,
approximately 1.25 miles west of the intersection of FM 2275 (George Richey Road) and FM
3272 (North White Oak Road), 2.6 miles north-northeast of Clarksville City in Gregg County.
The Voda Site was operated as a waste oil recycling facility from about 1981 until it was
abandoned in November 1991.      ·

The Texas Commission on Environmental Quality (TCEQ) is an agency in the State of Texas
that implements many of the state laws relating to the conservation of natural resources and the
protection of public health and safety and the environment. The TCEQ addresses certain sites
that may constitute an imminent and substantial endangerment to public health and safety or the
environment through the state Superfund program.

II.    PURPOSE

This Remedy Selection Document (RSD) presents the Remedial Action (also known as "the
remedy") for the Voda Site, which is designed to address the contamination and provide
protection of public health and safety and the environment.

Words appearing in italics in this document are defined in Section VIII, "Glossary," of this RSD.

III.   LEGAL AUTHORITY

The investigation of the nature and extent of contamination at the Voda Site and the selection of
the Remedial Action is in accordance with the Solid Waste Disposal Act, Tex. Health & Safety
Code §§ 361.001-966 (West 2008); Subchapter K: Hazardous Substance Facilities Assessment
and Remediation (Subchapter K) rules found in 30 Tex. Admin. Code (TAC) §§ 335.341-351
(2009); and the Texas Risk Reduction Program (TRRP) rules found in 30 TAC §§ 350.1-135
(2009).

While the Subchapter K rules are specific to the Superfund process, the TRRP rules are a
comprehensive program for addressing environmental contamination and apply to many different
types of corrective action administered by the TCEQ. The TRRP mles establish procedures for
determining the concentration of contaminants to which a person or other environmental receptor
can be exposed without unacceptable risk of harm. These acceptable concentration levels are
called Protective Concentration Levels (PCLs ).

A three-tiered approach may be used under the TRRP mies to calculate the PCLs for a site. The
tiers represent increasing levels of evaluation where site-specific infmmation is factored into the
process. For example, Tier 1 uses conservative, generic models that do not account for site-
specific factors, Tier 2 allows for the use of site-specific information but must use PCL equations

                                                1
                                                                                                      94
provided by the TCEQ, and Tier 3 allows for more detailed and complex evaluations so that
PCLs are appropriate for specific site conditions. The PCLs for the Voda Site were developed
under Tier 1.

Critical to the analysis under all three of the tiers is the land use classification for the site. Under
the TRRP rules, the land can be classified as either residential or commercial/industrial.
Remediation to residential standards assumes that the site may be occupied by children and
therefore is applicable not only to strictly residential land but also to playgrounds, schools,
daycare centers and similar land uses. Remediation to commercial/industrial standards assumes
that the site will not be regularly occupied by children and is protective of persons who may
occupy the site as workers. Sites remediated to commercial/industrial standards cannot be used
for residential-type activities unless further controls are implemented to make the site safe for
that use. The TCEQ determined that a commercial/industrial use was appropriate for the Voda
Site.

The TRRP rules allow risks posed by the presence of contamination above a PCL to be managed
by any combination of the following: 1) removal or decontamination of contaminated media; 2)
physical controls, such as landfills and caps, which limit exposure to the contaminated media; or
3) institutional controls, such as deed restrictions on the future use of the property, which are
also intended to limit exposure to the contaminated media. These remedies under the TRRP
rules are divided into two main categories: Remedy Standard A and Remedy Standard B. To
meet Remedy Standard A requirements, the contaminated media must be removed and/or
decontaminated such that physical controls and, in most cases, institutional controls are not
necessary to protect human and ecological receptors from unprotective levels of contamination
based on the designated land use. To meet the requirements of Remedy Standard B, however,
physical controls and institutional controls may be relied on to limit exposure to unprotective
levels of contamination. These standards are described in detail in 30 TAC § 350.32 and §
350.33. The proposed remedy at the Voda Site meets the criteria established for Remedy
Standard A..

IV.    SITE HISTORY

The Voda Site was operated as a waste oil recycling facility from about 1981 until it was
abandoned in November 1991. The Voda Site is located in a rural residential neighborhood with
occupied residences directly on the east and west sides of the facility. A review of the facility
waste management activity records revealed that Voda Petroleum, Inc., had received, stored and
processed waste gas.olines; oily wastes; used oil mixed with methyl ethyl ketone, varsol,
trichloroethane, toluene, and hexane; crude oil; greases; and waxes. In 1996, the EPA conducted
an emergency removal of 462 fifty-five-gallon drums of grease or oily wastes, 14 fifty-five-
gallon drums of corrosive wastes, 16 above-ground tanks, and associated contaminated soil. The
site was then backfilled to approximate the undisturbed topography to facilitate site drainage.
The EPA response action removed the immediate threat to human health and the environment
but was not intended to be and did not constitute a final remediation solution. Post removal
analysis of soil and groundwater samples indicated that soil and groundwater continued to be
contaminated above appropriate cleanup levels.

                                                  2
                                                                                                           95
V.   SUMMARY OF REPORTS

     A.     HAZARD RANKING SYSTEM REPORT

     The Hazard Ranking System (HRS) is a numerically-based screening system that uses
     information from initial, limited investigations to assess whether a site qualifies for the
     state or federal Superfund program. Sites scoring 28.5 or greater may qualify for the
     federal Superfund program, while sites scoring 5 or greater may qualify for the state
     Superfund program. The HRS scoring for the Voda Site was prepared by the TCEQ in
     August 1995 and is presented in the report titled "Hazard Ranking System (HRS)
     Documentation Record, Yoda Petroleum Site, Gregg County, Texas." The Voda Site
     earned a score of 23.63. The TCEQ proposed to list the Yoda Site on the State Registry
     of Superfund Sites and published notice of its intent in the Texas Register on November
     17, 2000. 25 Tex. Reg. 11594-95 (Nov. 17, 2000).

     B.     REMEDIAL INVESTIGATION REPORT

     The Remedial Investigation (RI) includes field work, laboratory analysis and
     interpretation of collected data for the purpose of detennining the nature and extent of
     contamination associated with the Vada Site. The Phase I RI Rep01i, dated August 2002,
     included a summary of the RI activities conducted at the site in May 2002. Based on the
     Phase I results, a second phase was conducted in April 2004, focusing on the area known
     as the "East Tank Farm." The Phase II RI Technical Memorandum (TM), dated July
     2004, concluded that the investigation of the extent of soil contamination above cleanup
     standards was complete; however, additional groundwater monitor wells were needed to
     complete the groundwater investigation. Additional groundwater monitor wells were
     installed from April 2005 through May 2007. The final round of monitor well
     installations was found to fully define the extent of the groundwater contamination.

     The following summarizes the findings of the RI:

     Groundwater - The Queen City Aquifer beneath the Voda Site is impacted by various
     volatile organic constituents (VOCs) exceeding the PCLs applicable to a Class 1
     groundwater resource.

     Onsite Soil - Soil containing contaminants above cleanup standards at the Voda Site is
     generally limited to the East Tank Farm area, encompassing an area of approximately 60
     feet by 120 feet and 12 feet deep. Contaminants exceeding cleanup standards include
     VOCs and Total Petroleum Hydrocarbons (TPH).

     Offsite Soil/Sediment - No offsite soil or sediment contamination was detected.

     Ecological Risks - The Tier 1 Exclusion Criteria Checklist determined that conditions at
     the Voda Site precluded the need for a formal ecological risk assessment (ERA) because

                                             3
                                                                                                   96
       the site meets the conditions for "de minimis land area," meaning there are insignificant
       ecological exposure pathways at the site.

       C.      FEASIBILITY STUDY PHASE REPORT

       The Feasibility Study (FS) for the Yoda Site, dated January 2008, presented an evaluation
       of the potential remedial alternatives to address the chemicals of concern (COCs) in
       onsite soil and onsite and offsite groundwater found exceeding the applicable PCLs.

       D.      REMEDY SELECTION PHASE REPORTS AND MEETING

       The Proposed Remedial Action Document (PRAD), dated June 2008, presented a brief
       discussion of remedial actions evaluated and the specific remedy proposed by the TCEQ
       to address the contaminants exceeding the PCLs at the Yoda Site.

       On October 23, 2008, a public meeting was held at the Broadway Elementary School
       Cafeteria in Gladewater, Texas, for the purpose of presenting the PRAD and soliciting
       public comment about the proposed remedy. Upon consideration of the comments
       received during the public comment period, the TCEQ selected the remedy described in
       this RSD.

       E.     PLUME MANAGEMENT ZONE (PMZ) DEMONSTRATION TECHNICAL
              MEMORANDUM (TM)

       In May 2009, TCEQ technical staff reevaluated information that could be read to support
       the finding of two possible classifications for the groundwater at the Yoda Site. As a
       result, pursuant to 30 TAC § 350.33(f)(4), the TCEQ conducted a PMZ demonstration in
       accordance with TCEQ publication RG-366/TRRP-29, Soil and Groundwater Response
       Objectives in July 2009. The PMZ demonstration, detailed in the PMZ Demonstration
       TM dated August 3, 2009, showed that the COC concentrations will exceed cleanup
       levels at the nearest point of exposure, an intermittent creek located on the offsite
       affected property. Therefore, it was confirmed that a PMZ would not meet the remedial
       action goals and would not be an appropriate remedy for the groundwater at the Yoda
       Site, and the currently selected remedial action continues to best fit the statutory criteria
       for remedial selection.

VI.    ACTION LEVELS

Remedial Action Objectives are the stated goal of the remedy that must be achieved to make the
site protective of human health and the environment. Action levels are the maximum numeric
concentrations of the COCs which must not exceed the Tier 1 PCLs for the appropriate land use
and groundwater resource classification. For the onsite and offsite groundwater, the Tier 1 PCLs
are those developed for Class I groundwater resources established in TRRP. For the onsite soil,
the Tier 1 PCLs are those developed for Commercial/Industrial Soil with a greater than 0.5 acre
source area for groundwater protection, with the exception of TPH which was developed based

                                                4
                                                                                                       97
on site-specific exposure criteria. Those objectives and action levels are presented in the
following table for the specific COCs found at the Voda Site:

                                 ACTION
   GROUNDWATER
                                  LEVEL              REMEDIAL ACTION OBJECTIVES
 CONTAMIN ANT NAME
                               (Critical PCL)
 Benzene                                 5 µg/L Reduce COCs concentrations to levels below
 Dichloroethylene, 1, 1-                 7 µg/L the action level (TRRP Tier 1 PCL for
 Dichloroethane, 1,2-                    5 µg/L groundwater ingestion: TRRP Tier 1 owGW1ng)·
 Vinyl chloride                          2 µg/L

  SOIL CONTAMIN ANT              ACTION
        NAME                      LEVEL               REMEDIAL ACTION OBJECTIVES
                               (Critical PCL)
 Benzene                          0.013 mg/kg    Reduce COCs concentrations to levels below
 Dichloroethylene, cis-1,2-        0.12 mg/kg    the action level (TRRP Tier 1
 Ethyl benzene                       3.8 mg/kg   Commercial/Industrial Land Use PCL for
                                                 surface and subsurface soil to groundwater:
 Propylbenzene,n-                     67 mg/kg
                                                 TRRP Tier 1 C/I aw Soiling).
 MTBE                              0.93 mg/kg
 Tetrachloroethylene              0.025 mg/kg
 Toluene                             4.1 mg/kg
 Trichloroethane, 1, 1, 1-         0.81 mg/kg
 Trichloroethylene                0.017 mg/kg
 Trimethylbenzene, 1,2,4-             72 mg/kg
 Trimethylbenzene, 1,3,5-             79 mg/kg
 Vinyl chloride                   0.011 mg/kg
 Xylene, m                            53 mg/kg
 Xylene, o                            35 mg/kg
 Xylene, p                            75 mg/kg

VII.   THE SELECTED REMEDIAL ACTION

In accordance with 30 TAC§ 335.348(1) and the requirements of section 361.193 of the Solid
Waste Disposal Act, the TCEQ selects the Remedial Action for a site by determining which
remedial alternative is "the lowest cost alternative which is technologically feasible and reliable,
effectively mitigates and minimizes damage to the environment, and provides adequate
protection of the public health and safety and the environment." 30 TAC § 335.348(1). The
TCEQ has selected excavation with offsite disposal for the onsite soil, and the installation of
reactive biobaiTier wells with institutional controls for the onsite and offsite shallow
groundwater.

                                                 5
                                                                                                       98
Also in accordance with TRRP, the Performing Parties (or the TCEQ if no parties agree to fund
or perfmm the remedial action) shall record an institutfonal control in the real property records
of Gregg County. The institutional control shall be placed on each property which overlies
groundwater contaminated above the PCLs and shall describe the specific area of the
groundwater plume on each affected property. The institutional control shall remain in place
until such time as the TCEQ has determined that the Remedial Action Objectives have been
pe1manently achieved. If the Remedial Action is implemented by the TCEQ, the TCEQ will
request that the owner of each affected property voluntarily agree to record a restrictive covenant
to serve as the institutional control. If the property owner does not agree to the restrictive
covenant, the TCEQ shall record a deed notice to serve as the institutional control. If the
Remedial Action is implemented by Performing Parties, the Pe1forming Parties shall be
responsible for securing the institutional control in the form of a restrictive covenant from the
owner of the affected property. All of the elements of the Remedial Action described above shall
be in accordance with detailed requirements established in TRRP.

Monitor wells installed at the Voda Site shall be sampled for the COCs identified in Section VI,
Action Levels, and the hydraulic gradient shall be measured quarterly during the first two years
and semi-annually for the following two years of the Remedial Action. Monitoring results shall
be evaluated no less frequently than annually to verify that the plume has been reduced in both
areal extent and concentration of COCs. Once the TCEQ determines that the Action Levels have
been permanently achieved, the TCEQ will discontinue sampling and/or monitoring activities.

VIII. GLOSSARY

Feasibility Study (FS) - A description, screening, and analysis of the potential Remedial Action
alternatives for a site.

Hazard Ranking System (HRS) - The scoring sxstem used by the TCEQ to evaluate a site for the
state or federal Superfund program. The scoring system was developed by the United States
Environmental Protection Agency as described in 40 Code of Federal Regulations Part 300,
Appendix A~

Institutional Control - A legal instrument placed in the property records in the form of a deed
notice, restrictive covenant, or other form established in the TRRP rules which indicates the
limitations on or conditions governing the use of the prope11y which ensures protection of human
health and the environment.

Performing Parties - Collectively, 1) any patties who agreed to fund or conduct the remedial
action by entering into an agreed order with the TCEQ and 2) parties that did not enter into an
agreed order with the TCEQ but that fund or perf01m the selected Remedial Action.

Plume Management Zone (PMZ) - The area of the groundwater protective concentration level
exceedance (PCLE) zone, plus any additional area allowed in accordance with 30 TAC §
350.33(f).

                                                6
                                                                                                      99
Potentially Responsible Parties (PRPs) - Persons or entities that the TCEQ considers potentially
responsible for the contamination of the site pursuant to section 361.271 of the Texas Health and
Safety Code.

Proposed Remedial Action Document (PRAD) - The document which describes the TCEQ's
proposed Remedial Action.

Protective Concentration Level (PCL) - The concentration of a chemical of concern which can
remain within the source medium and not result in levels which exceed the applicable human
health risk-based exposure limit or ecological protective concentration level at the point of
exposure for that exposure pathway.

Remedial Action - An action, including remedial design and post-closure care, consistent with a
remedy taken instead of or in addition to a removal action in the event of a release or threatened
release of hazardous substances into the environment to prevent or minimize the release of a
hazardous substance so that the hazardous substance does not cause an imminent and substantial
endangerment to present or future public health and safety or the environment.

Remedial Investigation (RI) - An investigative study which may include removals, and/or a
feasibility study, in addition to the development of protective concentration levels, designed to
adequately determine the nature and extent of release or threatened release of hazardous
substances and, as appropriate, its impact on airs, soils, groundwater and surface water, both
within and beyond the boundaries of the site.

Solid Waste Disposal Act-Ch. 361 of the Tex. Health & Safety Code. The purpose of the Solid
Waste Disposal Act is to safeguard the health, welfare, and physical property of the people and to
protect the environment by controlling the management of solid waste, including any hazardous
waste that is generated. Subchapter F of Chapter 361 relates to the state Superfund process. The
Texas Health and Safety Code is available online at: http://www.statutes.legis.state.tx.us.

Texas Risk Reduction Program (TRRP) - A program of the TCEQ that provides a consistent
corrective action process directed toward protection of human health and the environment
balanced with the economic welfare of the citizens of the state. The mies for this program are
located in Chapter 350 of 30 Texas Administrative Code. The Texas Administrative Code is
available online at: http://www.sos.state.tx.us/tac/.

                                                7
                                                                                                     100
   V ODA PETROLEU·M, INC.
    STATE SUPERFU1'fD SITE
   ADMINISTRATIVE ORDER

            EXHIBITB

LIST OF SOLID WASTES AND llAzARDOUS
       SUBSTANCES AT THE SITE

                                      101
Dichloroethylene, cis-1,2-
Benzene
Propylbenzene, n-
MTBE (methyl tertiary-butyl ether)
Tetrachloroethylene
Toluene
Trichloroethane, 1, 1, 1-
Trichloroethylene
Trimethylbenzene, 1,2,4-
Trimethylbenzene, 1,3 ,5-
Vinyl chloride
Xylene, m-
Xylene, o-
Xylene, p-
Dichloroethylene, 1,1-
Dichloroethane, 1,2-

                                     102
    V ODA PETROLEUM, INC.
     STATE SUPERFUND SITE
    ADMINISTRATIVE ORDER

            EXHIBITC

FIELD SAMPLING PLAN CONTENTS OUTLINE

                                       103
                                      FIELD SAMPLING PLAN

                                       TABLE OF CONTENTS

Title and Approval Sheet

Distribution List

Table of Contents

1.0 Introduction

•       Investigation Phase: Purpose - Briefly states the specific purpose of this FSP relative to the
        Quality Assurance Project Plan, Work Plan and/or other documents. A schematic presentation of
        the project documents and the location ofkey planning components should be presented.

•      RA Phase: Purpose -Briefly states the specific purpose of this FSP relative to the RA Contract
       Document, Quality Assurance Project Plan and/or other documents. A schematic presentation of
       the project documents and the location ofkey planning components should be presented.

•      Project/Task Organization - Identifies the key individuals or organization participating in the
       project, their role(s) and responsibilities, and the organizational chart for the project. (Project
       specific information for QAPP Element A)1

2.0 Site and Project Summary

•      I11vestigati011 Phase: Problem Defi11itio11/Backgrou11d - Briefly states the site description,
       surrounding area, historical information, previous investigation, suspected contamination
       source, probable transport pathways and other site information. Most of this information is
       available from the Conceptual Site Model developed during the planning phase. Any specific
       data gaps and methods to fill the data gaps should also be discussed. States the specific problem
       to be solved or the decision to be made and identifies the decision maker. (Project specific
       information for QAPP Element A5)'

       RA Phase: Problem Dejinitio11/Backgrou11d - Briefly states the site description, historical
       information, previous investigation, a summmy of the selected remedy, a brief discussion of the
       remedial action activities. States the specific problem to be solved or the decision to be made
       and identifies the decision maker. (Project specific information for QAPP Element A5)'

•      Project/Task Descripti011 and Schedule - Briefly summarizes the project and the project tasks,
       the turnaround time for the project, including the turnaround time requirement for laboratory
       analysis. (Project specific information for QAPP Element A6)1

       Describes any special persomiel and equipment required for the specific type of work being
       planned or measurement being taken and any special training/certification requirements .
       (Project specific information for QAPP Element A8)1

                                                                                                             104
       Data Acquisitio11 Requirements (No11-direct Meas11reme11ts) - Defines the criteria for the use of
       non-measurement sources, such as computer databases, programs. literature files, and historical
       databases. (Project specific information for QAPP Element B9}1

       Assessme1tt Teclt11iques - Defines the number, frequency, and type of quality assessment
       activities, the responsible staff, the procedures to be peiformed during the life of the project.
       (Project specific infonnationfor QAPP Element Cl) 1

3.0 Analytical Requirements and Data Quality Objectives

       Data Quality Objectives - Summarizes the project specific quality objectives and measurement
       performance criteria. This section should include the summary ofi'he outcomes of the technical
       planning process (e.g., the 7-Step DQO process) used to develop the project objectives. The
       summa1y should also include a reference to Appendix B of the FSP, which contains a full
       discussion of the proposed DQOs for the project from which the summary was taken. Designates
       and briefly describes sampling units (e.g. AOCs, surface soil to 6 inches). States objectives by
       sampling unit or media. The project specific calculations or algorithms are also specified in this
       section. (Project specific information for QAPP Element A7) 1

4.0 Sampling Plan Design

•      Sampling Process Design - All the relevant components of the experimental design and the key
       parameters to be evaluated are included in this section. This section should include the sampling
       activities, the rational for the design (in terms of meeting the DQOs), the sampling design
       assumptions, the procedures for locating and selecting environmental samples, a classification
       ofmeasurements as critical or noncritical, the type and number ofsamples required for the
       project including the required field QC samples, the sampling locations and frequency, the
       applicable sample matrices, and an identification of samples critical to the project. Most of this
       information should be available from the output from Step 7 of the DQO process. (Project
       specific information for QAPP Element Bl/

•      Describes the sampling plan for each media, as applicable, including figures and tables.

       Surface Soil
       Subsurface Soil
       Groundwater
       Suiface Water and Sediment
       Air
       Other Matrices

       This section should include a summary table containing a list of all chemicals of concern
       identified for the project with the corresponding Level ofRequired Performance (LORP) (e.g.,
       action levels and prelimina7y remedial goals), analytical methods (including the preparation,
       analysis and cleanup methods), and the corresponding method quantitation limits for all
       analytes of concern.

                                                                                                            105
5.0 Sampling Methods and Sample Handling

•       Sampling Method Require111e11ts - Identifies sampling methods and equipment and describes the
        procedures for sample collection, preparation, and decontamination. This section should
        reference the Standard Operating Procedures located in Appendix A. (Project specific
        information for QAPP Element B2) 1

•       Sampling Ha11dling a11d Custody Requirements - 171is section should include the required
        sample volumes, container types, and preservation requirements for non-standard or other
        analytical methods proposed for project work that are not listed in Table B2-l of the Superfund
       Program QAPP. This section also includes the field sample handling and custody requirements
       for the project. (Project specific information for QAPP Element B3}1

•       This section contains the specific requirements for field instrument/equipment testing,
       i11spectio11 and mailite11ance for the project. Additionally, field instrument calibration and
       frequency requirements for water level, pH, temperature, conductivity, dissolved oxygen, redox
       potential, turbidity and other field measurements are addressed in this section as applicable to
       the project. This section also includes the critical field supplies, the inspection or acceptance
       testing requirements, and the acceptance criteria. (Project specific information for QAPP
       Element B6, B7, and B8) 1

6.0 Field Survey and Measurements

•       This section describes the sampling methods and criteria for field survey and measureme11ts,
        such as land surveys, hydrogeological tests and measurements, geophysical surveys and soil gas
        surveys, required for the project.

7.0 Additional Field Activities

•      This section contains descriptions and procedures for other field activities, such as
       presampling/mobilization activities, required notification, property access, site restoration and
       investigative-derived waste (JDW) handling and disposal.

8.0 Exceptions, Additions and Changes to the TCEQ Superfund Program QAPP

•      List any exceptions, additions a11d changes to the Superfund Program QAPP in each of the
       appropriate sub-sections corresponding to the table of contents of the Program QAPP below.
       Site specific information (e.g., Group A and Group B elements) specified above should not be
       restated in this section. Please refer to the Program QAPP for details. This section should also
       include specifications for non-standard methods and other analytical methods not specified in
       the Program QAPP.

        GROUP A: PROJECT MANAGEMENT
             A.1 Title and Approval Sheet
             A.2 Table of Contents
             A.3 Distribution List
             A.4 Project/Task Organization

                                                                                                           106
              A.5 Problem Definition/Background
              A. 6 Project/Task Description
              A. 7 Quality Objectives and Criteria
              A. 8 Special Training/Certification
              A.9 Documentation and Records
                      A.9.1 Field Operation Records
                      A.9.2 Laboratory Data Package
                      A.9.3 Laboratory Pe1forinance Criteria Data
                      A.9.4 Data Handling Records
                      A.9.5 Data Reporting Package Format and Document Control
                      A.9. 6 Field Records/Data Reporting Package Archiving and Retrieval

       GROUP B: DATA GENERATION AND ACQUISITION
            B.1 Sampling Process Design (Experimental Design)
            B.2 Sampling Methods
                     B.2.1 Sample Containers
                     B.2.2 Sample Volumes, Container Types, and Preservation Requirements
            B.3 Sample Handling and Custody
                     B.3.1 Field Sample Handling and Custody
                     B.3.2 Laboratory Sample Handling and Custody
            B.4 Analytical Methods
                     B.4.1 Screening Methods
                     B.4.2 Definitive Preparation Methods
                     B.4.3 Definitive Analysis Methods
                     B.4.4 Non-standard Method Validation
            B. 5 Quality Control
                     B. 5.1 Definitive Analytical Methods
                     B.5.2 Screening Methods
                     B.5.3 Quality Control Measure Descriptions
                     B.5.4 Elements of Quality Control
                     B.5.5 Method Detection Limit, Method Quantitation Limit and Sample
                     Quantitation Limit
            B.6 Instrument/Equipment Testing, Inspection, and Maintenance
                     B.6.1 Maintenance Responsibilities
                     B.6.2 Maintenance Schedules
                     B.6.3 Spare Parts
                     B.6.4 Maintenance Records
            B. 7 Instrument/Equ~YJment Calibration and Frequency
           B.8 Inspection/Acceptance ofSupplies and Consumables
            B.9 Non-direct Measurements
            B.10 Data Management
                     B.10.1 Logbooks and Forms
                     B.10.2 Data Storage/Retrieval

GROUP C: ASSESSMENT AND OVERSIGHT
     C.1 Assessments and Response Actions
     C.2 Reports to Management

                                                                                            107
GROUP D: DATA VALIDATION AND USABILITY
     D.I Data Review, Verification and Validation
     D.2 Verification and Validation Methods
     D. 3 Reconciliation with User Requirements

List of Tables

List of Figures

List of Appendices

• Appendix A - Standard Operating Procedures

•Appendix B - Data Quality Objectives Document

                                                           1
•Appendix C-Z - Other supporting documents as necessary.

Guidelines used in the preparation of the QAPP elements are:

•       EPA Requirements for Quality Assurance Project Plans, EPA QA/R-5 (EPA/240/B-01/003),
        March 2001

•      EPA Guidance for Quality Assurance Project Plans, EPA QA/G-5 (EPA/240/R-02/009),
       December 2002

                                                                                               108
                APP. B

TCEQ’s Response to Motion for Rehearing
                                                                                                                                n
                                                                                                       i

                                                           DOCKET NUMBER 2009 1706 SPF
                                                                                                                                                •
                                                                                                                                           I

                                                                                                       c

                IN       THE           MATTER OF
                                                                                                                                                              E
                                                                                                                TE S CPMMIS Q
           THE SITE KNOWN AS                                                                           j                        BEFORE TB                               l

          VODA PETROLEUM INC                                                                               I
                                                                                                               ENVIRONMENTAL QU
          STATE SUPERFUND SITE                                                                                                                                      d

                                                                                                       I

EXECUTIVE DIRECTOR'S REPLY TO LUMINANT'S MOTION FOR                                                                                                       REHE

                 To          the       Honorable               Commissioners of the Texas Commission on Environrriental
Quality
          1          1   j                                                                             f                                                                           I

      I         l'The         Executive                  Director            ED       of the        Teka's        CoiliIliission                    on    Eilvironnient'al

Quality                  TCEQ                 files thiS Reply to Luminant's                         Motion for Rehearing and respectfully
requests that the Comniissionel's deny the                                            motioh

I               Introduction                                                                                                                                        I

                 On          February              10 2010           the   ED presented            an Administrative Order                                 Ordef              to       the

Commissioners                                 Commission                   fOr their        consideration              After         allowing                 those          parties

who wished                    to       address the Comrhission the opportuhity to speak                                            the         Commission                    issued

the       Order pursuant                          to   Tex     Health          Safety        Code              361.188 and 361.272                            West           2010
Among              other           things the                  Order       listed   the     Voda Petroleum Inc                          State             Superfund                Site

     Site          on the              state           registry of Superfund                sites described             the facility                     and the            selected

remedial action                              named        those      parties        responsible       for the         solid       waste andlor hazardous

substances                   at   the Site and ordered responsible                            parties to remediate                   the Site

                 Luminant                    now        urges the Commission to reconsider                            its   decision                to   issue the Order

By        its    motion                 it    reiterates         a    request       made      to    and        denied       by the             Commission                     at       the

February                10 2010 Agenda                          meeting to delay issuance ofthe Order                                   and consequently                               the

remedial action                              so    that    Luminantmight                  explore the          possibility           of there being                         a lower

cost alternative                       to    remediation of the Site

II               Luminant's Motion for Rehearing                                       is   Improper Under the                    Law

                 Luminant                    is   not entitled to arehearing because                            the law did not afford                         it       a hearing

in the          first        instance              See     Tx        Health          Safety     Code            361.274           West 2010                     stating            that

     an         administrative                         order    under       Section         361.272        does      riot       require             prior     notice          or       ail

adjudicative                      hearing              before    the       commission               see    also id                361.188                 b    stating             that

    Subchapters                    I     which            includes         Section     361.272             K    and         L   relating             to    administrative

orders           apply            to   orders issued                 under     Section        361.188                Because            the Order was                         issued

under           Sections                361.272            and       361.188         Administrative               Order          1    it        did       not require                  an

adjudicative                      hearing before the                  Commission              Dallas       Power                Light      Company and Texas
Utilities          Generating                      Company predecessors in                     ir   tterest     to   Luminant                  are parties              named           in

and made subject to the Order                                         Order     5 16         and thus are not provided an opportunity                                                  for

                                                                                                                                                                                         VODA_AR_00049650
                                                                                                                                                                             REeelvr B

                                                                                                       I
                                               n                                                                                n

                                                                                                                                 i
                                                                                                                                                                                  A       I   YW
                                                                                                         I                                                                   AIR  QUAUTY
                                                                                                                                                                                 DMSION
Agenda         meeting                   Lui nirum t gives                 no        greater       det8 il    now           than then                  It    prdvides            no
                                                                                                         u idered

                                                                                                     ccif
inf01matio                     aut tqe          prapased               remedy being                                        ar        ts                                          1at
                      ab
                                                                                                                                            estin'late'd
                                                                                                                                                                  cast       1Y
Reh'g      1     It    says that                some           aftlfe     PRPs rjJorentiY                        responsible           partiesapjear                    w'illing

and able to fund                     this      lawer      Cost    alternative               but no other            PRPs jo ined Luminant                           s   motion
eemphasiS            added                    Lumitlant's            stated          purpo    se    is      vague and                full     of uncertainty                      In

additio    n    Luminant                  stateS      that      granting lts'motion fdr rehea ririg                                  wo uld        not unreasonably

delay cleanup              oftbe              Site        Mot     Ren'g         1         Yet   LUl ant                admits that            it   does      not yet have
a formal        propasal                 for a lawercast                   alternative             Mot Reh g                    4         Lumiria nt prbvides rio

guarantee that                 its       forthcoming propasal                        of a lowercost alternative                                Mot Reh              g    3 will
not    constitute              a fundamental                    change          in    the     sele'c     e d remedy such that                          ari6ther          public

meeting        will       be required                 with the attendant                    statutciy time frames                            See    30      Tex Adinin
Code            335349                b        Westlaw                  describing procepures for                               madifying                   the    proposed

remedial        action               see also         Tex        Health               Safety Cbtle                     361.187            West 2010                 out1in ihg

steps to be taken                   to   discuss the proposed                        action     with the cotnmuliity                           Delay under such a

scenario        is    inevitable                and        unnecessary                    The      ED        has       followed             applicable             TIlle s       and

regulations           in       conducting                 remedial investigations                        and        activities              including         extensively

evaluating remedial action                                alternatives           and sdecting                    the    remedy idetermined                        to    be       the

lowest cost           alternative                thar is technologically                        feasible            arid reiiable and                  that       effectively

mitigates and minimizes                              damage          to   and provides              adequate            protectibn of the public health

B'yits
and safety or the erivironment                                    Id        361 193           a
III         The COnui1ission Did Not                                      Err    When         it   Issued           the    Administrative                    Order       in      tne

            Matter of the Site                       Known           a    the    Voda Petroleum Inc                         State Superfund                   Site

                                                                                                                                                                             2
            The Commission would                                 not err if          it   denied Luminant's                     motion for rehearing

      motion Luminant                          requests          the    opportunity to               consider             a forthcoming proposal                             Mot
Reh'g      3    4         It    is   not clear            who     will     consider           the proposal                 It   is    equally unclear                  whether

any proposal                   is    based           as   it    must       be        on     TCEQ            rules       and     regulations                  The         motion

contains        assurances                as to      the reputation and competence                                  of Weston               Solutions             Weston
which Luminant                       states     is    in the process of developmg                                  a formal          proposal           Mot         Reh'g             3
4     It   recounts            that       Weston sampled                   wells arid reported results                               that indicate           that       Weston
can likely       perform a remedial action                                      at   a lower        c'o t          Mot Reh            g3           emphasis addedr

The        ED        on        the       other        hand           evaluated            nhiltipl               remedial        alternatives                through             the

feasibility      study process provided by rule to determine                                                           which remedy would best meet

the   statutorily              provided              remedial action                 criteria          Sie30            Tex Admin Code                                 335.348
eWestlaw               Further                 the    ED        complied with thest tutory and regulatory                                                    obligation to

present the selected remedial action                                       to   the public for cori1niertt                       See        Tex     Health               Safety

Code         361.187                 West       2010            30   Tex Admin Code                               335.349            Westlaw                The law does
not    require the                  Commission to grant                         a motion for rehearing to consider                                          a forthcoming

proposal         What               the law does                provide         is   that the       Commission                  shall        allow      PRPs           within         a

statutorily          specified                time frame             to    fund       or conduct                 a remedial investigation feasibility

study as approved                        by the executive                 director          Tex     Health                Safety          Code          361.185              West
2010        which was done

2   Presumably Luminant                    relies    on 30 Tex Admin Code                          80.272         Westlaw which                inter    alia requires             a

concise    statement           of each        allegation of       error         Alleging an         em       r   that has not yet occurred              is   arguably

inapposite      and   c unter            to   the rule

                                                                                          3

                                                                                                                                                                                      VODA_AR_00049651
                                                                                                                                                      RECEIVED
                                      n
                                                                                                                                                      AIR QUALITY
                                                                                                                                                        Oi VlSla
IV        Equitable          Considerations

                                                                                        i

          The      Commission                encourages       PRPs               to    negotiate              a   settlement                    Luminant

complains        that   the   Voda         Site   Group    Group             requited             it    to   pay a disproportionate                   share
a complaint best             made     to   and resolved by the Groupl                        If   no agreement can be reached and
no resolution can be had Luminant's                         equitable             rerdedy          is to      appeal        the    Order        to   district

court   and request           that   the court apportion          costs           Te c       Health               Safety         Code            361.321

22,361.343         West       2010

V         Conclusion

          In     summary Texas                    Superfund   law           is    car fully              crafted       to    achieve            two    main

objectives         first       that    government         be given               the    Jilecessary            tools    in        order    to        respond
promptly and effectively                    to    environmental     problems and second                                that       those responsible

for    the problems          bear the        costs   and responsibility                for    remedying the harmful conditions
they    created         The    law     governing        hearings    and appeals gives                          effect       to    the   first    of these

Granting       Luminant's motion for rehearing                     is   contrary             to        the law and thwarts                the statutory

tools provided          to   move forward            expeditiously toward remediation of Superfund                                              sites

          The      Executive          Director        respectfully          requests that the                     Commissioners deny                      the

Motion     for   Rehearing

                                                          Respectfully                 submitted

                                                          Texas Commission on Environmental Quality

                                                          Mark     R        Vickery               PG
                                                          Executive              Director

                                                          bY
                                                          Stephanie Bergeron                           Perdue Deputy               Director

                                                          Office of          Lega            Services

                                                          Kathleen           C Decker                   Division Director

                                                          Litigation Division

Dated      March 23,2010
                                                          Charmaine               K         Backens
                                                          State Bar of Texas                       No 24045059
                                                          Litigation             Division           MC 175
                                                          PO       Box 13087
                                                          Austin Texas 78711 3087
                                                           512 239 1873
                                                           512 239               3434         FAX
                                                          Attorney for the Executive                              Director

                                                                        5

                                                                                                                                                                VODA_AR_00049652
                             n                                               n                   RECEIVED
                                                                                                    MAY   1   LUlU

                                                                                                 AIR QUALJTY
                                             Certificate   of Service
                                                                  l
                                                                                                      DIVISION

       r hereby       certify   that   on March   23 2010     the original of the foregoing    Executive

Director's    Reply    to   Luminant's      Motion for Rehearing        and seven   7   copies were   filed

with the Chief Clerk Texas Commission on Environinental Quality Austin                      Texas
                                                                                           H
       r further certify that on this day a copy of the foregoing             document    wa s
each of the   parties   as indicated

       Via Certified Mail Return Receipt Requested
       Mr     John    A     Riley

       Vinson          Elkins    LLP
       2801 Via Fortuna Suite 100
       Austin Texas 78746

       Via Electronic Submittal

       Mr     Les Trobman Attorney
       Office of the General           Counsel    MC   101

       Texas Commission on Environmental Quality

       PO      Box 1307
       Austin Texas 78711 3087

       Via Electronic           Submittal

       Mr     BIas    Coy Jr        Attorney

       Office of Public Interest Counsel            MC      103

       Texas Commission on Environmerital Quality

       PO      Box 1307
       Austin Texas 78711 3087

       Via    First   Class Mail

       Persons on the Mailing List

                                                au 64ra
                                                Charmaine     K Backens

                                                                                                          VODA_AR_00049653
                 APP. C

Plaintiffs’ First Amended Original Petition
                  (CR:4-27)
                                                                                     Filed
                                                                                     10 March 26 A10:07
                               D-1-GN-10-000772                                      Amalia Rodriguez-Mendoza
                                                                                     District Clerk
                                     XXXXXXXXXXXXXXXXX
                                     NO. D-l-GN-10-000793                            Travis District
                                                                                     D-1-GN-10-000793
CHEVRON USA INC., EXXON MOBIL       §                    IN THE DISTRICT COURT OF
CORPORATION, MOBIL OIL              §
CORPORATION, PENNZOIL-QUAKER        §
STATE COMPANY, SHELL OIL            §
COMPANY, TEXACO CHEMICAL            §
COMPANY, TEXACO INC., WARREN        §
PETROLEUM COMP ANY                  §
                                    §
                         Plaintiffs §
                                    §
VS.                                 §                    TRAVIS COUNTY, TEX A S
                                    §
TEXAS COMMISSION ON                 §
ENVIRONMENTAL QUALITY, AND,         §
EACH IN HIS OFFICIAL CAPACITY,      §
BRYANW. SHAW AS TCEQ CHAIRMAN,§
BUDDY GARCIA AS TCEQ                §
COMMISSIONER, AND CARLOS            §
RUBINSTEIN AS TCEQ COMMISSIONER §
                                    §
                         Defendants §                    4191h JUDICIAL DISTRICT

                   PLAINTIFFS' FIRST AMENDED ORIGINAL PETITION

TO THE HONORABLE JUDGE OF SAID COURT:

        COMES NOW, Plaintiffs, (as specifically identified below and collectively referred to as

the "Plaintiffs"), complaining of Defendants the Texas Commission on Environmental Quality

("TCEQ") and Chairman Bryan W. Shaw, Commissioner Buddy Garcia, and Commissioner

Carlos Rubinstein, each in their official capacity ("Commissioners"), by this First Amended

Original Petition seeks declaratory judgments regarding, and a de nova review of, the TCEQ's

issuance of a unilateral Administrative Order ("AO" or "Order") seeking payment from the

Plaintiffs of an unspecified sum of money to be determined in the future for certain costs related

to investigations undertaken at the Yoda Petroleum state superfund site and directing the

Plaintiffs to begin a remedial action, without an opportunity for an adjudicative hearing. As

grounds for review, Plaintiffs would show as follows:

Plaintiff's First Amended Petition
                                                                                            Page 1
A-230571 4.DOC                                                                                       4
                                               I.
                                            PARTIES

        1.       Plaintiff Texaco Inc., a Delaware corporation, 1s successor to Texaco

Chemical Company. Texaco Inc. is a subsidiary of, and Plaintiff Warren Petroleum

Company is a former division of, Plaintiff Chevron USA Inc., a Pennsylvania corporation.

Plaintiff Mobil Oil Corporation, a New York corporation, is a subsidiary of Exxon Mobil

Corporation, a New Jersey corporation.          Plaintiff Pennzoil-Quaker State Company, a

Delaware corporation, is a successor by merger to Westland Oil Company, Inc., Specialty

Oil Company, Inc., and Industrial Lubricants Co. Plaintiff Shell Oil Company, is a

Delaware corporation.        The TCEQ' s AO names as potentially responsible parties ("PRPs")

Industrial Lubricants Co., Mobil Oil Company, Shell Oil Company, Specialty Oil

Company, Texaco Chemical Company, Warren Petroleum Company and Westland Oil

Company Inc.

        2.       Defendant TCEQ is an administrative agency of the State of Texas. Service of

process may be accomplished by personal delivery of citation to the Executive Director of the

TCEQ, Mr. Mark Vickery, P.G., located at 12100 Park 35 Circle, Building F, Austin, Travis

County, Texas 78753.

        3.       Defendant Bryan W. Shaw is sued in his official capacity as a Commissioner and

Chairman of the TCEQ. Service of process upon Mr. Shaw may be accomplished by personal

delivery of citation to Mr. Shaw at 12100 Park 35 Circle, Building F, 4th Floor, Room 4221,

Austin, Travis County, Texas 78753.

        4.       Defendant Buddy Garcia is sued in his official capacity as a Commissioner of the

TCEQ.        Service of process upon Mr. Garcia may be accomplished by personal delivery of

citation to Mr. Garcia at 12100 Park 35 Circle, Building F, 4th Floor, Room 4221, Austin, Travis

County, Texas 78753.

Plaintiff's First Amended Petition
                                                                                           Page 2
A-230571 4.DOC                                                                                      5
        5.       Defendant Carlos Rubinstein is sued in his official capacity as a Commissioner of

the TCEQ. Service of process upon Mr. Rubinstein may be accomplished by personal delivery

of citation to Mr. Rubinstein at 12100 Park 35 Circle, Building F, 4th Floor, Room 4221, Austin,

Travis County, Texas 78753.

                                               II.
                                     DISCOVERY CONTROL PLAN

        6.       Plaintiffs seek to conduct discovery under a Level 3 Discovery Control Plan.

                                               III.
                                     JURISDICTION AND VENUE

        7.       This is a direct appeal of a unilateral Administrative Order issued by the TCEQ on

February 12, 2010. A copy of the Order is attached hereto.

        8.       This action is brought pursuant to§§ 361.188(b), 361.321, and 361.322 of the

Texas Health and Safety Code and § 37.001, et. seq. of the Texas Uniform Declaratory

Judgments Act ("TUDJA").             Section 361.321 allows a person affected by a ruling, order,

decision or other act of the TCEQ to appeal said ruling, order, decision, or other act by filing a

petition in a district court of Travis County. Plaintiffs are all named by the TCEQ in the Order as

parties responsible for reimbursing the TCEQ's expenses related to certain investigations into

potential environmental contamination at a state superfund site, as well as ordered to undertake

remedial action; as such, Plaintiffs are affected by the Order. Section 361.322 allows any person

subject to an administrative order issued pursuant to Texas Health & Safety Code § 361.272 to

appeal said order in district court. Because the Order at issue was issued pursuant to § 361.271

and§ 361.272, and the Plaintiffs are all persons subject to the Order, § 361.188(b) makes the

Order subject to appeal under§§ 361.321 and 361.322. Finally, the Texas Uniform Declaratory

Judgments Act, Texas Civil Practices and Remedy Code § 37.004 allows this district court to

Plaintiff's First Amended Petition
                                                                                                Page 3
A-230571 4.DOC                                                                                           6
declare that the Order       IS   invalid, or   IS   an ultra vires action by the TCEQ and/or the

Commissioners.

        9.       This action is timely filed under the provis10ns of §§ 361.321 and 361.322.

Section 361.321 provides that an appeal must be brought not later than the 301h day after the

ruling, order, decision, or other act of the governmental entity (here, the TCEQ) whose action is

appealed. The TCEQ issued the unilateral order effective as of February 12, 2010, but served the

Order on PRPs subsequent to that date. Accordingly, this petition, which is filed within 30 days

of that date, is timely. Section 361.322 provides that an appeal brought pursuant to that section

must be filed before the 461h day after the date of receipt, hand delivery, or publication service of

the order that is being appealed. Accordingly, this petition, which is filed within 46 days of the

date of publication and receipt, is timely.

        10.      Venue is proper in Travis County District Court pursuant to § 361.32l(a) of the

Texas Health and Safety Code. As stated above, Section 361.321 allows a person affected by a

ruling, order, decision or other act of the TCEQ to appeal said ruling, order, decision, or other act

by filing a petition in a district court of Travis County. Plaintiffs are "persons affected" by the

Order and "persons subject to" the Order because each is named as a "responsible party" who

has been ordered to conduct remedial activities and reimburse the TCEQ's Hazardous and Solid

Waste Remediation Fee Account for costs the TCEQ allegedly incurred.

                                                      IV.
                                     FACTUAL BACKGROUND
        11.      The tract of land designated by the TCEQ as the "Yoda Petroleum State

Superfund Site" (the "Site") is comprised of approximately 6.12 acres located in Gregg County,

Plaintiff's First Amended Petition
                                                                                               Page 4
A-230571 4.DOC                                                                                          7
Texas. According to TCEQ 1 records, the Site was historically used as an oil recycling facility

from approximately 1981 to 1991, when all operations ceased and the Site was essentially

abandoned by the owners and operators.

        12.      In 1995, the TCEQ conducted an investigation of the Site to determine if the

historic operations had resulted in environmental contaminants entering the groundwater and/or

soils at the Site.     Part of this investigation included a Hazard Ranking System ("HRS")

evaluation of the Site. The HRS is a scoring system used to evaluate potential, relative risk(s) to

public health and the environment from releases or threatened releases of hazardous substances.

The HRS score assigned to a site as the result of the evaluation is the primary factor in deciding

if that site is eligible to be placed on the federal National Priorities List. The HRS score assigned

to the Site was not sufficient to qualify the Site as a federal Superfund Site. Instead, the Site was

referred in 1995 to the United States Environmental Protection Agency ("EPA") for an

immediate removal action to address the TCEQ' s belief that the Site presented an imminent and

substantial endangerment to public health and the environment.

        13.      An EPA Action Memorandum, dated March 27, 1996, documented that, in

addition to the presence of hazardous substances, the Site received crude oil. The Action

Memorandum also noted the presence of large quantities of oil that were subject to the Clean

Water Act and the Oil Pollution Act.

        14.      In 1996, the EPA removed drums of grease or oily wastes, drums of corrosive

wastes, aboveground storage tanks, and contaminated soils. Fencing was also installed around

the Site at this time to restrict public access to the Site to insure public health and safety.

1
  During some of the events outlined in the Factual Background, the TCEQ was known as the Texas Natural
Resource Conservation Commission. For convenience, the agency is referred to throughout this document by its
current name, the TCEQ.

Plaintiff's First Amended Petition
                                                                                                     Page 5
A-230571 4.DOC                                                                                                 8
        15.      In December 1997, after the removal action was complete, EPA's contractor

sampled both on-site soils and groundwater as part of a post-removal action assessment. EPA' s

assessment found that the removal action had removed minimized the threat of direct human

contact and inhalation threats that may have been present pre-removal.

        16.      The EPA then sought recovery of the costs it incurred in undertaking this removal

action, and in 1999 and 2000, the EPA settled with a number of companies that the EPA had

named as potentially responsible parties for the Site, including Shell Oil Company and Industrial

Lubricants Co., which settled as de minimis parties, and Mobil Oil Corporation, which made a

significant settlement payment to EPA

        17.      EPA was informed that Westland Oil, a subsidiary of Specialty Oil Company,

periodically sent unused (virgin) lube oil mixed with water to Yoda to be dehydrated. The oil

was then returned to Westland and sold by Westland.        Some of the virgin oil obtained from

Westland may also have been sold by Yoda to third parties, and Westland may have purchased

oil that had been obtained by Yoda from other facilities. The evidence regarding the Westland

facts and the status of the Westland lube oils includes the Yoda Petroleum documentation and

sworn statements by Mr. Ron Yoda, the operator of Yoda Petroleum, and others.                 EPA

determined that the Westland lube oil qualified for the CERCLA petroleum exclusion and that

the transactions between Westland/Specialty and Yoda did not constitute the arrangement for

treatment or disposal of a hazardous substance. The factual record also demonstrates why this

Westland Oil was not "waste" (it was never discarded) and thus was not "solid waste" under

Section 361.003 of the Texas Health and Safety Code.          EPA did not demand a settlement

payment or pursue a claim for the Westland materials shipped to Yoda.

        18.      According to the sworn statements of Mr. Yoda, and upon the Plaintiffs'

information and belief, different sections of the property were operated by two separate entities -

Plaintiff's First Amended Petition
                                                                                             Page 6
A-230571 4.DOC                                                                                        9
Yoda Petroleum and Ultra Oil. Ultra Oil conducted operations on approximately one acre of the

property (also known as the "Southwest Tank Farm"). While the Southwest Tank Farm was

eventually purchased by Mr. Yoda, there were no Yoda Petroleum operations on the Southwest

Tank Farm at any time. The EPA stated that the PRPs who sent materials to the Site would not

be liable for the EPA' s costs associated with the Ultra Oil operations at the Site.

           19.   TCEQ had knowledge of the EPA's removal action, post-removal sampling and

assessment results, and of the EPA settlement.             Plaintiffs are unaware of any TCEQ

correspondence commenting on or disputing the sufficiency of the EPA removal action at the

time of the removal action itself or immediately following the removal action.

           20.   On information and belief, Yoda Petroleum's operation segregated paraffin

materials into specific geographic areas of the Yoda site, specifically the "West Tank Farm."

EPA' s removal action addressed the contamination in the areas where paraffin was stored or

spilled.

           21.   Three years after the EPA removal action, and without re-scoring the Site under

the HRS, the TCEQ proposed the Site for listing on the State Superfund Registry on November

17, 2000 and published a Notice of that proposal in the Texas Register ( 25 Tex. Reg. 11594).

           22.   In November, 2000 the TCEQ also sent correspondence to certain entities it

believed had historically shipped materials to the Site. That correspondence asserted that the

recipient was considered by the TCEQ to be a PRP at the Site as defined in § 361.271 of the

Texas Health & Safety Code (the Texas Superfund Statute), and therefore potentially responsible

for environmental investigation and eventual remediation at the Site.           The correspondence

informed the recipients of the Site's proposed listing on the State Registry and the date for

submitting comments on the proposed listing.           The correspondence included a Notice of

Opportunity to Make Good Faith Offer to conduct a Remedial Investigation/Feasibility Study

Plaintiff's First Amended Petition
                                                                                             Page 7
A-230571 4.DOC                                                                                        10
("RI/FS") at the Site. Several PRPs submitted written comments and objections, particularly

complaining that there was no empirical data to support an imminent and substantial

endangerment finding and no evidence to support listing the Site on the State Superfund

Registry.

        23.      Upon information and belief, the statutory requirement to notify all persons

potentially responsible for the Site's contamination, the November, 2000 Notice of an

opportunity to conduct the RI/FS, was not provided to numerous entities, for which the TCEQ

had records in its possession allegedly identifying these companies as entities that had allegedly

shipped hazardous materials to the Site (herein after the "No-Notice PRPs"). Accordingly, the

No-Notice PRPs had no knowledge of, or opportunity to participate in, the TCEQ's proposed

RI/FS or to provide comments on the Site's proposed listing on the State Registry, despite

TCEQ's knowledge of their alleged shipments to the Site.

        24.      On or about March 6, 2001, the TCEQ sent correspondence to several of the

entities who had allegedly shipped significant quantities of material to the Site and who had

received the TCEQ RI/FS Notice as PRPs. That correspondence informed each of those entities

that they had been removed from the TCEQ's PRP list, purportedly releasing these entities from

liability related to the Site. In several of the letters, TCEQ cited as the reason for removing the

PRP, the so-called CERCLA "petroleum exclusion", which exclusion TCEQ staff currently deny

exists under the Texas Health and Safety Code.       The entities receiving these letters are not

named as parties to the Order. The documentation those entities submitted and on which the

TCEQ relied at least in part to remove them from the TCEQ PRP list, on the basis that the

petroleum exclusion had been met, included EPA' s conclusion that "the bulk of the material on

the list" attributed to Specialty Oil/Westland Oil Co., "did not support attribution of CERCLA

Plaintiff's First Amended Petition
                                                                                             Page 8
A-230571 4.DOC                                                                                        11
liability because it appeared that the Voda facility de-watered those materials and then returned

them to Specialty."

        25.      According to its records, the TCEQ undertook remedial investigations and a

feasibility study at the Site from 2001 through 2008.

        26.      In June, 2008, the TCEQ issued a Remedy Selection Document. This document

provides a discussion of, and the TCEQ's conclusions regarding, a proposed remedy for the Site.

The remedy proposed by TCEQ consists of soil removal and off-site disposal, together with the

installation of a bio-reactive barrier in the groundwater. TCEQ estimates that this remedy will

cost $1.2 Million dollars.

        27.      On February 12, 2010, the Commission issued its unilateral Administrative Order

with respect to the Site to 350 parties, including the Plaintiffs. There was no evidentiary hearing

held before the Order was issued, nor was there an opportunity for such an evidentiary hearing.

        28.      The Order makes various Findings of Fact, including listing persons identified by

the Commission as PRPs for the solid waste and/or hazardous substances at the Site. The Order

further includes a Conclusion of Law that the PRPs are responsible parties ("RPs"). Among

those listed as RPs are the Plaintiffs.

        29.      The Order purports to establish, among other things, (1) the RPs for the Site, (2)

the existence of a release or threatened release of a hazardous substance or solid waste, and (3)

that there is an imminent and substantial endangerment. It then orders the RPs to reimburse the

TCEQ for all costs related to the RI/FS, to reimburse the TCEQ's past and future costs in some

unspecified amount, to undertake remedial activities based on the Remedy Selection Document,

and to provide post-construction financial assurance, among other responsibilities. The Order

also asserts that stipulated penalties accrue for failure to comply with the Order or its deadlines.

The Order does not specify the amount of the TCEQ costs, or explain why they are reasonable or
Plaintiff's First Amended Petition
                                                                                              Page 9
A-230571 4.DOC                                                                                         12
appropriate or why the TCEQ's actions were necessary or appropriate. Rather, the Order states

that the RPs will receive at some time in the future a demand letter from the TCEQ stating the

amount owed. As authority for the Order, the Commission cites to the Texas Health and Safety

Code, Chapter 361, §§ 361.188 (Final Administrative Order) and 361.272 (Administrative

Orders Concerning Imminent and Substantial Endangerment).

        30.        Westland operated a lubricating oil blending and packaging facility in Shreveport,

Louisiana.       This was not a manufacturing plant per se, and did not operate processes that

generated waste streams of used or waste oils. Westland, at times referenced by the name of its

parent Specialty, sent unused lubricating oil to Yoda Petroleum in order to have it dewatered.

The oil was then returned to Westland and sold to others. Some of the oil may have been sold by

Yoda to others after dewatering. The Westland lubricating oil is excluded from the definition of

hazardous substance under CERCLA, 42 U.S.C. § 9601(14) and the Texas SWDA (Chapter 361

of the Health and Safety Code), Tex. Health & Safety Code § 361.003(11). This material does

not constitute a solid waste under §361.003(34) of the Health and Safety Code as it was never

discarded. Moreover, even assuming, arguendo, it could be considered a "waste," the valuable

material sent from the Westland/Specialty facility to Yoda qualifies for exclusions under federal

and state law from the definition of "solid waste" including, e.g., the exclusion for commercial

chemical products at 30 Tex. Admin. Code § 335.1(133) (D) (iii) and 40 C.F.R. § 261.2(c) (3).

For these reasons, EPA did not seek a settlement from or pursue a claim against Westland Oil or

its parent Specialty Oil. TCEQ has recognized both the referenced petroleum exclusion and the

exemptions from the solid waste definitions in many regulatory contexts and similar factual

situations.      Shell Oil Company sent no materials to Yoda.       A Shell branded service station

operated by an independent dealer reportedly sent a single shipment of material to Yoda.

Plaintiff's First Amended Petition
                                                                                              Page 10
A-230571 4.DOC                                                                                          13
        31.      Mobil Oil Corporation reportedly sold and sent paraffin or wax material to Yoda

Petroleum. The material was food grade quality for use in food packaging. It was sent to Yoda

because it was off specification, but it was not contaminated. This material had commercial

value and was petroleum based.       Neither Exxon Mobil nor Mobil Oil sent materials to Yoda

from gasoline service stations. Service stations branded Exxon or Mobil, on information and

belief operated by independent dealers, reportedly sent material to Yoda.

        32.      Warren Petroleum reportedly sold and sent used lubricating oil to Yoda for

reclaiming. Texaco Chemical Company reportedly sold and sent to Yoda certain materials from

a facility in Texas. Chevron USA Inc., Texaco Inc., Texaco Chemical, and Warren Petroleum did

not send materials to Yoda from gasoline service stations. Two Texaco branded stations, on

information and belief operated by independent dealers, reportedly sent material to Yoda.

                                                 v.
                                             DENIAL

        33.      Plaintiffs demand TCEQ meet its burden of proof that the Site constitutes an

imminent and substantial endangerment and that Plaintiffs are liable for Site-related

environmental remediation and/or associated costs as required in § 361.322(g) of the Texas

Health and Safety Code.

        34.      Plaintiffs deny that they have caused or contributed to the alleged release or

threatened release of any solid waste or hazardous substances from or at the Site that are causing

or contributing to alleged environmental contamination at the Site.

        35.      Plaintiffs deny that they have committed acts or omissions which have resulted in

any release or threatened release of solid waste or hazardous substances from or at the Site.

        36.      Plaintiffs deny that they are a PRP or a RP as defined in the Order. The evidence

relied upon by the Commission to establish that Plaintiffs contributed any amount of solid waste

Plaintiff's First Amended Petition
                                                                                            Page 11
A-230571 4.DOC                                                                                        14
and/or hazardous substances to the Site is inherently unreliable, constitutes hearsay, and lacks

support by any other corroborating documentary evidence. Further, Plaintiffs were given no

opportunity to challenge or rebut this "evidence" in violation of their due process and other legal

rights.

          37.    Plaintiffs deny that they sent hazardous substances or solid wastes to the Site as

defined by relevant law.

          38.    Plaintiffs deny that the contamination at the Site constitutes an "actual or

threatened release of solid waste that presents an imminent and substantial endangerment to the

public health and safety or the environment" as required to support Order issuance by Texas

Health & Safety Code § 361.272(a) and § 361.188(a) (1).           The definition of imminent and

substantial endangerment as defined in the TCEQ's rules at 30 Texas Administrative Code §

335.342 is as follows: "[a] danger is imminent if, given the entire circumstances surrounding

each case, exposure of persons or the environment to hazardous substances is more likely than

not to occur in the absence of preventive action. A danger is substantial if, given the current state

of scientific knowledge, the harm to public health and safety or the environment which would

result from exposure could cause adverse environmental or health effects." Plaintiffs deny that

this Site met this standard at the time the Order was issued because, among other things:

          a.     Exposure of persons or the environment to hazardous substances was not "more

                 likely than not" because EPA' s contractor's assessment found that the 1997 EPA

                 removal action had minimized the threat of direct human contact and inhalation

                 threats that may have been present pre-removal, residual contamination was

                 covered with clean soil and grass; and the Site was fenced to preclude public

                 access;

Plaintiff's First Amended Petition
                                                                                              Page 12
A-230571 4.DOC                                                                                          15
        b.       TCEQ's 2009 Remedy Selection Document at p. 3-4, states that the Site is not a

                 threat to ecological resources because there are insignificant ecological exposure

                 pathways at the Site;

        c.       Exposure from contaminated groundwater is not likely, due to gradient direction

                 and plume stability data provided to TCEQ documenting that constituents of

                 concern have not continued to migrate and in fact may be attenuating

                 significantly;

        d.       TCEQ's 2009 Remedy Selection Document at p. 2 acknowledges that the EPA

                 response action "removed the immediate threat to human health and the

                 environment";

        e.       Upon information and belief, although TCEQ has studied the Site, the TCEQ has

                 not taken any remedial actions to protect humans or the environment from

                 potential exposure pathways from 1997 until the present, including a three year

                 period between the EPA removal action and the TCEQ proposed listing on the

                 State Superfund Registry and an eight year RI/FS period.

        39.      Plaintiffs deny that proper statutory notice of the RI/FS was given to many of the

PRPs, and thus deny that the Order is reasonable.

        40.      Plaintiffs deny that the Order is supported by the preponderance of the evidence

as to the TCEQ's claims of necessity, appropriateness, and reasonableness of past and future

investigations and remedial and removal costs incurred by the TCEQ. This includes the TCEQ

determinations related to imminent and substantial endangerment.

        41.      Plaintiffs deny that materials they are alleged to have sent to the Site have caused

or contributed to the remedial activities ordered to be conducted by the TCEQ in the Order.

Plaintiff's First Amended Petition
                                                                                              Page 13
A-230571 4.DOC                                                                                          16
        42.      Plaintiffs deny that they are liable for remedial actions or costs associated with

the Southwest Tank Farm, also known as Ultra Oil.

        43.      Plaintiffs deny they are "arrangers" for purposes of liability under the Texas Solid

Waste Disposal Act, based on the Supreme Court ruling in Burlington Northern & Santa Fe

Railway Co., et al. v. United States ("BNSF") as the requisite intent was not present.

        44.      Plaintiffs deny that they can be liable for the actions of an independent service

station dealer, even assuming arguendo that the dealer sent materials to the Yoda site.

        45.      In the alternative, Plaintiffs assert that they are no more than de minimis

contributors to any contamination at the Site.

        46.      Plaintiffs contend that any contribution from them to the site is divisible, and they

are not subject to joint and several liability.

        47.      For all the reasons stated in this Petition, the Plaintiffs deny that the Order is

reasonable and therefore it must be overturned pursuant to Texas Health & Safety Code §

361.32l(e).

                                              VI.
                                        ORDER IS INVALID

        48.      The Order lacks finality because it requires additional, discretionary actions by

the TCEQ. Specifically, the Order requires the TCEQ to make discretionary decisions in the

future about the eligibility, necessity, appropriateness, and reasonableness of past and future

TCEQ costs to be paid by Plaintiffs as RPs, and even the amount of those costs. Accordingly,

the Order is neither effective nor enforceable against any Plaintiff, and is of no legal effect.

Plaintiffs seek a declaratory judgment recognizing that the Order is of no legal effect.

        49.      At no time prior to the issuance of the Order did the TCEQ afford Plaintiffs an

opportunity for an adjudicative hearing as to their status as a PRP. As a result, Plaintiffs have
Plaintiff's First Amended Petition
                                                                                               Page 14
A-230571 4.DOC                                                                                           17
had no opportunity to protect their interests before being adversely affected by the actions taken

by the authority of the Order.         The Order violates due process rights afforded by the U. S

Constitution (u.s.   CONST.   art. XIV) and Texas Constitution (TEX. CONST. art. I, § 19).

        50.      The Order further violates Plaintiffs' United States and Texas due process rights

because it does not afford Plaintiffs' the opportunity for an adjudicative hearing as to the

necessity, appropriateness, and reasonableness of past and future investigation and remedial

costs incurred by the TCEQ for which it seeks a reimbursement. As a result, Plaintiffs have had

no opportunity to protect their interests before being adversely affected by the actions taken by

the authority of the Order. At no time prior to the issuance of the Order were the Plaintiffs

afforded an opportunity to prove by a preponderance of the evidence that the release or

threatened release is divisible pursuant to Texas Health & Safety Code § 361.276. As a result,

Plaintiffs have had no opportunity to protect their interests before being adversely affected by the

actions taken by the authority of the Order.

        51.      The Order imposes liability on certain Plaintiffs who are in the same position as

other entities who were released by the TCEQ from liability under the so-called "petroleum

exclusion" exception of CERCLA. This is unreasonable, arbitrary and capricious and violates

the equal protection clauses of both the United States and Texas Constitutions.

        52.      The Order constitutes an ultra vires act by the TCEQ and/or the Commissioners

on several grounds, including the following:

              a. The Order is not properly limited m scope as contemplated by the vanous

                 applicable statutory provisions of the Texas Health and Safety Code, such as

                 §§ 361.19l(d) and 361.192, both of which limit the TCEQ's recovery to

                 "reasonable" costs.

Plaintiff's First Amended Petition
                                                                                             Page 15
A-230571 4.DOC                                                                                         18
            b. The Order names many Plaintiffs who did not receive the required statutory notice

                 (referred to previously as the No-Notice PRPs) that was provided to some of the

                 named RPs via the November 6, 2000, Notice of Opportunity to Make a Good

                 Faith Offer for the RI/FS. Texas Health & Safety Code§§ 361.184(b) and .185

                 require the TCEQ to make "all reasonable efforts" to identify PRPs and to provide

                 identified PRPs with written notice of an opportunity to make a Good Faith Offer

                 to fund or perform the RI/FS. While the TCEQ did send correspondence to some

                 of the PRPs seeking a good faith offer to fund or perform the RI/FS, on

                 information and belief, approximately 150 companies (or close to 50% of the

                 PRPs), including the No Notice Plaintiffs, did not receive an opportunity to make

                 a good faith offer, even though the TCEQ has acknowledged that it had in its

                 actual possession records containing the names of those companies as allegedly

                 shipping materials to the Site. The TCEQ did not undertake the minimal effort of

                 reviewing the documents in its possession to make a list of those companies and

                 include them as recipients of the November 6, 2000 Notice and thus allow them

                 an opportunity to participate in the RI/FS process.       This defect impacts the

                 Plaintiffs in two significant ways. First, the TCEQ unilaterally performed the

                 RI/FS over a period of almost eight years, incurred costs, and is now seeking

                 reimbursement of those costs from those it failed to properly notify. Second, the

                 RI/FS process is so fundamental to the remedy selection process that a flaw in the

                 RI/FS process unavoidably and profoundly taints the remedy process. The Texas

                 Health & Safety Code creates a statutory scheme in which the culmination of the

                 RI/FS process -- the proposed remedy -- is what serves as the basis for the

                 Remedy Order. The TCEQ's RI/FS Notice defect means that approximately 50%

                 of the identifiable PRPs at this Site had no opportunity to participate in the RI/FS
Plaintiff's First Amended Petition
                                                                                              Page 16
A-230571 4.DOC                                                                                          19
                 process through public comments or otherwise.           Had all of the PRPs been

                 properly notified and allowed to participate in the development and evaluation of

                 the alternative remedies, a remedy significantly different from the one chosen by

                 the TCEQ could have been studied, selected and implemented in an agreed

                 manner by the parties. The failure to comply with the fundamental statutory

                 notice requirements related to the RI/FS Notice thus renders the Order invalid,

                 arbitrary, and unreasonable, and outside the scope of the TCEQ's statutory

                 authority.

            c. The Order is invalid because the remedy selected does not comply with the

                 standards found in Texas Health & Safety Code § 361.193 and .322(h). Section

                 361.193 states that the TCEQ is required to select the "lowest cost alternative that

                 is technologically feasible and reliable and that effectively mitigates and

                 minimizes damage to and provides adequate protection of the public health and

                 safety or the environment."   TEX. HEAL TH   & SAFETY CODE § 361.193.

                     1.   The TCEQ has classified the groundwater at the Site to be Class I

                          groundwater, when in fact it should be Class II. If the proper classification

                          had been used by the TCEQ, the appropriate remedy for this Site would

                          very likely have been the lowest cost alternative that is technologically

                          feasible and reliable and that effectively mitigates and minimizes damage

                          to and provides adequate protection of the public health and safety or the

                          environment. The most recent data acquired from the Site indicates that

                          an alternative remedy would be appropriate because the groundwater

                          plume boundary has not grown and the concentrations of the constituents

                          of concern identified by the TCEQ have actually decreased over time.

Plaintiff's First Amended Petition
                                                                                                Page 17
A-230571 4.DOC                                                                                            20
                    11.   Effective on May 25, 2007, the Municipal Settings Designation ("MSD")

                          statute was amended to allow small municipalities to have the benefit of

                          the MSD certification. The MSD statute allows municipalities to enforce

                          specific deed restrictions on properties within their city limits restricting

                          the use of the groundwater beneath the property so that it cannot be used

                          as drinking water. The deed restriction acts as an institutional control to

                          protect human health, but at a fraction of the costs of a groundwater

                          remediation plan. The Site is within the City of Clarksville and thus is

                          potentially eligible for an MSD. The MSD is recognized by statute to be

                          protective of human health and the environment. No statute or regulation

                          prohibits the application of an MSD at a state Superfund Site.           The

                          Feasibility Study was issued in January of 2008 and the Remedy Selection

                          Document was issued in June 2008. Neither document even evaluated the

                          MSD option, which at that point in time was certainly available for

                          consideration and which could very well be the lowest cost remedy for

                          groundwater at the Site.    Thus, the TCEQ's Order is invalid in that it

                          selects a remedy that is arbitrary and unreasonable and therefore cannot be

                          upheld pursuant to Texas Health and Safety Code§ 361.323(h).

            d. Plaintiffs have asserted previously in this Petition that the Order violates certain

                 of the Plaintiffs' constitutional equal protection rights because the TCEQ relieved

                 certain PRPs, but not others similarly situated, from liability based on the

                 "petroleum exclusion." Without waiving that argument, Plaintiffs alternatively

                 assert that, if the released PRPs are not entitled to the petroleum exclusion, those

                 PRPs must be named in the Order as an RP and that TCEQ's failure to do so is

                 arbitrary and capricious to the severe detriment of Plaintiffs. Section 361.188
Plaintiff's First Amended Petition
                                                                                                Page 18
A-230571 4.DOC                                                                                            21
                 (a)(4) and (6) of the Texas Health & Safety Code states that that final

                 administrative order must list the Responsible Parties and order the Responsible

                 Parties to remediate the facility and reimburse the TCEQ's RI/FS costs. Nothing

                 in that statutory provision allows the TCEQ to ignore certain otherwise

                 Responsible Parties.     In fact, § 361.1875 states exactly when the TCEQ can

                 exclude certain PRPs from liability associated with a Site, and none of the

                 particular exclusions apply here. The Order is invalid for failure to name all RPs.

              e. The TCEQ's unilateral order of the payment of stipulated penalties is beyond the

                 authority of the TCEQ.

        53.      The Order is invalid under § 361.188(a)(l) because it does not present an

imminent and substantial endangerment as needed to support listing on the State Superfund

Registry. There is no evidence of imminent and substantial endangerment. Any imminent and

substantial endangerment was abated by the 1996 EPA' s removal action.

        54.      The Order should be deemed invalid as to Plaintiffs because the TCEQ did not

otherwise properly carry out its statutory and regulatory duties to fully investigate and identify

PRPs, RPs, and de minimis parties prior to naming Plaintiffs as RPs.

        55.      For all of the reasons previously stated in this Petition, the Order is invalid,

arbitrary, and unreasonable pursuant to Texas Health & Safety Code§ 361.32l(e).

                                             VII.
                                     AFFIRMATIVE DEFENSES

        56.      Certain Plaintiffs contributed materials to the Site that are the same as those

materials contributed by entities that have been released by the TCEQ pursuant to the "Petroleum

Exclusion" and thus are also entitled to such a release.

Plaintiff's First Amended Petition
                                                                                              Page 19
A-230571 4.DOC                                                                                          22
        57.      Even if Plaintiffs had contributed any materials to the Site, those materials were

sold as a useful product, and did not constitute an arrangement for the processing, storing, or

disposal of a solid waste, and did not contribute to the release or threatened release to the

environment.

        58.      Westland Oil's unused lube oil was a petroleum material and a valuable

commercial product intended to be dehydrated by Yoda and sold, and/or returned to Westland

for sale to its customers, and thus the oil was neither a "solid waste" nor a "hazardous

substance."

        59.      ExxonMobil discharged all or part of any Yoda site responsibility through its

settlement with and payments to EPA Further, the Mobil paraffin was handled at a specific

area of the Yoda site and was addressed by the EPA removal action. Any harm or liability

attributable to Exxon Mobil or Mobil is therefore capable of being apportioned.

        60.      Plaintiffs' materials, to the extent any were sent to Yoda, are distinct from those

chemicals causing the harm that is being addressed under TCEQ's AO. Therefore, any liability

of Plaintiffs' must be apportioned and limited to the harm attributable to their materials at the

Yoda site.

        61.      Plaintiffs did not intend for waste or hazardous substances to be disposed of at the

Site.

        62.      Plaintiffs assert that they are not RPs, but in the alternative assert they are no

more than a de minimis contributor to any contamination at the Site.

        63.      Plaintiffs are not liable for remedial actions or costs associated with the Southwest

Tank Farm, also known as Ultra Oil.

Plaintiff's First Amended Petition
                                                                                               Page 20
A-230571 4.DOC                                                                                           23
        64.      The evidence demonstrates that the Site does not pose an imminent and

substantial endangerment.

        65.      The TCEQ failed to provide the required notices necessary to support recovery of

investigation costs from the PRPs.

        66.      The facts do not support listing the Site on the State Superfund registry or the use

of the Texas Solid Waste Disposal Act to impose liability upon Plaintiffs.

        67.      In the alternative, even if Plaintiffs contributed solid waste or hazardous

substances to the Site, the costs are subject to apportionment under the Texas Health and Safety

Code§ 361.276.

                                                VIII.
                                     COSTS AND ATTORNEYS FEES

        68.      Plaintiffs have had to employ legal counsel to contest the Order. TCEQ is liable

for Plaintiffs' reasonable attorney's fees and reasonable costs pursuant to the TUDJA and Texas

Health & Safety Code§ 361.342.

                                                    IX.
                                            JURY DEMAND

        69.      Plaintiffs request a jury as the trier of fact for this matter.

                                                     x.
                                                PRAYER

        70.      WHEREFORE, Plaintiffs pray that the TCEQ be cited to appear and answer and

that the TCEQ be required to prove its allegations against Plaintiffs by a preponderance of the

evidence and that the Court on final trial enter an order:

        a.       Declaring that the TCEQ's Administrative Order lacks finality, is of no legal

                 effect, and is not enforceable; and/or

Plaintiff's First Amended Petition
                                                                                              Page 21
A-230571 4.DOC                                                                                          24
        b.       Declaring that the TCEQ's Administrative Order violates the due process laws

                 and/or equal protection laws of the United States and Texas Constitutions and is

                 therefore invalid, and not enforceable; and/or

        c.       Declaring that the TCEQ's Administrative Order is ultra vires, and is therefore

                 invalid, of no legal effect, and is not enforceable; and/or

        d.       Declaring that the TCEQ's Administrative Order is invalid, arbitrary, or

                 unreasonable and therefore must be overturned pursuant to Texas Health & Safety

                 Code§ 361.32l(e).

        71.      AL TERNATIVEL Y, the Plaintiffs pray that the Court enter an order that:

        a.       Invalidates the portion of the TCEQ's Order that purports to establish Plaintiffs as

                 PRPs or RPs; and

        b.       Declares that Plaintiffs are not responsible parties m any way liable for the

                 environmental conditions existing at the Site or responsible for any response

                 costs.

        72.      ALTERNATIVELY, the Plaintiffs pray that the Court enter an order:

          a.     Declaring that any Westland Oil/Specialty Oil's (now Pennzoil-Quaker State

                 Company) materials sent to Yoda are not hazardous substances or solid waste;

         b.      Declaring that Plaintiffs are not liable under TSWDA for activities of any

                 independent gasoline station operator who may have sent material to Voda;

          c.     Declaring that any Mobil Oil Corporation materials sent to Yoda are not

                 hazardous substances or solid waste;

Plaintiff's First Amended Petition
                                                                                              Page 22
A-230571 4.DOC                                                                                          25
         d.      Declaring that any ExxonMobil responsibility for the Yoda Site has been

                 discharged by virtue of its settlement with EPA, or reduced by the amount of its

                 payment to EPA;

          e.     Declaring that any harms or liability attributable to Plaintiffs can and must be

                 apportioned on the basis of geography and chemistry or otherwise.

        73.      ALTERNATIVELY, Plaintiffs pray that the Court enter an Order that:

         a.      Pursuant to the Texas Health and Safety Code, Plaintiffs are de minimis parties

                 and their equitable and legal responsibility for those costs should not exceed a

                 nominal share.

        74.      Plaintiffs further pray for reasonable attorney's fees and reasonable costs pursuant

to Texas Civil Practice and Remedies Code § 37.009 and Texas Health & Safety Code

§ 361.342, and for any other relief Plaintiffs may show themselves to be justly entitled.

Plaintiff's First Amended Petition
                                                                                              Page 23
A-230571 4.DOC                                                                                          26
                                     Respectfully submitted,

                                     HAYNES AND BOONE, LLP

                                     /s/ Adam H. Sencenbaugh
                                     John R. Eldridge
                                     State Bar No. 06513520
                                     HAYNES AND BOONE, L.L.P.
                                     1221 McKinney Street, Suite 2100
                                     Houston, Texas 77010
                                     Telephone:     (713) 547-2000
                                     Telecopier:    (713) 547-2600

                                     Adam H. Sencenbaugh
                                     State Bar No. 24060584
                                     HAYNES AND BOONE, L.L.P.
                                     600 Congress Avenue, Suite 1300
                                     Austin, TX 78701
                                     Telephone:     (512) 867-8489
                                     Telecopier:    (512) 867-8606

                                     Attorneys for Plaintiffs

Plaintiff's First Amended Petition
                                                                        Page 24
A-230571 4.DOC                                                                    27
                     APP. D

 Texas Commission on Environmental Quality’s
Original Counter-Petition and Third-Party Petition
           and Request for Disclosure
                 (CR:127-169)
                                                                               Filed
                                                                               11 August 1 A11 :45
                                                                               Amalia Rodriguez-Mendoza
                                                                               District Clerk
                                                                               Travis District
                                                                               D-1-GN-10-000772
                              CAUSE NO. D-1-GN-10-000772

YOUNG CHEVROLET, INC., et al.,                §            IN THE DISTRICT COURT OF
             Plaintiffs,                      §
                                              §
v.                                            §
                                              §
TEXAS COMMISSION ON                           §
ENVIRONMENTAL QUALITY, et al.,                §                TRAVIS COUNTY, TEXAS
              Defendants,                     §
                                              §
v.                                            §
                                              §
YOUNG CHEVROLET, INC., et al.,                §
    Counter- and Third-Party                  §                345th JUDICIAL DISTRICT
    Defendants                                §

              TEXAS COMMISSION ON ENVIRONMENT AL QUALITY'S
            ORIGINAL COUNTER-PETITION AND THIRD-PARTY PETITION
                       AND REQUEST FOR DISCLOSURE

TO THE HONORABLE JUDGE OF SAID COURT:

     COMES NOW the Texas Commission on Environmental Quality ("TCEQ"), an

agency of the State of Texas, by and through Greg Abbott, Attorney General of Texas,

files this Original Counter-Petition and Third-Party Petition, and would respectfully

show the Court as follows:

                                     1.   DISCOVERY

     1.1.    No Discovery Control Plan having been filed, pursuant to TEX. R. Crv. P.

190.3 discovery will be conducted under Level 2.

                                                                                             127
                                         2.   PARTIES

A. Counter-Plaintiff

        2.1.   Counter-Plaintiff the Texas Commission on Environmental Quality ("TCEQ")

is the agency of the State of Texas responsible for administering the Texas Solid Waste

Disposal Act, TEX. HEALTH & SAFETY CODE§ 361.001 et seq. (Vernon 2010) (hereinafter

"TSWDA" or "the Act").

B. Counter-Defendants

        (The Plaintiffs in AAMCO Transmissions, Inc., et al., v. Texas Commission on Environ-

mental Quality, et al.; Cause No. D-1-GN-10-000778)

        2.2.   Counter-Defendant AAMCO Transmissions, Inc., is a corporation duly

organized under the laws of the State of Pennsylvania. No service is necessary at this

time.

        2.3. Counter-Defendant ACF Industries, LLC, as former parent company and

indemnitor for Shippers Car Line, Inc., (now part of American Railcar Industries) is a

limited liability company in Missouri. No service is necessary at this time.

        2.4.   Counter-Defendant AEP Texas Central Company, f/k/a Central Power and

Light Company, is a corporation duly organized in the State of Texas. No service is

necessary at this time.

        2.5.   Counter-Defendant Allied Motion Technologies, Inc., as successor to Snow

                                                2

                                                                                                128
Coil, is a corporation duly organized in the State of Colorado. No service is necessary at

this time.

     2.6.    Counter-Defendant Allied Waste Systems Holdings, Inc., successor to

Southwest Disposal, is a corporation duly organized in the State of Delaware. No

service is necessary at this time.

     2.7.    Counter-Defendant American Airlines, Inc., is a corporation duly organized

in the State of Delaware. No service is necessary at this time.

     2.8.    Counter-Defendant American Marazzi Tile, Inc., is a corporation duly

organized in the State of Texas. No service is necessary at this time.

     2.9.    Counter-Defendant Arkema, Inc., f/k/a Pennwalt Corporation, is a corpora-

tion duly organized in the Commonwealth of Pennsylvania. No service is necessary at

this time.

     2.10.    Counter-Defendant Atlantic Richfield Company, on behalf of ARCO Oil and

Gas Corporation, is a corporation duly organized in the State of Delaware. No service is

necessary at this time.

     2.11.    Counter-Defendant BE&K, Inc., is a corporation duly organized in the State

of Delaware. No service is necessary at this time.

     2.12.    Counter-Defendant Basil Oilfield Services, Inc., is a corporation duly

organized in the State of Texas. No service is necessary at this time.

                                              3

                                                                                             129
     2.13.   Counter-Defendant Bayou State Oil Corporation is a corporation duly

organized in the State of Louisiana. No service is necessary at this time.

     2.14.   Counter-Defendant Ben E. Keith Company is a corporation duly organized

in the State of Texas. No service is necessary at this time.

     2.15.   Counter-Defendant Bottling Group LLC, d/b/a Pepsi Beverages Company,

f/k/a Pepsi Cola, is a limited liability company duly organized in the State of Delaware.

No service is necessary at this time.

     2.16.   Counter-Defendant BP Products North America, Inc., on behalf of Truck

Stops of America, is a corporation duly organized in the State of Maryland. No service

is necessary at this time.

     2.17.   Counter-Defendant Bridgestone Americas Tire Operations, LLC, on behalf

of The Firestone Tire and Rubber Company, Modern Tire Service, Inc., (Bridgestone

Bandag), and John Crawford Firestone, Inc., is a limited liability corporation duly

organized in the State of Delaware. No service is necessary at this time.

     2.18.   Counter-Defendant Bright Truck Leasing, LLC, for Bright Truck Leasing

Corporation - Bright Truck Leasing, is a limited liability company duly organized in the

State of Texas. No service is necessary at this time.

     2.19.   Counter-Defendant Brilliant National Services, Inc., as indemnitor of

Brenntag Southwest, Inc., successor by merger to Delta Distributors, Inc., Delta Sol-

                                              4

                                                                                            130
vents, Inc., and Coastal Chemical, LLC, successor by merger to Harris Bros. Company,

is a corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.20.   Counter-Defendant Kellogg Brown & Root LLC, successor in interest to

Brown & Root, Inc., is a limited liability company duly organized in the State of

Delaware. No service is necessary at this time.

        2.21.   Counter-Defendant Burland Enterprises, Inc., is a corporation duly orga-

nized in the State of Texas. No service is necessary at this time.

        2.22.   Counter-Defendant Cabot Corporation is a corporation duly organized in

the State of Delaware. No service is necessary at this time.

        2.23.   Counter-Defendant Capacity of Texas, Inc., is a corporation duly organized

in the State of Texas. No service is necessary at this time.

        2.24.   Counter-Defendant Carrier Corporation, a/k/a Carrier Air Conditioning, is a

corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.25.   Counter-Defendant Cascade Die Casting Group, Inc., for its former division

J&E Die Casting Company, is a corporation duly organized in the State of Michigan. No

service is necessary at this time.

        2.26.   Counter-Defendant Centex Homes, d/b/a Fox and Jacobs Homes, is a

                                               5

                                                                                              131
general partnership duly organized under the laws of the State of Nevada. No service is

necessary at this time.

     2.27.   Counter-Defendant Herrick Pacific Corporation, successor by merger to

Central Texas Iron Works, is a corporation duly organized in the State of California. It

may be served with citation by serving its agent, Harry Kluck, at 1100 Winchell Drive,

Waco, Texas 76712.

     2.28.   Counter-Defendant Chaparral Steel Company (a wholly owned subsidiary

of Gerdau Ameristeel) is a corporation duly organized in the State of Delaware. No

service is necessary at this time.

     2.29.   Counter-Defendant CITGO Pipeline Company, by indemnitor OXY USA,

Inc., on behalf of Cities Service Pipe Line Company, is a corporation duly organized in

the State of Delaware. No service is necessary at this time.

     2.30.   Counter-Defendant City Motor Supply, Inc., is a Sub S corporation duly

organized in the State of Texas. No service is necessary at this time.

     2.31.   Counter-Defendant City of Dallas is a home-rule municipal corporation

duly organized in the State of Texas. No service is necessary at this time.

     2.32.   Counter-Defendant City of Jefferson is a home-rule municipal corporation

duly organized in the State of Texas. No service is necessary at this time.

     2.33.   Counter-Defendant City of Plano is a home-rule municipal corporation duly

                                             6

                                                                                           132
organized in the State of Texas. No service is necessary at this time.

        2.34.   Counter-Defendant City of Rockwall is a home-rule municipal corporation

duly organized in the State of Texas. No service is necessary at this time.

        2.35.   Counter-Defendant City of University Park is a home-rule municipal

corporation duly organized in the State of Texas. No service is necessary at this time.

        2.36.   Counter-Defendant Colgate-Palmolive Company, for CPL Industries, is a

corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.37.   Counter-Defendant ConocoPhillips Company, on behalf of Kayo Oil

Company, is a corporation duly organized in the State of Delaware. No service is

necessary at this time.

        2.38.   Counter-Defendant Crown Cork & Seal USA, Inc., on behalf of Continental

Can Company USA, Inc., is a corporation duly organized in the State of Delaware. No

service is necessary at this time.

        2.39.   Counter-Defendant Custom-Bilt Cabinets & Supply, Inc., is a corporation

duly organized in the State of Louisiana. No service is necessary at this time.

        2.40.   Counter-Defendant Dallas Area Rapid Transit is a regional transportation

authority created and operating under Chapter 452 of the Texas Transportation Code.

No service is necessary at this time.

                                              7

                                                                                           133
     2.41.   Counter-Defendant Dunlap-Swain Tire Company, Inc., is a corporation duly

organized in the State of Texas. No service is necessary at this time.

     2.42.   Counter-Defendant Durham School Services L.P., successor to Durham

Transportation, Inc., is a limited partnership duly organized in the State of Delaware.

No service is necessary at this time.

     2.43.   Counter-Defendant Freeman Decorating Services, Inc., f/k/a Sullivan

Transfer Company (successor by merger), for Sullivan Transfer & Storage, is a corpora-

tion duly organized in the State of Texas. No service is necessary at this time.

     2.44.   Counter-Defendant Fru-Con Construction Corporation, f/k/a Fruin-Colnon

Corporation, is a corporation duly organized in the State of Missouri. No service is

necessary at this time.

     2.45.   Counter-Defendant General Electric Company, acting through its Energy

Division, is a corporation duly organized in the State of New York. No service is

necessary at this time.

     2.46.   Counter-Defendant Georgia-Pacific LLC, f/k/a Georgia-Pacific Corporation,

is a limited liability company duly organized in the State of Delaware. No service is

necessary at this time.

     2.47.   Counter-Defendant Gifford Hill Cement & Gifford Hill Ready Mix, n/k/a

Hanson Aggregates LLC, is a limited liability company duly organized in the State of

                                             8

                                                                                          134
Delaware. No service is necessary at this time.

        2.48.   Counter-Defendant Gulf South Pipeline Company LP, successor to United

Gas Pipeline Company, is a limited partnership duly organized in the State of Delaware.

No service is necessary at this time.

        2.49.   Counter-Defendant Halliburton Energy Services, Inc., on behalf of itself and

as successor to Axelson, Inc., is a corporation duly organized in the State of Delaware.

No service is necessary at this time.

        2.50.   Counter-Defendant Harland Clarke Corp., f/k/a Clarke Checks, Inc., is a

corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.51.   Counter-Defendant Hexion Specialty Chemicals, Inc., successor in interest

to Borden, and f/k/a Borden, Inc., and/or Borden Chemical, Inc., is a corporation duly

organized in the State of New Jersey. No service is necessary at this time.

        2.52.   Counter-Defendant Holloway Welding & Piping GP, General Partner of

Holloway Welding & Piping LP, is a corporation duly organized in the State of Texas.

No service is necessary at this time.

        2.53.   Counter-Defendant Hunt Oil Company is a corporation duly organized in

the State of Delaware. No service is necessary at this time.

        2.54.   Counter-Defendant Industrial Solvents Corporation, for Industrial Solvents

                                               9

                                                                                               135
Gulf Division of Industrial Solvents Corporation, a previously used assumed name for

Industrial Solvents Corporation, is a corporation duly organized in the State of New

York. No service is necessary at this time.

        2.55.   Counter-Defendant Ingersoll-Rand Company is a corporation duly orga-

nized in the State of New Jersey. No service is necessary at this time.

        2.56.   Counter-Defendant International Paper Company, for itself, Champion

Paper and Champion International Corporation, is a corporation duly organized in the

State of New York. No service is necessary at this time.

        2.57.   Counter-Defendant Johns Manville, Inc., f/k/a Manville Sales Corporation, is

a corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.58.   Counter-Defendant Johnson Controls Battery Group, Inc., for Johnson

Controls, Inc., is a corporation duly organized in the State of Wisconsin. No service is

necessary at this time.

        2.59.   Counter-Defendant Jones Environmental, Inc., is a corporation duly

organized in the State of Louisiana. No service is necessary at this time.

        2.60.   Counter-Defendant Joy Technologies, Inc., for Joy Manufacturing Com-

pany, is a corporation duly organized in the State of Delaware. No service is necessary

at this time.

                                               10

                                                                                               136
        2.61.   Counter-Defendant Las Colinas Holding Corporation, successor by merger

to Las Colinas Service Center, Inc., is a corporation duly organized in the State of

Delaware. No service is necessary at this time.

        2.62.   Counter-Defendant Sun Engine & Transmission Sales, Inc., is a corporation

duly organized in the State of Texas and may be served by serving its agent, CT Corp.

System, at 350 N. Saint Paul St., Ste. 2900, Dallas TX 75201-4234.

        2.63.   Counter-Defendant Luvata Grenada LLC and Luvata Astro LLC, as

successors to Snow Coil, Inc., are corporations duly organized in the State of Delaware.

No service is necessary at this time.

        2.64.   Counter-Defendant M. Lipsitz & Co., Ltd., is a limited partnership duly

organized in the State of Texas. No service is necessary at this time.

        2.65.   Counter-Defendant Marathon Norco Aerospace, Inc., for Marathon Battery

Company, is a corporation duly organized in the State of Delaware. No service is

necessary at this time.

        2.66.   Counter-Defendant Melton Truck Lines, Inc., is an corporation duly

organized in the State of Oklahoma. No service is necessary at this time.

        2.67.   Counter-Defendant Metal Services, Inc., n/k/a Berns Metals Southwest, Inc.,

is a corporation duly organized in the State of Texas. No service is necessary at this

time.

                                               11

                                                                                              137
        2.68.   Counter-Defendant Metro Aviation, Inc., is a corporation duly organized in

the State of Louisiana. No service is necessary at this time.

        2.69.   Counter-Defendant Nabors Well Services Co., successor to Pool Company,

is a corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.70.   Counter-Defendant National Oilwell Varco, L.P., for itself and Martin-

Decker, is a limited partnership duly organized in the State of Delaware. No service is

necessary at this time.

        2.71.   Counter-Defendant NCH Corporation, and its division Mohawk Laborato-

ries, is a corporation duly organized in the State of Delaware. No service is necessary at

this time.

        2.72.   Counter-Defendant E & R Noble, Inc., f/k/a Nobles Transmission, is a

corporation duly organized in the State of Texas. No service is necessary at this time.

        2.73.   Counter-Defendant Nucor Corporation is a corporation duly organized in

the State of Delaware. No service is necessary at this time.

        2.74.   Counter-Defendants Occidental Chemical Corporation and Oxy USA, Inc.,

for themselves and Cities Service Company, Cities Service Pipe Line Company, and Oxy

Cities Service NGL, Inc., are corporations duly organized in the States of New York and

Delaware, respectively. No service is necessary at this time.

                                               12

                                                                                             138
        2.75.   Counter-Defendant Oil States Industries, Inc., as successor in interest to LTV

Energy Products, Inc., is a corporation duly organized in the State of Delaware. No

service is necessary at this time.

        2.76.   Counter-Defendant Oldcastle APG Texas, Inc., d/b/a Custom-Crete, for

Custom-Crete, Inc., is a corporation duly organized in the State of Texas. No service is

necessary at this time.

        2.77.   Counter-Defendant Paccar, Inc., d/b/a Peterbilt Motors Co., is a corporation

duly organized in the State of Delaware. No service is necessary at this time.

        2.78.   Counter-Defendant Paramount Packaging Corporation (n/k/a Milprint, Inc.)

is a corporation duly organized in the State of Wisconsin. No service is necessary at this

time.

        2.79.   Counter-Defendant Pengo Industries, Inc., is a corporation duly organized

in the State of Texas. No service is necessary at this time.

        2.80.   Counter-Defendant Penske Truck Leasing Co., L.P., successor to [Hertz]

Penske Truck Leasing, Inc., and Gelco Truck Leasing Division, Gelco Corporation, is a

limited partnership duly organized in the State of Delaware. No service is necessary at

this time.

        2.81.   Counter-Defendant Performance Friction Products, f/k/a Coltec Automotive

Products, a division of Coltec Industries, Inc., is a corporation duly organized in the

                                                13

                                                                                                 139
State of Pennsylvania. No service is necessary at this time.

     2.82.   Counter-Defendant Post, Buckley, Schuh & Jernigan, Inc., d/b/a PBS&J,

successor in interest to Espey Huston, is a corporation duly organized in the State of

Florida. No service is necessary at this time.

     2.83.   Counter-Defendant Rayco Oil Company is a sole proprietorship located at

4914 Augusta Circle, College Station, TX 77845. No service is necessary at this time.

     2.84.   Counter-Defendant Reeves Oil Co., Inc., is a corporation duly organized in

the State of Texas. No service is necessary at this time.

     2.85.   Counter-Defendant Regents of New Mexico State University, d/b/a Colum-

bia Scientific Balloon Facility, on behalf of National Scientific Balloon Facility, is a

constitutionally-created institution of higher education duly organized in the State of

New Mexico. No service is necessary at this time.

     2.86.   Counter-Defendant Rollins Leasing L.L.C., for Rollins Leasing Corp., is a

limited liability company, duly organized in the State of Delaware. No service is

necessary at this time.

     2.87.   Counter-Defendant Royle Container is a sole proprietorship duly organized

in the State of Texas. No service is necessary at this time.

     2.88.   Counter-Defendant Ruan Logistics Corporation, f/k/a Ruan Truck Leasing/

Ruan Leasing Company, is a corporation duly organized in the State of Iowa. No

                                               14

                                                                                           140
service is necessary at this time.

        2.89.   Counter-Defendant Ryder Truck Rental, Inc., is a corporation duly orga-

nized in the State of Florida. No service is necessary at this time.

        2.90.   Counter-Defendant Schlumberger Technology Corporation, on behalf of

Schlumberger Well Services Division of Schlumberger Technology Corporation and

Dowell Schlumberger Incorporated, is a corporation duly organized in the State of

Texas. No service is necessary at this time.

        2.91.   Counter-Defendant Sears, Roebuck & Co. is a corporation duly organized in

the State of New York. No service is necessary at this time.

        2.92.   Counter-Defendant Sigmor Corporation, for Diamond Shamrock, is a

corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.93.   Counter-Defendant Sitton Oil and Marine Company, Inc., for Sitton Oil, is a

corporation duly organized in the State of Texas. No service is necessary at this time.

        2.94.   Counter-Defendant Southern Foods Group, LLC, for Schepps Dairy, an

unincorporated division of Southern Foods Group, LLC, is a limited liability company

duly organized in the State of Delaware. No service is necessary at this time.

        2.95.   Counter-Defendant Southwestern Bell Telephone Company, d/b/a AT&T

Texas, is a corporation duly organized in the State of Missouri. No service is necessary

                                               15

                                                                                              141
at this time.

     2.96.      Counter-Defendant Southwestern Electric Power Company is a corporation

duly organized in the State of Delaware. No service is necessary at this time.

     2.97.      Counter-Defendant Stemco LP is a limited partnership duly organized in

the State of Texas. No service is necessary at this time.

     2.98.      T.E.C. Well Service, Inc., is a corporation duly organized in the State of

Texas. No service is necessary at this time.

     2.99.      Counter-Defendant Texas Gas Transmission, LLC, for Texas Gas Transmis-

sion Corporation, is a limited liability company duly organized in the State of Delaware.

No service is necessary at this time.

     2.100.      Counter-Defendant Texas Health Presbyterian Hospital Dallas, f/k/a

Presbyterian Hospital of Dallas, is a non-profit corporation duly organized in the State

of Texas. No service is necessary at this time.

     2.101.      Counter-Defendant Texas Industries, Inc. (TXI) is a corporation duly

organized in the State of Delaware. No service is necessary at this time.

     2.102.      Counter-Defendant The Lubrizol Corporation is a corporation duly

organized in the State of Ohio. No service is necessary at this time.

     2.103.      Counter-Defendant TIN, Inc., d/b/a Temple-Inland and f/n/a Inland

Container Corp., is a corporation duly organized in the State of Delaware. No service is

                                                16

                                                                                             142
necessary at this time.

        2.104.   Counter-Defendant Trinity Industries, Inc., is a corporation duly organized

in the State of Delaware. No service is necessary at this time.

        2.105.   Counter-Defendant United States Steel Corporation (and its subsidiaries),

for Oilwell Division of United States Steel Corporation and Lone Star Logistics, Inc., is a

corporation duly organized in the State of Delaware. No service is necessary at this

time.

        2.106.   Counter-Defendant VHC, Inc., f/k/a Varo, Inc., is a corporation duly

organized in the State of Texas. No service is necessary at this time.

        2.107.   Counter-Defendant Viking Freight Service, Inc., is a corporation duly

organized in the State of Texas. No service is necessary at this time.

        2.108.   Counter-Defendant Waste Management of Texas, Inc., for Texas Industrial

Disposal, Inc., is a corporation duly organized in the State of Texas. No service is

necessary at this time.

        2.109.   Counter-Defendant Weatherford Artificial Lift Systems, Inc., as successor

in interest to The Highland Pump Company, is a corporation duly organized in the

State of Delaware. No service is necessary at this time.

        2.110.   Counter-Defendant Wells Fargo Bank, N.A., successor in interest by

merger to First Interstate Bank of Dallas, is a national banking association doing

                                               17

                                                                                               143
business in various locations in Texas. No service is necessary at this time.

     2.111.   Counter-Defendant Weyerhaeuser Company, as successor in interest by

merger to Willamette Industries, Inc., and MacMillan Bloedel Containers, is a corpora-

tion duly organized in the State of Washington. No service is necessary at this time.

     2.112.   Counter-Defendant Wilson Industries, L.P., for Texas Mill Supply-

Longview Inc., is a limited partnership duly organized in the State of Texas. No service

is necessary at this time.

     2.113.   Counter-Defendant Wilsonart International, Inc., f/k/a Ralph Wilson

Plastics Company, is a corporation duly organized in the State of Delaware. No service

is necessary at this time.

     2.114.   Counter-Defendant Woods Operating Co., Inc., is a corporation duly

organized in the State of Louisiana. No service is necessary at this time.

     2.115.   Counter-Defendant YRC, Inc., f/k/a Roadway Express, Inc., is a corporation

duly organized in the State of Delaware. No service is necessary at this time.

     2.116.   Counter-Defendant 7-Eleven, Inc., f/k/a The Southland Corporation, for its

subsidiary Southland Sales Corporation, is a corporation duly organized in the State of

Texas. No service is necessary at this time.

     (The Plaintiffs in Chevron USA Inc., et al., v. Texas Commission on Environmental

Quality, et al.; No. D-1-GN-10-000793, as follows:)

                                               18

                                                                                           144
     2.117.   Counter-Defendant Texaco, Inc., a Delaware corporation, is successor to

Texaco Chemical Company and is a subsidiary of Chevron USA Inc., a Pennsylvania

Corporation. No service is necessary at this time.

     2.118.   Counter-Defendant Warren Petroleum Company is a former subsidiary of

Chevron USA Inc., a Pennsylvania corporation. No service is necessary at this time.

     2.119.   Counter-Defendant Chevron USA, Inc., is a corporation duly organized in

the State of Pennsylvania. No service is necessary at this time.

     2.120.   Counter-Defendant Mobil Oil Corporation, a New York corporation, is a

subsidiary of Exxon Mobil Corporation, a New Jersey corporation. No service is

necessary at this time.

     2.121.   Counter-Defendant Pennzoil-Quaker State Company, a Delaware corpora-

tion, is a successor by merger to Westland Oil Company, Inc., Specialty Oil Company,

Inc., and Industrial Lubricants Co. No service is necessary at this time.

     2.122.   Counter-Defendant Shell Oil Company is a Delaware corporation. No

service is necessary at this time.

     (All the other Plaintiffs who appealed the Order, as follows:)

     2.123.   Counter-Defendant Ark-La-Tex Waste Oil Co., Inc., is a corporation duly

organized in the State of Louisiana. No service is necessary at this time.

     2.124.   Counter-Defendant ARAMARK Uniform & Career Apparel, LLC, is a

                                                19

                                                                                        145
limited liability company duly organized in the State of Delaware. No service is

necessary at this time.

     2.125.   Counter-Defendant Alcatel-Lucent USA, Inc., is a corporation duly

organized in the State of Delaware. No service is necessary at this time.

     2.126.   Counter-Defendant The Sabine Mining Company is a corporation duly

organized in the State of Nevada. No service is necessary at this time.

     2.127.   Counter-Defendant Southwestern Petroleum Corporation is a corporation

duly organized in the State of Texas. No service is necessary at this time.

     2.128.   Counter-Defendant Luminant Generation Company, LLC, successor to

Texas Utilities Generating Company and Dallas Power & Light Company, is a corpora-

tion duly organized in the State of Texas. No service is necessary at this time.

     2.129.   Counter-Defendant Air Liquide America LP, on behalf of Big Three

Industrial Gas, Inc., is a corporation duly organized in the State of Delaware. No service

is necessary at this time.

     2.130.   Counter-Defendant Young Chevrolet, Inc., is a corporation duly organized

in the State of Texas. No service is necessary at this time.

C. Third-party Defendants Named in the Order

     (All persons or entities named in the Order, believed to be viable, are listed here or in

subsec. E, below.)

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     2.131.   Third-party Defendant Norit Americas, Inc., successor to American Norit

Company, Inc., is a corporation duly organized in the State of Georgia and may be

served by serving its agent, CT Corp. System, at 350 N. Saint Paul St., Ste. 2900, Dallas

TX 75201-4234.

     2.132.   Third-party Defendant Baxter Oil Service is a sole proprietorship and may

be served by serving its owner, Sam L. Baxter, at 5070 Irving St., Beaumont, Texas

77705-5231.

     2.133. Third-party Defendant Billy D. Cox Truck Leasing, Inc., is a corporation

duly organized in the State of Texas and may be served by serving its agent, Billy D.

Cox, at 10606 Goodnight Lane, Dallas TX 75220-2407.

     2.134.   Third-party Defendant Janet Blake, d/b/a D&D Radiator & Muffler, is an

individual who may be served at 7022 Bruton Rd., Dallas TX 75217-1240.

     2.135.   Third-party Defendant Central Transfer & Storage Company was a

corporation duly organized in the State of Texas. Its charter was forfeited in 2007. It

may be served by serving its agent, David F. Zalkovsky, at 11302 Ferndale Rd., Dallas

TX 75238-1020.

     2.136.   Third-party Defendant Channel Shipyard is a corporation duly organized

in the State of Texas and may be served by serving its agent, H. Dennis Steger, at 610 S.

Main, Highlands TX 77562-4205.

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     2.137.   Third-party Defendant City of Garland is a home-rule municipality in the

State of Texas and may be served at: City of Garland, Bill Dollar, City Manager, 200 N.

5th St., Garland TX 75040-6314.

     2.138.   Third-party Defendant Clements Oil Corporation is a corporation duly

organized in the State of Texas and may be served by serving its agent, Robert S.

Clements, at 202 2nd St., Atlanta TX 75551-1679.

     2.139.   Third-party Defendant Collin County is a governmental entity in the State

of Texas and may be served by serving: Keith Self, Collin County Judge, 2300

Bloomdale Rd., Ste. 4192, McKinney TX 75071-8517.

     2.140.   Third-party Defendant Willow Distributors, LP, successor to Coors

Distributor, is a limited partnership duly organized in the State of Texas and may be

served by serving its agent, Rick F. Rogers, at 800 N. Shoreline, Ste. 800 S., Corpus

Christi TX 78401-3765.

     2.141.   Third-party Defendant Dallas Dressed Beef Company, Inc., is a corporation

duly organized in the State of Texas and may be served by serving its agent, Jack

Hampton, at 1348 Conant Street, Dallas TX 75207-6006.

     2.142.   Third-party Defendant Davison Petroleum Products, LLC, is a limited

liability company duly organized in the State of Louisiana and may be served by

serving its agent, Mark E. Davison, at 3809 Skyline Dr., Plano TX 75025-2304.

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     2.143.   Third-party Defendant Delmar Disposal Company is a corporation duly

organized in the State of Delaware and may be served by serving its agent, Delmar R.

Ham, Jr., at 8508 CF Hawn Frwy., Dallas TX 75217-7013.

     2.144.   Third-party Defendant Dixie Oil Company is a sole proprietorship and

may be served by serving its owner, C.E. Burnham, at 8932 Highway 494, Little Rock

MS 39337-9296.

     2.145.   Third-party Defendant Fred Jordan, Inc., was a corporation duly organized

in the State of Texas, whose charter was forfeited in 1998. It may be served by serving its

agent, Billy Fred Jordan, at 1414 N. Munson Rd., Royse City TX 75189-5378.

     2.146.   Third-party Defendant Howard Freilich, d/b/a Quick Stop Brake &

Muffler, is an individual residing at 1815 Plymouth Rock Dr., Richardson TX 75081-

3942, where he may be served.

     2.147.   Third-party Defendant G.B. Boots Smith Corporation is a corporation duly

organized in the State of Delaware and may be served by serving its agent, Corporation

Service Company d/b/a CSC Lawyers Incorporating Service, at 211 E. 7th St., Ste. 620,

Austin TX 78701-3218.

     2.148.   Third-party Defendant GTE Southwest Incorporated, formerly General

Telephone Company of the Southwest, is a corporation duly organized in the State of

Delaware and may be served by serving its agent, CT Corp. System, at 350 N. Saint Paul

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St., Ste. 2900, Dallas TX 75201-4234.

     2.149.   Third-party Defendant Continental Tire the Americas, LLC, formerly

General Tire, Inc., is a limited liability company duly organized in the State of Ohio and

may be served by serving its agent, CT Corp. System, 350 N. Saint Paul St., Ste. 2900,

Dallas TX 75201-4234.

     2.150.   Third-party Defendant Greyhound Lines, Inc., is a corporation duly

organized in the State of Delaware and may be served by serving its agent, CT Corp.

System, at 350 N. Saint Paul St., Ste. 2900, Dallas TX 75201-4234.

     2.151.   Third-party Defendant Grubbs Enterprises, Ltd., is a limited partnership

duly organized in the State of Texas and may be served by serving its agent, Charles S.

Brown, at 4161 McKinney Ave., 4th Floor, Dallas TX 75204.

     2.152.   Third-party Defendant Hydraulic Service and Supply Company is a

corporation duly organized in the State of Texas and may be served by serving its

agent, Larry E. Spillers, at 100 Howell St., Dallas TX 75207-7104.

     2.153.   Third-party Defendant BAE Systems Resolution, Inc., f/k/a Stewart &

Stevenson Services, Inc., successor by merger to International Electric Corporation, is a

corporation duly organized in the State of Texas and may be served by serving its

agent, CT Corp. System, at 350 N. Saint Paul St., Ste. 2900, Dallas TX 75201-4234.

     2.154.   Third-party Defendant James Gentry, LLC, successor by merger to James

                                            24

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T. Gentry, Inc., is a limited liability company duly organized in the State of Nevada and

may be served by serving its agent, James T. Gentry, at 7842 Broadacres Rd., Shreveport

LA 71129-3806.

     2.155.   Third-party Defendant KSDR, Inc., was a corporation duly organized in

the State of Texas, whose charter was forfeited in 1995. It may be served by serving its

agent, Barry S. Brown, at 711 Navarro, Ste. 620, San Antonio TX 78205-1893.

     2.156.   Third-party Defendant Kelly's Truck Terminal, Inc., is a corporation duly

organized in the State of Louisiana and may be served by serving its agent, Richard

Rosenblum, at 910 Idaho St., Hammond LA 70401-1710.

     2.157.   Third-party Defendant Frank Kosar, d/b/a Rite Way Truck Rental, is an

individual residing at 2606 Cartwright St., Dallas TX 75212-4306, where he may be

served.

     2.158.   Third-party Defendant Lake Country Trucking, Inc., was a corporation

duly organized in the State of Texas, whose charter was forfeited in 1989.

     2.159.   Third-party Defendant Snyder's-Lance, Inc., formerly Lance, Inc., is a

corporation duly organized in the State of North Carolina and may be served by

serving its agent, Registered Agent Solutions, Inc., at 515 Congress Ave., Ste. 2300,

Austin TX 78701-3560.

     2.160.   Third-party Defendant The Goodyear Tire & Rubber Company, successor

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                                                                                            151
in interest to Long Mile Rubber Company, is a corporation duly organized in the State

of Ohio and may be served by serving its agent, Corporation Service Company d/b/a

CSC-Lawyers Incorporating Service Company, at 211 E. 7th St., Ste. 620, Austin TX

78701-3218.

     2.161.   Third-party Defendant Fargo Transport, Inc., f/k/a Davison Transport, Inc.,

successor by merger to Mathews Trucking Company, Inc., is a corporation duly

organized in the State of Louisiana and may be served by serving its agent, James E.

Davison, at 2000 Farmersville Hwy., Ruston LA 71270-3010.

     2.162.   Third-party Defendant Don C. McAlister, Inc., f/d/b/a McAlister Construc-

tion Company, is a corporation duly organized in the State of Texas and may be served

by serving its agent, Don C. McAlister, at 6822 Mossvine Cir., Dallas TX 75254-7952.

     2.163.   Third-party Defendant McDonald's is a corporation duly organized in the

State of Delaware and may be served by serving its agent, Prentice Hall Corp. System,

at 211 E. 7th St., Ste. 620, Austin TX 78701-3218.

     2.164.   Third-party Defendant Milagro Estates, Inc., f/k/a Mega Lubricants, Inc., is

a corporation duly organized in the State of Texas and may be served by serving its

agent, Lillian Trejo, at 15155 Jacintoport Blvd., Houston TX 77015-6530.

     2.165.   Third-party Defendant Troy L. Morgan Jr. is an individual residing at 783

Etheredge Rd., Longview TX 75602-7061, where he may be served.

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     2.166.   Third-party Defendant Murphy Brothers Service Center, Inc., is a corpora-

tion duly organized in the State of Louisiana and may be served by serving its agent,

Randall M. Murphy, at First and Hazel Streets, Arcadia LA 71001.

     2.167.   Third-party Defendant Deere & Company, successor in interest to Norwel

Equipment Company, is a corporation duly organized in the State of Delaware and may

be served by serving its agent, CT Corp. System, 350 N. Saint Paul St., Ste. 2900, Dallas

TX 75201-4234.

     2.168.   Third-party Defendant Von K. Oxendine, d/b/a/ Oxendine Transmission, is

an individual residing at 2319 N. Beckley Ave., Dallas TX 75208-2116, where he may be

served.

     2.169.   Third-party Defendant Parrott Oil Corp. is a corporation duly organized in

the State of Texas and may be served by serving its agent, G.N. Parrott, at 10207

Gardner Rd., Dallas TX 75220-4209.

     2.170.   Third-party Defendant Pearl Brewing, LLC, successor to Pearl Brewing

Company, is a limited liability company duly organized in the State of Texas and may

be served by serving its agent, Barbara J. Hruby, 121 Interpark Blvd., Ste. 300, San

Antonio TX 78216-1850.

     2.171.   Third-party Defendant Petroleum Distributors, Inc., was a corporation

duly organized in the State of Texas, whose charter was forfeited in 1998. It may be

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served by serving its agent, Stephen F. Holmsley, at 45 NE Loop 410, Ste. 580, San

Antonio TX 78216-5854.

     2.172.   Third-party Defendant Petroleum Stripping, Inc., is a corporation duly

organized in the State of Texas and may be served by serving its agent, Michael Otto,

Jr., at 19915 Pinehurst Trail Dr., Humble TX 77338-1732.

     2.173.   Third-party Defendant Hilite Industries, Inc., f/d/b/a Pitts, is a corporation

duly organized in the State of Delaware and may be served by serving the Texas

Secretary of State, for mailing to 50 Public Square, 32nd Floor, Cleveland OH 44113.

     2.174.   Third-party Defendant Prestige Ford Garland, LLC, successor in interest to

Prestige Ford Garland Limited Partnership, is a limited liability company duly orga-

nized in the State of Texas, and may be served by serving its agent, Gach Law Firm,

PLLC, 6000 Monroe Rd., Ste. 350, Charlotte NC 28212-1517.

     2.175.   Third-party Defendant C.S. Residential Management, Inc., f/k/a Preston

Management Company, is a corporation duly organized in the State of Texas and may

be served by serving its agent, H. Craig Evans, at 8214 Westchester Dr., Ste. 850, Dallas

TX 75225-6128.

     2.176.   Third-party Defendant R & K Auto Repair, Inc., is a corporation duly

organized in the State of Texas and may be served by serving its agent, Jose L. Rios, at

1835 Barnes Bridge Rd., Dallas TX 75228-2122.

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        2.177.   Third-party Defendant Vertis, Inc., successor in interest to Retail Graphics

Printing Company, is a corporation duly organized in the State of Delaware and may be

served by serving its agent, Corporation Service Company d/b/a CSC-Lawyers Incorpo-

rating Service Company, at 211 E. 7th St., Ste. 620, Austin TX 78701-3218.

        2.178.   Third-party Defendant Cecil Robison is an individual residing at 856

County Road 3315, Omaha TX 75571-5382, where he may be served.

        2.179.   Third-party Defendant Rock-Tenn Converting Company is a corporation

duly organized in the State of Georgia and may be served by serving its agent, Corpora-

tion Service Company d/b/a CSC-Lawyers Incorporating Service Company, at 211 E. 7th

St., Ste. 620, Austin TX 78701-3218.

        2.180.   Third-party Defendant Safeway, Inc., is a corporation duly organized in

the State of Delaware and may be served by serving its agent, United States Corpora-

tion Company, at 211 E. 7th St., Ste. 620, Austin TX 78701-3218.

        2.181.   Third-party Defendant Santos Radiator is a sole proprietorship and may be

served by serving its owner, JuanJ. Santos, at 2000 Fort Worth Ave., Dallas TX 75208-

1304.

        2.182.   Third-party Defendant Barloworld Truck Center, Inc., successor by merger

to Texarkana Truck Center, Inc., f/k/a Shreveport Truck Center, is a corporation duly

organized in the State of Tennessee and may be served by serving its agent, Corporation

                                               29

                                                                                                155
Service Company d/b/a CSC-Lawyers Incorporating Service Company, at 211 E. 7th St.,

Ste. 620, Austin TX 78701-3218.

        2.183.   Third-party Defendant South Coast Products, LP, successor to South Coast

Products, Inc., is a limited partnership duly organized in the State of Texas and may be

served by serving its agent, John R. Cantu, at 20 Southbelt Industrial Dr., Houston TX

77047-7010.

        2.184.   Third-party Defendant Southern Plastics, Inc., is a corporation duly

organized in the State of Louisiana and may be served by serving its agent, National

Registered Agents, Inc., at 16055 Space Center Blvd., Ste. 235, Houston TX 77062-6212.

        2.185.   Third-party Defendant SBC Holdings, Inc., f/k/a The Stroh Brewery

Company, is a corporation duly organized in the State of Arizona and may be served by

serving its agent, National Registered Agents, Inc., 638 N. 5th Ave., Phoenix AZ 85003-

1529.

        2.186.   Third-party Defendant Texas State Technical College System is an institu-

tion of higher education and state agency duly organized in the State of Texas and may

be served by serving its President, Dr. Elton E. Stuckly, Jr., at 3801 Campus Drive,

Waco, TX 76705.

        2.187.   Third-party Defendant Baker Hughes Oilfield Operations, Inc., successor

in interest to Tri-State Oil Tools, Inc., is a corporation duly organized in the State of

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California and may be served by serving its agent, CT Corp. System, at 350 N. Saint

Paul St., Ste. 2900, Dallas TX 75201-4234.

     2.188.   Third-party Defendant Twin City Transmission Service, Inc., is a

corporation duly organized in the State of Louisiana and may be served by serving its

agent, Tracey Ardito, at 2923 Deborah Dr., Monroe LA 71201-1953.

     2.189.   Third-party Defendant Wray Ford, Inc., is a corporation duly organized in

the State of Louisiana and may be served by serving its agent, George D. Wray, III, at

2851 Benton Rd., Bossier City LA 71111-2311.

D. Third-party Defendants Not Named in the Order

     2.190.   Third-Party Defendant GATX Rail Corporation is a corporation duly

organized under the laws of the State of New York. It may be served with citation by

serving the Texas Secretary of State for mailing to: Corporation Service Co., 800 Brazos,

Austin, Texas 78701.

     2.191.   Third-Party Defendant Parker-Hannifin Corporation, successor in interest

to JM Clipper Corporation, is a corporation duly organized under the laws of the State

of Ohio. It may be served with citation by serving its agent, CT Corp. System, at 350 N.

Saint Paul St., Ste. 2900, Dallas, Texas 75201-4234.

     2.192.   Third-Party Defendant Pioneer Natural Resources USA, Inc., successor to

Dorchester Refining Company, is a corporation duly organized under the laws of the

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State of Delaware and may be served by serving its agent, CT Corp. System, at 350 N.

Saint Paul St., Suite 2900, Dallas TX 75201-4234.

E. Federal Agencies

     2.193.     The United States Department of the Navy, a branch of the United States

Department of Defense, is named in the Order (as "Naval Air Station Dallas") but is not

a defendant in this lawsuit. No further action will be taken at this time regarding this

entity.

                              3.   JURISDICTION AND VENUE

     3.1.     This is a suit for the recovery of response costs at a state Superfund site

pursuant to an administrative order of the TCEQ. This Court has jurisdiction over the

enforcement of such administrative orders by virtue of§ 2001.202 of the Texas Adminis-

trative Procedure Act ("AP A"), TEx.Gov'T CODE § 2001.202.

     3.2.     Venue is proper in Travis County, Texas, by virtue of § 2001.202 of the APA.

                                     4.   BACKGROUND

     4.1.     On February 12, 2010, the TCEQ issued an administrative order ("the

Order") under§§ 361.188 and 361.272 of the Act, concerning a 6.12 acre tract of land at

211 Duncan Road, approximately 1.25 mile west of the intersection of FM 2275 (George

Richey Road) and FM 3272 (North White Oak Road), 2.6 miles north-northeast of

Clarksville City, Gregg County, Texas, known as the Voda Petroleum, Inc., State Super-

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fund Site ("the Site"). 1 A copy of the Order is attached. (See Attach. 1). The Order found

that the Site was contaminated with various solid wastes, as defined in§ 361.003(34) of

the Act, in the soil and sediment. These solid wastes included the following hazardous

substances, as defined in§ 361.003(11) of the Act: cis-1,2-dichloroethylene; benzene; n-

propylbenzene; MTBE (methyl tertiary-butyl ether); tetrachloroethylene; toluene;

1,1,1-trichloroethane; trichloroethylene; 1,2,4- & 1,3,5-trimethylbenzene; vinyl chloride;

m-, o- & p-xylene; 1,1-dichloroethylene; and 1,2-dichloroethane. (See Ex. B to Attach. 1).

     4.2.    The Site has been proposed for listing on the State Registry of Superfund

Sites. 25 Tex. Reg. 11594 (Nov. 17, 2000). When ranked, the Site had a hazard ranking

score of 23.6, as specified in 30 TEX. ADMIN. CODE§ 335.343. The Order required certain

potentially responsible parties to reimburse the Hazardous and Solid Waste Remedia-

tion Fee Account for all costs incurred by the TCEQ for the remedial investigation

("RI"), feasibility study ("FS"), and oversight of these activities. In addition, the Order

required certain parties to reimburse the Hazardous and Solid Waste Fee Account for

all uncompensated Pre-Remedial Investigation costs, including oversight and other

costs.

     4.3.    The State adopts the allegations, findings and conclusions of the Order herein

by reference.

     1
         For further description and current status, see:
http://www. tceg .state. tx. us/remediation/superfund/state/voda.html.

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     4.4.     The Counter-Defendants listed in subsec. 2.B, above, or their predecessors,

were named as responsible parties in the Order and appealed the Order.

     4.5.     The Third-Party Defendants listed in subsec. 2.C, above, or their predeces-

sors, were named as responsible parties in the Order. These parties received copies of

the Order with a certified forwarding letter, as shown on Attach. 2, but failed to appeal

within the time specified by law. Accordingly, the Order is now final and unappealable

as to them.

     4.6.     The Third-Party Defendants listed in subsec. 2.D, above, were not named in

the Order. Their liability arises as a matter of law and they are joined herein pursuant to

TEX. HEALTH & SAFETY CODE§ 361.323 ("the attorney general shall, and a party may,

join as a party a person reasonably believed to be liable .... ").

     4.7.     To date the TCEQ has spent more than $1,750,000 on pre-remedial and

removal actions, the RI/FS, and remedial action. The TCEQ anticipates that total

response costs will exceed $2,100,000.

     4.8.     Now the State seeks to recover the costs of its remedial investigation,

feasibility study, removal action, remedial design and remedial action at the Site, plus

reasonable attorneys' fees. The State specifically reserves all claims for natural resource

damages.

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                   5.   CAUSE OF ACTION FOR COST RECOVERY

     5.1.   The chemicals of concern found in the soil and sediment at the Site (see

Attach. 1, Ex. B) were "hazardous substances," within the meaning of TEX. HEALTH &

SAFETY CODE§ 361.003(11) or "solid wastes" within the meaning of TEX. HEALTH &

SAFETY CODE §§ 361.003(34)(B) and 361.271.

     5.2.   Each hazardous substance, waste or contaminant found at the Site was a

"discarded material" and thus a "solid waste" within the meaning of TEX. HEAL TH &

SAFETY CODE§§ 361.003(34) and 361.271.

     5.3.   The release of hazardous substances, waste and contaminants at the Site was

a discharging, depositing, dumping, spilling, leaking, or placing of solid waste into or

on land or water, so that the solid waste or a constituent thereof might be emitted into

the air, discharged into surface water or groundwater, or introduced into the environ-

ment in another manner, and was thus a "disposal" within the meaning of TEX. HEALTH

& SAFETY CODE§ 361.003(7) and 361.133.

     5.4.   The Site was a site "at which solid waste or hazardous substances have been

disposed" of, within the meaning of TEX. HEALTH & SAFETY CODE§ 361.133(c).

     5.5.   The Site was a tract of land on which solid waste was disposed of, and thus

was a "solid waste facility" within the meaning of TEX. HEALTH & SAFETY CODE

§§ 361.003(36) and 361.271.

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     5.6.     Each Counter-Defendant and Third-Party Defendant is a "person" within the

meaning of TEX. HEALTH & SAFETY CODE§§ 361.003(23) and 361.271.

     5.7.     Each Counter-Defendant and Third-Party Defendant owned or operated a

solid waste facility at the Site at the time of processing, storage or disposal of solid

waste; or arranged to process, store, or dispose of solid waste at the facility; or accepted

solid waste for transport to a facility; and is thus a "person responsible for solid waste"

within the meaning of TEX. HEALTH & SAFETY CODE§ 361.271(a), and a "responsible

party" within the meaning of TEX. HEALTH & SAFETY CODE§ 361.197.

     5.8.     The Counter-Defendants and Third-Party Defendants are responsible parties

who have not complied with the terms of the Order, within the meaning of TEX. HEALTH

& SAFETY CODE§ 361.197(a).

     5.9.     The Counter-Defendants and Third-Party Defendants are therefore "non-

compliant parties" within the meaning of TEX. HEALTH & SAFETY CODE§ 361.197(b).

     5.10.     The TCEQ's response action at the Site was a "remedial action" or "re-

moval" within the meaning of TEX. HEALTH & SAFETY CODE§§ 361.003(29-30) and

361.133(c).

     5.11.     The funds used by the TCEQ for the response actions were taken from the

Hazardous and Solid Waste Remediation Fee Account, established at TEX. HEALTH &

SAFETY CODE§ 361.133(a).

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     5.12.    The funds expended by the TCEQ were for necessary and appropriate

removal and remedial action at a site where solid waste or hazardous substances had

been disposed of, within the meaning of TEX. HEALTH & SAFETY CODE§ 361.133(c)(l).

     5.13.    Funds from a liable person or independent third person were not sufficient

for the removal or remedial action, within the meaning of TEX. HEAL TH & SAFETY CODE

§ 361.133(c)(l).

     5.14.    Funds from the federal government were not sufficient for the removal or

remedial action, within the meaning of TEX. HEALTH & SAFETY CODE§ 361.133(c)(l).

     5.15.    Thus, the funds expended by the TCEQ were "costs of an action taken

under Section 361.133(c)(l), (2), (3), (5) or (6)," within the meaning of TEX. HEALTH &

SAFETY CODE§ 361.197(d).

     5.16.    Accordingly, the TCEQ should have judgment against the Counter-Defen-

dants and Third-Party Defendants for all of its response costs at the Site, as allowed by

TEX. HEALTH & SAFETY CODE§ 361.197(d).

                6.   ACTION TO ENFORCE ADMINISTRATIVE ORDER

     6.1.    Each Third-Party Defendant named in subsec. 2.C, above, failed to appeal the

Order within 30 days of issuance as required by TEX. HEALTH & SAFETY CODE

§ 361.321(c), or within 45 days of the date of receipt, hand delivery, or publication

service as required by TEX. HEALTH & SAFETY CODE§ 361.322(a). Thus, the Order is final

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and unappealable as to those Third-Party Defendants.

     6.2.   The Order is not "invalid, arbitrary, or unreasonable" within the meaning of

TEX. HEALTH & SAFETY CODE§ 361.321(e), based upon the substantial evidence rule. See

Gerst v. Nixon, 411S.W.2d350, 354 (Tex. 1966).

     6.3.   There was an "actual or threatened release of solid waste or hazardous

substances" at the Site that posed an "imminent and substantial endangerment to the

public health and safety or the environment," and the Counter-Defendants and Third-

Party Defendants were "liable for the elimination of the release or threatened release, in

whole or in part," within the meaning of TEX. HEALTH & SAFETY CODE§ 361.322(g).

     6.4.   The remedy selected for the Site was not "arbitrary or unreasonable," based

upon the substantial evidence rule. See TEX. HEALTH & SAFETY CODE§ 361.322(h), Gerst,
411 S.W.2d at 354.

     6.5.   Accordingly, the Order should be upheld pursuant to TEX. HEAL TH & SAFETY

CODE§§ 361.321and361.322(g).

     6.6.   Each Counter-Defendant and Third-Party Defendant should be ordered to

comply with all the terms and provisions of the Order.

      7.    INJUNCTION AS ALTERNATIVE TO ADMINISTRATIVE ORDER

     7.1.   The Third-Party Defendants listed in subsec. 2.D, above, are "persons

responsible for solid waste," within the meaning of TEX. HEALTH & SAFETY CODE

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§§ 361.271 & 361.273.

     7.2.   Accordingly, these Third-Party Defendants should be enjoined to "provide

and implement a cost effective and environmentally sound remedial action plan

designed to eliminate the release or threatened release," as required by TEX. HEAL TH &

SAFETY CODE § 361.273(2).

     7.3.   These Third-Party Defendants should be ordered to carry out all the terms

and provisions of the Order.

                         8.    ATTORNEYS' FEES AND COSTS

     8.1.   The TCEQ has incurred reasonable attorneys' fees, reasonable costs to

prepare and provide witnesses, and reasonable costs of investigating and assessing the

Site, and asks that these costs and fees be recovered from the Counter-Defendants and

Third-Party Defendants as allowed by TEX. WATER CODE§ 7.108, TEX. Gov'T CODE

§ 402.006(c) and TEX. HEALTH & SAFETY CODE§ 361.341.

                                      9.   PRAYER

     WHEREFORE, the TCEQ requests that:

     A.     Each Third-Party Defendant be served with citation;

     B.     Each Counter-Defendant and Third-Party Defendant be required to appear

herein and answer this petition within the time specified by law;

     C.     The Court uphold the Order and require each Defendant to comply with all

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of its terms and provisions;

     D.    The TCEQ have judgment against all Counter-Defendants and Third-Party

Defendants, jointly and severally, for its costs incurred and to be incurred in responding

to the release or threatened release of solid waste and hazardous substances at the Site,

plus interest at the legal rate until paid;

     E.    The TCEQ have judgment against each Counter-Defendant and Third-Party

Defendant for reasonable attorneys' fees, reasonable costs to prepare and provide

witnesses, and all of its court costs; and

     F.    The Court grant the TCEQ such other and further relief as the Court may

deem just and proper.

     Respectfully submitted this              day of August 2011.

                                                GREG ABBOTT
                                                Attorney General of Texas

                                                DANIEL T. HODGE
                                                First Assistant Attorney General

                                                BILL COBB
                                                Deputy Attorney General for Civil
                                                Litigation

                                                BARBARA B. DEANE
                                                Chief, Environmental Protection and
                                                Administrative Law Division

                                                DAVID PREISTER
                                                Chief, Environmental Protection Section

                                               40

                                                                                             166
                                                 22!.~
                                             THOMAS H. EDWARDS
                                             Assistant Attorney General
                                             State Bar No. 06461800

                                             Office of the Attorney General
                                             P. 0. Box 12548, Capitol Station
                                             Austin, Texas 78711-2548
                                             Tel: (512) 463-2012
                                             Fax: (512) 320-0052

                                             ATTORNEYS FOR THE TEXAS
                                             COMMISSION ON ENVIRONMENTAL
                                             QUALITY

                             REQUEST FOR DISCLOSURE

      Pursuant to Texas Rule of Civil Procedure 194, the TCEQ requests that each
Counter-Defendant and Third-Party Defendant disclose, within 50 days of service of
this request (or waiver of such service), the information or material described in Texas
Rule of Civil Procedure 194.2.

                                             THOMAS H. EDWARDS

                                            41

                                                                                           167
                               CERTIFICATE OF SERVICE

     I, Thomas H. Edwards, do certify that a true and correct copy of the foregoing
document was mailed by first class U.S. mail, on the J S.!: day of August 2011, to the
following parties or attorneys of record:

ATTORNEY                                        PARTY
R. Steve Morton                                 Group of plaintiffs in the AAMCO
Janessa C. Glenn                                Transmissions case
MOLTZ MORTON O'TOOLE, LLP
106 E. 6th St., Ste. 700
Austin, Texas 78701

John R. Eldridge                                Group of plaintiffs in the Chevron USA
HA YNES AND BOONE, L.L.P.                       case
1221 McKinney St., Ste. 2100
Houston, Texas 77010

Adam H. Sencenbaugh                             Group of plaintiffs in the Chevron USA
Haynes and Boone, L.L.P.                        case
600 Congress Ave., Ste. 1300
Austin, Texas 78701

Paul M. Terrill III                             Ark-La-Tex Waste Oil Co., Inc., and
Geoffrey P. Kirshbaum                           Young Chevrolet, Inc.
THE TERRILL FIRM, P.C.
810 West 10th St.
Austin, Texas 78701

Steve McMillen                                  ARAMARK Uniform & Career Apparel,
Amber Mad ver                                   LLC
BAKER BOTTS L.L.P.
98 San Jacinto Blvd., Ste. 1500
Austin, Texas 78701-4039

                                           42

                                                                                         168
Andrew C. Brought                                                                 Alcatel-Lucent USA, Inc.
SPENCER FANE BRITT & BROWNE LLP
1000 Walnut, Ste. 1400
Kansas City, Missouri 64106

Ali Abazari                                                                       The Sabine Mining Company
JACKSON WALKER L.L.P.
100 Congress Ave., Ste. 1100
Austin, Texas 78701

Steve A. Ramon                                                                    The Sabine Mining Company
JACKSON WALKER L.L.P.
112 East Pecan, Ste. 2400
San Antonio, Texas 78205

Robert T. Stewart                                                                 Southwestern Petroleum Corporation
Brenda L. Clayton
KELLY HART & HALLMAN LLP
301 Congress Ave., Ste. 2000
Austin, Texas 78701

John A. Riley                                                                     Luminant Generation Company, LLC
VINSON & ELKINS LLP
2801 Via Fortuna, Ste. 100
Austin, Texas 78746

John Dugdale                                                                      Air Liquide America LP
BURFORD & RYBURN, L.L.P.
500 N. Akard, Ste. 3100
Dallas, Texas 75201

                                                                                 :171.
                                                                             THOMAS H. EDWARDS
U ·\CASES I \/ODA I Counterpeti ti on I Voda Colinlerpetition 110801. wpd

                                                                            43

                                                                                                                       169
                    APP. E

TCEQ’s Third Original Answer, responding to Shell
  and Exxon Mobil, and Plea to the Jurisdiction
                 (CR:675-687)
                                                                                      Filed
                                                                                      13 August 9 P3:09
                                                                                      Amalia Rodriguez-Mendoza
                                                                                      District Clerk
                                                                                      Travis District
                                                                                      D-1-GN-10-000772
                               CAUSE NO. D-1-GN-10-000772

YOUNG CHEVROLET, INC., et al.,                   §            IN THE DISTRICT COURT OF
          Plaintiffs,                            §
                                                 §
v.                                               §
                                                 §
TEXAS COMMISSION ON                              §
ENVIRONMENTAL QUALITY, et al.,                   §            TRAVIS COUNTY, TEXAS
          Defendants,                            §
                                                 §
v.                                               §
                                                 §
YOUNG CHEVROLET, INC., et al.,                   §
   Counter- and Third-Party                      §            345th JUDICIAL DISTRICT
   Defendants                                    §

         TCEQ'S THIRD AMENDED ORIGINAL ANSWER, RESPONDING TO
          SHELL AND EXXON MOBIL, AND PLEA TO THE JURISDICTION

TO THE HONORABLE JUDGE OF SAID COURT:

     Defendants the Texas Commission on Environmental Quality ("TCEQ"); and

Chairman Bryan W. Shaw, Ph.D., Commissioner Buddy Garcia, Commissioner Carlos

Rubinstein, and Commissioner Toby Baker,1 in their official capacities; file this Third

Amended Original Answer, responding to the Second Amended Original Petition filed

by Chevron USA, Inc., et al.

                                     I. BACKGROUND

     ExxonMobil Corporation and Shell Oil Company were among a group of plaintiffs

     1
       Commissioner Toby Baker replaced Commissioner Garcia in 2012 and might be
considered to have been substituted into this lawsuit; accordingly he is also listed as a
respondent herein.

                                                                                                    675
that filed their Original Petition in case that was subsequently consolidated into the

present case. 2 They filed their First Amended Original Petition in that action on March

26, 2010; the TCEQ answered on March 30, 2010. That cause was consolidated with

others into the present case. See Agreed Order for Consolidation (May 18, 2010). The

TCEQ then filed a counterclaim. See TCEQ's Original Counter-pet. and Third-party Pet.

(Aug. 1, 2011). Subsequently most parties settled their claims with the TCEQ in a

severed action. 3

     Plaintiffs/Counter-Defendants ExxonMobil Corporation, Mobil Oil Corporation,

Pennzoil-Quaker State Company and Shell Oil Company filed an Original Answer

(Aug. 7, 2012), that contained a General Denial and incorporated the affirmative

defenses from their First Amended Original Petition. The TCEQ then filed 4 a Second

Supplement to Counter-petition and Third-party Petition (Feb. 7, 2013), which corrected

the name of Mobil Oil Corporation to ExxonMobil Oil Corporation and added Exxon

Mobil Corporation to the case. These parties filed a General Denial that, as before,

incorporated the affirmative defenses in the First Amended Original Petition. See

     2
         See Chevron USA Inc. v. Tex. Comm'n on Envtl. Quality, No. D-1-GN-10-000793 (419th
Dist. Ct., Travis County, Tex. Mar. 26, 2010).

     3
         See Agreed Final J., Young Chevrolet, Inc. v. Tex. Comm'n on Envtl. Quality, No. D-1-GN-
12-002297 (345th Dist. Ct., Travis County, Tex. July 30, 2012).

     4
       The First Supplement to Counter-petition and Third-party Petition (Oct. 5, 2011) is not
relevant here.

                                                 2

                                                                                                    676
Original Answer to Counter-pet. and Third-party Pet. Oune 11, 2013).

     Thus the remaining plaintiffs from the original Chevron USA case, properly

named, are Exxon Mobil Corporation, ExxonMobil Oil Corporation, Pennzoil-Quaker

State Company and Shell Oil Company. The TCEQ and the Commissioners file the

following amended answer to these plaintiffs' First Amended Original Petition and also

respond to their original answers, to the extent those answers incorporate affirmative

defenses.

                               II. PLEA TO THE JURISDICTION

     A. Request for Declaratory Judgment

     The Plaintiffs' First Amended Original Petition includes a claim under the Uniform

Declaratory Judgments Act ("UDJA"), TEX. Crv. PRAC. & REM. CODE § 37.001 et seq.,

seeking a declaration that the TCEQ's Administrative Order (Docket No. 2009-1706-SPF,

entered Feb. 12, 2010) ("Order") is invalid or is an ultra vires action by the TCEQ. 5 The

Plaintiffs seek a declaratory judgment that the Order "is of no legal effect" and seeks

their attorney's fees and costs under TEX. Crv. PRAC. & REM. CODE§ 37.009. 6

     The court lacks jurisdiction over the Plaintiffs' UDJA claim because it seeks a

redundant remedy to that afforded by the Texas Solid Waste Disposal Act, TEX. HEALTH

     5
         See Pl.s' First Am. Orig. Pet. (No. D-1-GN-10-000793), paras. 8, 48, 52, 68 and 74.

     6
         See Pl.' s First Am. Orig. Pet. paras. 48, 68 and 74.

                                                    3

                                                                                               677
& SAFETY CODE § 361.001 et seq. ("TSWDA"). The Texas Legislature has defined the sole

method for appealing the Order at TEX. HEALTH & SAFETY CODE§ 361.322. The TSWDA

sets forth the burden and method for challenging the remedy detailed in the Order at

TEX. HEALTH & SAFETY CODE§ 361.322(g)-(h), and also sets forth the burden and means

for recovering attorneys' fees and costs if the entirety of the Order itself is challenged (to

be awarded only upon a finding by the Court that the Order is "frivolous, unreason-

able, or without foundation").7

     This standard subsumes any assertion that the TCEQ or its Commissioners

committed an ultra vires act in issuing the Order. The TSWDA unambiguously sets forth

the sole means and method for parties seeking to challenge the validity of a Superfund

order, and the sole means and method for parties that are successful in such a challenge

to recover their attorneys' fees and costs.

     When a statute provides a means to attack an administrative agency's order, one

     7
         The Solid Waste Disposal Act provides:

     Sec. 361.342. COST RECOVERY BY APPEALING OR CONTESTING PARTY. If the
     court finds that an administrative order [of the type relevant here] is frivolous,
     unreasonable, or without foundation with respect to a party named by the order, the
     party appealing or contesting the order is entitled to recover from the state its
     reasonable:
           (1) attorney's fees;
           (2) costs to prepare and provide witnesses; and
           (3) costs of studies, analyses, engineering reports, tests, or other projects the
     court finds were necessary to prepare the party's case.

TEX. HEALTH   &   SAFETY CODE§   361.342.

                                                  4

                                                                                                 678
may not maintain a declaratory judgment action seeking remedies that are merely

redundant with those available from the statute. See Strayhorn v. Raytheon E-Sys., Inc.,

101 S.W.3d 558, 572 (Tex. App. -Austin 2003, pet. denied).

     Accordingly, because Plaintiffs' claims under the UDJA are redundant of and

supplanted by the TSWDA, this court lacks jurisdiction to hear them and they should be

struck. See id.; see also Becon Nat'l Ins. Co. v. Montemayor, 86 S.W.3d 260, 266-67 (Tex.

App.-Austin 2002, no pet.) (merely alleging that an agency has exceeded its authority

is insufficient to confer jurisdiction under the UDJA when a statute provides an express

"avenue for attacking an agency order," because "a declaratory judgment action will

not lie to provide redundant remedies") and Martin v. Amerman, 133 S.W.3d 262, 267

(Tex. 2004) (when a statute expressly governs a party's substantive claims, a party may

not proceed under the UDJA and recover attorneys' fees).

     For these same reasons, the court is similarly without jurisdiction over Plaintiffs'

claims that the Plaintiffs' due process rights under the U.S. Constitution (U.S. CONST.

art. XIV) and the Texas Constitution (TEX. CONST. art. I,§ 19) were violated because the

law did not "afford Plaintiffs an opportunity for an adjudicative hearing" before entry

of the Order, Pl.'s First Am. Orig. Pet. para. 49, or as to the "necessity, appropriateness,

and reasonableness of past and future investigation and remedial costs incurred by the

TCEQ," Pl.'s First Am. Orig. Pet. para. 50, because the TSWDA provides the sole

                                              5

                                                                                               679
method and means for attacking the Order. See Young Chevrolet, Inc. v. Tex. Motor Vehicle

Bd., 974 S.W.2d 906, 911 (Tex. App.-Austin 1998, pet. denied).

     B. Naming Individuals in Official Capacity

     The Plaintiffs' First Amended Original Petition names TCEQ Chairman Bryan W.

Shaw and Commissioners Buddy Garcia and Carlos Rubinstein, in their official capaci-

ties. Pl.s' First Am. Orig. Pet. paras. 3-5 at 2-3. However, the Plaintiffs have an adequate

statutory method of appeal against the Commission, not the Commissioners, see TEX.

HEALTH & SAFETY CODE§§ 361.321, 361.322, and they have brought their appeal under

those sections. See Pl.s' First Am. Orig. Pet. para. 8 at 3.

     The TSWDA specifically provides that:

     The person appealing the order must join the commission as a party and may
     join as parties any other person named as a responsible party in the adminis-
     trative order and any other person who is or may be liable for the elimination
     of the actual or threatened release of solid waste or hazardous substances
     governed by the administrative order.

TEX. HEALTH & SAFETY CODE§ 361.322(d). This section limits the parties whom the

Plaintiffs may join to their appeal. The individual Commissioners are not included and

are rightfully subsumed within the meaning of "commission as a party." Accordingly,

the claims against the individual Commissioners are without statutory authority (and as

set forth in II.A., any claim against the Commissioners under the UDJA is redundant

and adds nothing to the Plaintiffs' remedies) and should be struck.

                                               6

                                                                                               680
                               III. PLEA IN ABATEMENT

     Defendants re-allege the matters set forth in their plea to the jurisdiction and assert

them also as a plea in abatement.

                             IV. AFFIRMATIVE DEFENSES

     Subject to the foregoing plea to the jurisdiction and plea in abatement, Defendants

re-allege the matters set forth in their plea to the jurisdiction and assert them also as

affirmative defenses. Additionally, Defendants assert that:

     •    Plaintiffs' UDJA claim is barred, in whole or in part, by the doctrine of

          sovereign immunity, including both immunity from suit and immunity from

          liability.

     •    The Plaintiffs' request for a declaration under the UDJA that the Order is

          invalid, or is an ultra vires action by the TCEQ or the Commissioners, is not

          within the scope of the actions authorized by the UDJA.

     •    Plaintiffs' claims against TCEQ Chairman Bryan W. Shaw and Commissioners

          Buddy Garcia and Carlos Rubinstein, in their official capacities, are barred, in

          whole or in part, by the doctrine of sovereign immunity, including both

          immunity from suit and immunity from liability.

     •    Plaintiffs' claims against TCEQ Chairman Bryan W. Shaw and Commissioners

          Buddy Garcia and Carlos Rubinstein, in their official capacities, are not within

                                              7

                                                                                               681
            the scope of the action provided in Section 361.322 of the Texas Health &

             Safety Code.

                                    V. SPECIAL EXCEPTIONS

     Defendants specially except to the Plaintiffs' attempt to impose a burden of proof

and a standard of review not contemplated by the TSWDA. Plaintiffs assert that TCEQ

and/or its Commissioners committed an ultra vires act or acts in issuing this Superfund

Order. 8 However, the TSWDA clearly sets forth the burden of proof and standards of

review for appeals of Superfund orders, as follows:

     The district court shall uphold the administrative order if the commission
     proves by a preponderance of the evidence that:
          (1) there is an actual or threatened release of solid waste or hazardous
     substances that is an imminent and substantial endangerment to the public
     health and safety or the environment; and
          (2) the person made subject to the administrative order is liable for the
     elimination of the release or threatened release, in whole or in part.

TEX. HEALTH & SAFETY CODE§ 361.322(g) (emphasis added). For parties challenging the

"appropriateness of the selected remedial action ... in the appeal of the administrative

order, the remedial action shall be upheld unless the court determines that the remedy

is arbitrary or unreasonable." Id. § 361.322(h) (emphasis added). Finally, a party challeng-

ing the administrative order as a whole may establish that it is "frivolous, unreasonable, or

without foundation with respect to a party named by the order." Id.§ 361.342 (emphasis

     8
         See Pl.s' First Am. Orig. Pet., paras. 8, 48, 52, 68 and 74.

                                                     8

                                                                                                682
added). The TSWDA does not contemplate any other burdens or standards of review

for challenges to Superfund Orders.

     Therefore, the standard of review in the appeal of this Order is not whether the

TCEQ committed an ultra vires act, but whether:

          (a) TCEQ can prove, by a preponderance of the evidence, the two factors

     listed in§ 361.322(g)(l) and (2);

          (b) Plaintiffs can show that the selection of the remedy by TCEQ was arbitrary

     or unreasonable; or

          (c) Plaintiffs can show that the Order as a whole is "frivolous, unreasonable,

     or without foundation with respect to a party named by the order." Id.§ 361.342.

Plaintiffs' attempts to change these standards of review and burdens (in particular in

the allegations stated in para. 52 in Plaintiffs' First Amended Original Petition) are

without merit and must be stricken or properly amended.

                                 VI. GENERAL DENIAL

     The Defendants deny each and every allegation in Plaintiffs' First Amended

Original Petition and demand strict proof thereof. The Defendants reserve the right to

amend this Third Amended Original Answer as allowed under the Texas Rules of Civil

Procedure.

     WHEREFORE, PREMISES CONSIDERED, the Defendants pray judgment of this

                                             9

                                                                                           683
Court denying the relief requested by the Plaintiffs. The Defendants further pray for all

costs of court and for such other relief as to which they may be justly entitled, both in

law and in equity.

     Respectfully submitted this    L~    day of August 2013.

                                              GREG ABBOTT
                                              A ttomey General of Texas

                                              DANIEL T. HODGE
                                              First Assistant Attorney General

                                              JOHN B. SCOTT
                                              Deputy Attorney General for Civil
                                              Litigation

                                              JON NIERMANN
                                              Chief, Environmental Protection Division

                                              THOMAS H. EDWARDS
                                              Assistant Attorney General
                                              Tex.BarNo.06461800
                                              Thomas.Ed wards@TexasAttorneyGeneral.gov

                                              CRAIG J. PRITZLAFF
                                              Assistant Attorney General
                                              Tex.BarNo.24046658
                                              Craig.Pritzlaff@TexasAttorneyGeneral.gov

                                             10

                                                                                            684
                                           Office of the Attorney General
                                           P. 0. Box 12548, Capitol Station
                                           Austin, Texas 78711-2548
                                           Tel: (512) 463-2012
                                           Fax: (512) 320-0911

                                           ATTORNEYS FOR THE TEXAS
                                           COMMISSION ON ENVIRONMENTAL
                                           QUALITY, CHAIRMAN BRYAN W.
                                           SHAW, PH.D., COMMISSIONER BUDDY
                                           GARCIA, COMMISSIONER CARLOS
                                           RUBINSTEIN, AND COMMISSIONER
                                           TOBY BAKER

                            CERTIFICATE OF SERVICE

     I, Thomas H. Edwards, do hereby certify that a true and correct copy of the
foregoing document was served by First Class U.S. Mail on the following parties or
attorneys of record, on the 1 -Ht day of August 2013.

Attorneys                                      Parties

John R. Eldridge                               Exxon Mobil Corporation, ExxonMobil
HAYNES AND BOONE, L.L.P.                       Oil Corporation, Pennzoil-Quaker State
1221 McKinney Street, Suite 2100               Company and Shell Oil Company
Houston, Texas 77010
Telephone: (713) 547-2000
Facsimile: (713) 547-2600
john.eldridge@haynesboone.com

                                          11

                                                                                        685
Paul M. Terrill III                 Ark-La-Tex Waste Oil Co., Inc.
Geoffrey P. Kirshbaum
THE TERRILL FIRM, P.C.
810 West 10th Street
Austin, Texas 78701-2005
Telephone: (512) 474-9100
Facsimile: (512) 474-9888
gkirshbaum@terrill-law.com

John E. Leslie                      Howard Freilich, d/b/a Quick Stop
JOHN LESLIE I PLLC                  Brake and Muffler
1216 Florida Dr., Ste. 140
Arlington, Texas 76015-2393
Tel: (817) 505-1291

Carl D. Haddad                      Petroleum Stripping, Inc.
GRAY, BURCH & HADDAD
13301 East Freeway, Ste. 225
Houston, Texas 77015
Tel: (713) 453-6339
Fax: (713) 453-6923
gbhlawfirm@yahoo.com

Sam L. Baxter, Pres.                Baxter Oil Service
P.O. Box 20255
Beaumont TX 77720-0255
Tel: 409-840-9000
Fax: 409-840-9090
samleebaxter@gmail.com

Frank Kosar                         d/b/a Rite Way Truck Rental
2606 Cartwright St.
Dallas TX 75212-4306

                               12

                                                                        686
Norit Americas, Inc.                                         Norit Americas, Inc., successor to
William A. Smith, Sr. Counsel                                American Norit Company, Inc.
3200 University Ave.
P.O. Box 790
Marshall TX 75671
Tel: 903-923-1056
Fax: 903-938-9701
bsmith@norit-americas.com

                                                             Billy D. Cox Truck Leasing, Inc.
BillyD. Cox
P.O. Box 541235
Dallas TX 75254

Janet Blake                                                  d/b/a D&D Radiator & Muffler
7022 Bruton Rd.
Dallas TX 75217-1240

David F. Zalkovsky, Agent                                    Central Transfer & Storage Co.
11302 Ferndale Rd.
Dallas TX 75238-1020

George E. Kuhn                                               SBC Holdings, Inc., f/k/a The Stroh
BUTZEL LONG                                                  Brewery Company
350 S. Main St., Ste 300
Ann Arbor MI 48104
Tel: 734-213-3257
Fax: 734-995-1777
kuehn@butzel.com

                                                        THOMAS H. EDWARDS

U:\CASES\ YODA \PLEADINGS\3rd Amd Orig Ans 130808.wpd

                                                        13

                                                                                                   687
                        APP. F

Act approved June 2, 1969, 61st Leg., R.S., ch. 405, 1969
      Tex. Gen. Laws 1320, 1320 (repealed 1989)
  recodified by Act approved June 14, 1989, 71st Leg.,
       R.S., ch. 678, 1989 Tex. Gen. Laws 2230
Ch. 405          61ST LEGISLATURE-REGULAR SESSION

                       SOLID WASTE DISPOSAL ACT
                                   CHAPTER 405        GU

                                     S. B. No. 125
    An Act relatlng to the control of the collectlon, handling, storage, and dlsposal of
        putresclble and non-putresclble discarded or unwanted materlals, 1ncludlng
        solld materlals and certain materials In llquld or semlllquid form, referred
        to in this Act as "solld waste"; prescribing the duties, powers, and func·
        tions of the State Department of Health, the Texas Water Quallty Board,
        counties, cities, and certain other polltical subdivisions of the state relative
        to solid waste management programs and control; prohibiting the collection,
        handling, storage or disposal of solld waste or the use or operation of sites
        for the disposal of solid waste in violation of this Act or of any rules, reg.
        ulatlons, permits, llcenses, or other orders promulgated under this Act;
        prescribing penalties for violations and providing for enforcement; provid·
         Ing for severability; and declaring an emergency.

Be it enacted by the Legislature of the State of Texas:
    Section 1. This Act may be cited as the Solid Waste Disposal Act.
It is the policy of the state and the purpose of this Act to safeguard the
health, welfare, and physical property of the people through controlling
the collection, handling, storage, and disposal of solid wastes.
    Sec. 2. As used in this Act, unless the context requires a different
definition:
    (1) "person" means individual, corporation, organization, government
or governmental subdivision or agency, business trust, partnership, as-
sociation, or any other legal entity;
    (2) "department" means the Texas State Department of Health;
    (3) "board" means the Texas Water Quality Board;
    (4) "local government" means a county; an incorporated city or town;
or a political subdivision exercising the authority granted under Section
6 of this Act;
    (5) "solid waste" means all putrescible and nonputrescible discarded
or unwanted solid materials, including municipal solid waste and indus-
trial solid waste; as used in this Act, the term "solid waste" does not in-
clude, and this Act does not apply to: (i) soil, dirt, rock, sand and other
natural and man-made inert solid materials used to fill land if the object
of the fill is to make the land suitable for the construction of surface im-
provements; or (ii) waste materials which result from activities asso-
ciated with the exploration, development, or production of oil or gas and
are subject to control by the Texas Railroad Commission;
    (6) "municipal solid waste" means solid waste resulting from or inci-
dental to municipal, community, trade, business and recreational activities,
including garbage, rubbish, ashes, street cleanings, dead animals, aban-
doned automobiles, and all other solid waste other than industrial solid
waste.
    (7) "industrial solid waste" means solid waste resulting from or inci-
dental to any process of industry or manufacturing, or mining or agri-
cultural operations, including discarded or unwanted solid materials sus-
pended or trani>ported in liquids, and discarded or unwanted materials in
liquid or semi-liquid form; the term "industrial solid waste" does not
69. Vernon's Ann.Clv.St. nrt. 4477-7, §§
 1-11.

                                          1320
              GIST LEGISLATURE-REGULAR SESSION                      Ch. 405

include waste materials, the discharge of which is subject to the Texas
Water Quality Act;
     (8) "garbage" means solid waste consisting of putrescible animal and
vegetable waste materials resulting from the handling, preparation, cook-
ing, and consumption of food, including waste materials from markets,
storage facilities, handling, and sale of produce and other food products;
     (9) "rubbish" means nonputrescible solid waste (excluding ashes),
consisting of both combustible and noncombustible waste materials; com-
bustible rubbish includes paper, rags, cartons, wood, excelsior, furniture,
rubber, plastics, yard trimmings, leaves, and similar materials; noncom-
bustible rubbish includes glass, crockery, tin cans, aluminum cans, metal
furniture, and like materials which will not burn at ordinary incinerator
temperatures (1600° F to 1800° F) ;
     (10) "sanitary landfill" means a controlled area of land upon which
solid waste is disposed of in accordance with standards, regulations or
orders established by the department or the board;
     (11) "incineration" means the destruction of solid waste by burning
in a furnace used for the volume reduction of solid waste (an incinera-
tor); and
     (12) "composting" means the controlled biological decomposition of
organic solid waste under aerobic conditions.
     Sec. 3. (a) The department is hereby designated the state solid waste
agency with respect to the collection, handling, storage, and disposal of
municipal solid waste, and shall be the coordinating agency for all mu-
nicipal solid waste activities. The department shall be guided by the
State Board of Health in its activities relating to municipal solid waste.
The department shall seek the accomplishment of the purposes of this
Act through the control of all aspects of municipal solid waste collection,
handling, storage, and disposal by all practical and economically feasible
methods consistent with the powers and duties given the department under
 this Act and other existing legislation. The department has the powers
and duties specifically prescribed in this Act and all other powers neces-
sary or convenient to carry out its responsibilities. The department shall
consult with the board with respect to the water pollution control and
water quality aspects, and with the Texas Air Control Board with respect
to the air pollution control and ambient air quality aspects, of the mat-
ters placed under the jurisdiction of the department by this Act.
     (b) The board is hereby designated the state solid waste agency with
 respect to the collection, handling, storage and disposal of industrial
 solid waste, and shall be the coordinating agency for all industrial solid
waste activities. The board shall seek the accomplishment of the purposes
of this Act through the control of all as1iects of industrial solid waste
 collection, handling, storage and disposal by all practical and economically
 feasible methods consistent with the powers and duties given it under this
 Act and other existing legislation. The board has the powers and duties
 specifically prescribed in this Act and all other powers necessary or
 convenient to carry out its responsibilities. The board shall consult with
 the department with respect to the public health aspects, and with the
Texas Air Control Board with respect to the air pollution control and
 ambient air quality aspects, of the matters placed under the jurisdiction
 of the board by this Act.
     (c) Where both municipal solid waste and industrial solid waste are
 involved in any activity of collecting, handling, storing or disposing of
 solid waste, the department is the state agency responsible and has juris-
 diction over the activity; and, with respect to that activity, the depart-
                                    1321
Ch. 405       61ST LEGISLATURE-REGULAR SESSION
ment may exercise all of the powers, duties and functions vested in the
department by this Act.
    Sec. 4. (a) As used in this section, the term "state agency" refers
to either the department or the board, and "state agencies" means both the
department and the board.
    (b) The department is authorized to develop a state municipal solid
waste plan, and the board is authorized to develop a state industrial solid
waste plan. The state agencies shall coordinate the solid waste plans
developed. Before a state agency adopts its solid waste plan or makes
any significant amendments to the plan, the Texas Air Control Board shall
have the opportunity to comment and make recommendations on the
proposed plan or amendments, and shall be given such reasonable time
to do so as the state agency may specify.
    {c) Each state agency may adopt and promulgate rules and regula-
tions consistent with the general intent and purposes of this Act, and
establish minimum standards of operation for all aspects of the manage-
ment and control of the solid waste over which it has jurisdiction under
this Act, including but not limited to collection, handling, and storage,
and disposal by incineration, sanitary landfill, composting, or other
method.
    ( d) Each state agency is authorized to inspect and approve sites used
or proposed to be used for the disposal of the solid waste over which it
hail jurisdiction.
    (e) Except as provided in Subsection (f) of this section with respect
to certain industrial solid wastes, each state agency has the power to
require and issue permits authorizing and governing the operation and
maintenance of sites used for the disposal of solid waste. This power
may be exercised by a state agency only with respect to the solid waste
over which it has jurisdiction under this Act. If this power is exercised
by a state agency, that state agency shall prescribe the form of and
reasonable requirements for the permit application and the procedures to
be followed in processing the application, to the extent not otherwise
provided for in this subsection. The following additional provisions apply
if a state agency exercises the power authorized in this subsection:
     (1) The state agency to whom the permit application is submitted shall
mail a copy of the application or a summary of its contents to the Texas
Air Control Board, to the other state agency, to the mayor and health
authorities of any city or town within whose extraterritorial jurisdiction
the solid waste disposal site is located, and to the county judge and health
authorities of the county in which the site is located. The governmental
entities to whom the information is mailed shall have a reasonable time,
as prescribed by the state agency to whom the application was originally
submitted, to present comments and recommendations on the permit ap-
plication before that state agency acts on the application.
     (2) A separate permit shall be issued for each site. The permit shall
include the names and addresses of the person who owns the land where
the waste disposal site is located and the person who is or will be the
operator or person in charge of the site; a legal description of the land
on which the site is located; and the terms and conditions on which the
permit is issued, including the duration of the permit.
    (3) The state agency may extend or renew any permit it issues in
accordance with reasonable procedures prescribed by the state agency.
The procedures prescribed in Paragraph (1) of this Subsection (e) for
permit applications apply also to applications to extend or renew a per-
mit.
                                   1322
              61ST LEGISLATURE-REGULAR SESSION                       Ch. 405

    ( 4) If a permit is issued, renewed, or extended by a state agency in
accordance with this Subsection (e), the owner or operator of the site
does not need to obtain a license for the same site from a county, or from
a political subdivision exe1 :!ising the authority granted in Section 6 of
this Act.
    (5) A permit is issued in personam and does not attach to the realty
to which it relates. A permit may not be transferred without prior notice
to and prior approval by the state agency which issued it.
    (6) The state agency has the authority, for good cause, after hearing
with notice to the permittee and to the governmental entities named in
Paragraph (1) of this Subsection (e), to revoke or amend any permit it
issues for reasons pertaining to public health, air or water pollution, land
use, or violation of this Act or of any other applicable laws or regulations
controlling the disposal of solid waste.
    (f) This subsection applies to the collection, handl:lng, storage, and
disposal of industrial solid waste which is disposed of within the property
boundaries of a tract of land owned and controlled by the owners or
operators of the particular industrial plant, manufacturing plant, mining
operation, or agricultural operation from which the waste results or is
produced, and which tract of land is within 50 miles from the plant or
operation which is the source of the industrial solid waste. This sub-
section does not apply if the waste is collected, handled, stored, or dis-
posed of with solid waste from uny other source or sources. The board
may not require a permit under this Act for the disposal of any solid
waste to which this subsection applies, but this does not change or limit
any authority the board may have with respect to the requirement of
permits, the control of water quality, or otherwise, under the Texas Water
Quality Act. However, the board may adopt rules and regulations as
provided under Subsection (c) of this section to govern and control the
collection, handling, storage, and disposal of the industrial solid waste
to which this subsection applies so as to protect the property of others,
public property and rights-of-way, groundwater, and other rights requir-
ing protection. The board may require a person who disposes or plans to
dispose of industrial solid waste under the authority of this subsection to
submit to the board such information as may be reasonably required to
enable the board, or the executive director of the board when so author-
ized by the board, to determine whether in the judgment of the board or
the executive director the waste disposal activity is one to which this
subsection applies.
    (g) The state agencies may, either individually or jointly:
    (1) provide educational, advisory, and technical services to other agen-
cies of the state, regional planning agencies, local governments, special
districts, institutions, and individuals with respect to solid waste man-
agement and control, including collection, storage, handling and dis-
posal;
    (2) assist other agencies of the state, regional planning agencies, local
governments, special districts, and institutions in acquiring federal grants
for the development of solid waste facilities and management programs,
and for research to improve the state of the art; and
    (3) accept funds from the federal government for purposes relating
to solid waste management, and to expend money received from the federal
government for those purposes in the manner prescribed by law and in
accordance with such agreements as may be necessary and appropriate
between the federal government and each state agency.
                                    1323
Ch. 405       61ST LEGISLATURE-REGULAR SESSION
    If a state agency engages in any of the programs and activities named
in this subsection on an individual basis, it may do so only as the partici-
pation by that state agency is related to the management and control of
the solid waste over which it has jurisdiction. When the state agencies do
not participate jointly, they shall coordinate on any efforts undertaken by
either one individually so that similar programs and activities of the state
agencies will be compatible.
    (h) The state agencies are authorized to administer and expend state
funds provided to them by legislative appropriations, or otherwise, for
the purpose of making grants to local governments for solid waste plan-
ning, the installation of solid waste facilities, and the administration of
solid waste programs. The grants made under the terms of this Act
shall be distributed in a manner determined by the state agency to whom
the appropriation is made. Any financial assistance granted by the state
through either of the state agencies to any local government under the
terms of this Act must, at a minimum, be equally matched by local gov-
ernment funds.
    Sec. 5. (a) Every county has the solid waste management powers
which are enumerated in this Section 5. However, the exercise of the
licensing authority and other powers granted to counties by this Act
does not preclude the department or the board from exercising any of
the powers vested in the department or the board under other provisions
of this Act, including specifically the provisions authorizing the depart-
ment and the board to issue permits for the operation and maintenance
of sites for the disposal of solid waste. The powers specified in Sub-
sections (d), (e), and (g) of this section may not be exercised by a county
with respect to the industrial solid waste disposal practices and areas
to which Subsection (f) of Section 4 of this Act applies. The department
or the board, by specific action or directive, may supersede any authority
or power granted to or exercised by a county under this Act, but only
with respect to those matters which are, under this Act, within the juris-
diction of the state agency acting.
    (b) A county is authorized to appropriate and expend money from
its general revenues for the collection, handling, storage and disposal
of solid waste and for administering a solid waste program; and to
charge reasonable fees for the services.
    (c) A county may develop county solid waste plans and coordinate
those plans with the plans of local governments, regional planning agen-
cies, other governmental entities, the department, and the board.
    (d) Except as provided in Subsection (a) of this section, a county
is empowered to require and issue licenses authorizing and governing
the operation and maintenance of sites used for the disposal of solid
waste in areas not within the territorial limits of incorporated cities
and towns. If this power is exercised, the county shall prescribe the form
of and reasonable requirements for the license application and the pro-
cedures to be followed in processing the application, to the extent not
otherwise provided for in this subsection. The following additional
provisions apply if a county exercises the power authorized in this Sub-
section ( d) :
    (1) The county shall mail a copy of the license application or a sum-
mary of its contents to the department, the board, and the Texas Air
Control Board, and to the mayor and health authorities of any city
within whose extraterritorial jurisdiction the solid waste disposal site
is located. The governmental entities to whom the information is mailed
shall have a reasonable time, as prescribed by the county, to submit
                                   1324
              61ST LEGISLATURE-REGULAR SESSION                     Ch. 405
comments and recommendations on the license application before the
county acts on the application,
    (2) A separate license shall be issued for each site. The license shall
include the names and addresses of the person who owns the land where
the waste disposal site is located and the person who is or will be the
operator or person in charge of the site; a legal description of the land on
which the site is located; and the terms and conditions on which the
license is issued, including the duration of the license. The county is
authorized to charge a fee for a license of not to exceed $100.00, as set by
the commissioners court of the county. Receipts from the fees shall be
placed in the general revenue fund of the county.
    (3) The county may extend or renew any license it issues in accord-
ance with reasonable procedures prescribed by the county, The proce-
dures prescribed in Paragraph (1) of this Subsection (d) apply also to
applications to extend or renew a license.
    (4) No license for the use of a site for disposal of solid waste may be
issued, renewed, or extended without the prior approval, as appropriate,
of the department or the board, or the executive director of the board
when so authorized by the board. If a license is issued, renewed, or
extended by a county in accordance with this Subsection (d), the owner
or operator of the site does not need to obtain a permit from the depart-
ment or the board for the same site.
    (5) A license is issued in personam and does not attach to the realty
to which it relates. A license may not be transferred without prior notice
to and prior approval by the county which issued it.
    (6) The county has the authority, for good cause, after hearing with
notice to the licensee and to the governmental entities named in Para-
graph (1) of this Subsection (d), to revoke or amend any license it issues
for reasons pertaining to public health, air or water pollution, land use,
or violation of this Act or of any other applicable laws or regulations
controlling the disposal of solid waste. For like reasons, the department
and the board each may, for good cause, after hearing with notice to the
licensee, the county which issued the license, and the other governmental
entities named in Paragraph (1) of this Subsection (d), revoke or amend
any license issued by a county, but only as to those sites which fall, under
the terms of this Act, within the jurisdiction of the state agency acting.
    ( e) Subject to the limitation specified in Subsection (a) of this sec-
tion, a county may designate land areas not within the territorial limits
of incorporated cities and towns as suitable for use as solid waste dis-
posal sites. The county shall base these designations on the principles of
public health, safety, and welfare, including proper land use, compliance
with state statutes, the reasonable projections of growth and development
for any city or town within whose extraterritorial jurisdiction the land
area may be located, and any other pertinent considerations.
    (f) A county is authorized to enforce the requirements of this Act and
the rules and regulations promulgated by the department and the board as
related to the handling of solid waste.
    (g) Subject to the limitation prescribed in Subsection (a) of this
section, a county, acting through its commissioners court, may make reg-
ulations for the areas of the county not within the territorial limits of
incorporated cities and towns to provide for governing and controlling
solid waste collection, handling, storage and disposal. The regulations
shall not authorize any activity, method of operation or procedure which
is prohibited by this Act or by the rules and regulations of the department
or the board. The county shall not, in its regulations, under the licensing
                                   1325
Ch. 405       61ST LEGISLATURE-REGULAR SESSION
power granted in this Act, or otherwise, prohibit the use of a site within
the county for the disposal of solid waste on the basis that the solid waste
originates outside that county, or impose any unreasonable requirements
on the disposal of such solid waste in the county not warranted by the
circumstances. The county may institute legal proceedings to enforce its
regulations.
    (h) A county may enter into cooperative agreements with local gov-
ernments and other governmental entities for the purpose of the joint
operation of solid waste collection, handling, storage and disposal fa-
cilities, and to charge reasonable fees for the services.
    Sec. 6. This section applies to a political subdivision of the state
which has jurisdiction over two or more counties or parts of two or more
counties, and which has been granted the power by the Legislature to
regulate solid waste handling or disposal practices or activities within
its jurisdiction. The governing body of such a political subdivision may,
by formal resolution, assume for the political subdivision the exclusive
authority to exercise, within the area subject to its jurisdiction, the powers
granted in this Act to a county, to the exclusion of the exercise of the same
powers by the counties otherwise having jurisdiction over the area. In
the exercise of these powers the political subdivision is subject to the
same duties, limitations and restrictions applicable to counties under this
Act. When a political subdivision assumes this authority, it shall also
serve as the coordinator of solid waste handling and disposal practices
and activities for all cities, counties and other governmental entities with-
in its jurisdiction which have solid waste disposal regulatory powers or
engage in solid waste handling or disposal practices or activities. Once
a political subdivision assumes the authority granted in this section, it
is empowered to and shall exercise the authority so long as the resolution
of the political subdivision remains in effect.
    Sec. 7. The authorized agents or employees of the department, the
board, and local governments have the right to enter at all reasonable
times in or upon any property, whether public or private, within the gov-
ernmental entity's jurisdiction, including in the case of an incorporated
city or town its extraterritorial jurisdiction, for the purpose of inspecting
and investigating conditions relating to solid waste management and
control. Agents and employees shall not enter private property having
management in residence without notifying the management, or the
person in charge at the time, of their presence and exhibiting proper
credentials. The agents and employees shall observe the rules and regu-
lations of the establishment being inspected concerning safety, internal
security, and fire protection.
    Sec. 8. (a) No person may cause, suffer, allow or permit the col-
lection, storage, handling or disposal of solid waste, or the use or opera-
tion of a site for the disposal of solid waste, in violation of this Act or of
the rules, regulations, permits, licenses or other orders of the department
or the board, or a county or a political subdivision exercising the authority
granted in Section 6 of this Act within whose jurisdiction the violation
occurs.
    (b) Any person who violates any provision of this Act or of any rule,
regulation, permit, license, or other order of the department or the board,
or a county or a political subdivision exercising the authority granted in
Section 6 of this Act within whose jurisdiction the violation occurs, is
subject to a civil penalty of not less than $50.00 nor more than $1,000.00
for each act of violation and for each day of violation, as the court may
deem proper, to be recovered in the manner provided in this Section 8.
                                    1326
              61ST LEGISLATURE-REGULAR SESSION                       Ch. 405

    (c) Whenever it appears that a person has violated, or is violating
or threatening to violate, any provision of this Act, or of any rule, regula-
tion, permit, or other order of the department or the board, then the
department or the board, or the executive director of the board when so
authorized by the board, may cause a civil suit to be instituted in a district
court for injunctive relief to restrain the person from continuing the
violation or threat of violation, or for the assessment and recovery of a
civil penalty of not less than $50.00 nor more than $1,000.00 for each act
of violation and for each day of violation, as the court may deem proper,
or for both injunctive relief and civil penalty. Upon application for
injunctive relief and a finding that a person is violating or threatening
to violate any provision of this Act or any rule, regulation, permit, or other
order of the department or the board, the district court shall grant ap-
propriate injunctive relief. At the request of the department or the
board, or the executive director of the board when so authorized by the
board, the attorney general shall institute and conduct a suit in the name
of the State of Texas for injunctive relief or to recover the civil penalty,
or for both injunctive relief and penalty, as authorized in this subsection.
    (d) Whenever it appears that a violation or threat of violation of any
provision of this Act, or of any rule, regulation, permit, license, or other
order of the department, the board, a county, or a political subdivision
exercising the authority granted in Section 6 of this Act, has occurred or
is occurring within the jurisdiction of that county or political subdivision,
the county or political subdivision, in the same manner as the board and
the department, may cause a L,viJ suit to be instituted in a district court
through its own attorney for the injunctive relief or civil penalties, or
buth, as authorized in Subsection (c) of this section, against the person
who committed, is committing, or is threatening to commit, the violation.
    (e) Wheneve::r it appears that a violation or threat of violation of any
provision of this Act, or of any rule, regulation, permit, license, or other
order of the department, the board, a county, or a political subdivision
exercisin . r the authority granted in Section 6 of this Act, has occurred or
is occurring within the area of the extraterritorial jurisdiction of an
incorporated city or town, or is causing or will cause injury to or an
adverse effect on the health, welfare or physical property of the city or
town or its inhabitants, then the city or town, in the same manner as the
board and the department, may cause a civil suit to be instituted in a dis-
trict court through its own attorney for the injunctive relief or civil
penalties, or both, as authorized in Subsection ( c) of this section, against
the person who committed, is committing, or is threatening to commit, the
violation.
    (f) A suit for injunctive relief or for recovery of a civil penalty,
or for both injunctive relief and penalty, may be brought either in the
county where the defendant resides or in the county where the violation or
threat of violation occurs. In any suit brought to enjoin a violation or
threat of violation of this Act or of any rule, regulation, permit, license
or other order of the board, the department, a county, or a political
subdivision exercising the authority granted in Section 6 of this Act, the
court may grant the governmental en'.ity bringing the suit, without bond
or other undertaking, any prohibitory or mandatory injunction the facts
may warrant, including temporary restraining orders after notice and
hearing, temporary injunctions, and permanent injunction8.
    (g) In a suit brought by a local government under Subsection (d) or
 (e) of this section, the board and the department arc necessary and in-
dispensable parties.
                                    1327
Ch. 405        GIST LEGISLATURE-REGULAR SESSION

     (h) Any party to a suit may appeal from a final judgment as in other
civil cases.
     (i) All civil penalties recovered in suits instituted under this Act by
the State of Texas through the board or the department shall be paid to
the General Revenue Fund of the State of Texas. All civil penalties recov-
ered in suits first instituted by a local government or governments under
this Act shall be equally divided between the State of Texas on the one
hand and the local government or governments on the other, with 50 per
 cent of the recovery to be paid to the General Revenue Fund of the State
of Texas and the other 50 per cent equally to the local government or
governments first instituting the suit.
     Sec. 9. A person affected by any ruling, order, decision, or other act
of the department or the board may appeal by filing a petition in a dis-
trict court of Travis County. A person affected by any ruling, order,
decision, or other act of a county, or of a political subdivision exercising
the authority granted in Section 6 of this Act, may appeal by filing a
 petition in a district court having jurisdiction in the county or political
 subdivision. The petition must be filed within 30 days after the date of
 the action, ruling, order, or decision of the governmental entity complained
of. Service of citation must be accomplished within 30 days after the
date the petition is filed. The plaintiff shall pursue his action with rea-
sonable diligence. If the plaintiff does not prosecute his action within one
year after the action is filed, the court shall presume that the action has
been abandoned. The court shall dismiss the suit on a motion for dis-
missal made by the governmental entity whose action is appealed, unless
the plaintiff, after receiving due notice, can show good and sufficient
cause for the delay. In an appeal from an action by the department, the
board, a county, or a political subdivision exercising the authority granted
in Section 6 of this Act, the issue is whether the action is invalid, arbitrary
or unreasonable.
    Sec. 10. This Act is cumulative of and supplemental to any other
Jaws and parts of laws relating to the same subject and does not repeal
those other laws or parts of laws. Nothing in this Act diminishes or
limits, or is intended to diminish or limit, the authority of the department,
the board, the Texas Air Control Board, or local governments in perform-
ing any of the powers, functions, and duties vested in those governmental
entities by other law"
    Sec. 11. SeverabiiitY Clause. The provisions of this Act 11re sever-
able. If any word, phrase, clause, sentence, section, provision or part of
this Act should be held to be invalid or unconstitutional, it shall not
affect the validity of the remaining portions, and it is hereby declared
to be the legislative intent that this Act would have been passed as to
the remaining portions, regardless of the invalidity of any part.
    Sec. 12. Emergency Clause. The importance to the public of the
 amendments in this Act creates an emergency and imperative public
 necessity demanding the suspension of the Constitutional Rule requiring
 bills to be read on three several days in each House, and the same is
 hereby suspended; and this Act shall take effect and be in force from and
after its passage, and it is so enacted.
    Passed the Senate on April 1, 1969, by a viva voce vote; l\lay 23, 1969,
        Senate concurred in House amendments by a viva voce vote; passed
        the House on l\lay 22, 1969, with amendments, by a non-record vote.
     Approved June 2, 1969.
     Effective, Sept. 1, 1969, 90 days after date of adjournment.

                                    1328
                      APP. G

Act approved June 15, 1973, 63rd Leg., R.S., ch. 576,
 1973 Tex. Gen. Laws 1595 (current version at Tex.
Health & Safety Code Ann. § 361.003(24) (West 2010)
                 63rd LEGISLATURE-REGULAR SESSION                           Ch. 576

urban programming, nor shall this Act affect any institute for urban
studies conducted by other institutions of higher education.
   Sec. 3. The importance of this legislation and the crowded condition
of the calendars in both houses create an emergency and an imperative
public necessity that the constitutional rule requiring bills to be read on
three several days in each house be suspended, and this rule in hereby sus-
pended, and that this Act take effect and be in force from and after its
passage, and it is so enacted.
   Passed the senate on May 10, 1973: Yeas 31, Nays O; passed the house
      on May 25, 1973, by the following vote: Yeas 143, Nays 0, three
     present not voting.
   Approved June 15, 1973.
   Effective June 15, 1973.

  SOLID WASTE DISPOSAL-PERSON AFFECTED DEFINED
                                  CHAPTER 576

                                   S. B. No. 871
   An Act relating to defining the term ••person affected" and setting forth that
       definition; amending the Solid Waate Dlapoaal Act, aa amended (Ar·
       tlcle 4477-7, Vernon's Texaa Civil Statutes), by adding a new Sub.ectlon
       (13) to Section 2; and declaring an emergency.

Be it enacted by the Legislature of the State of Texas:
    Section 1. The Solid Waste Disposal Act, as amended (Article 4477
-7, Vernon's Texas Civil Statutes), is amended by adding 73 a new Subsec-
tion ( 13) to Section 2 to read as follows:
    "(13) 'Person affected' for the purpose of Section 9 hereof means any
person who is a resident of a county or any county adjacent or contiguous
to the county in which a site, facility or plant is to be located including any
person who is doing business or owns land in the county or adjacent or
contiguous county and any local government. Such person affected shall
also demonstrate that he has suffered or will suffer actual injury or eco-
nomic damage."
    Sec. 2. The importance of this legislation and the crowded condition
of the calendars in both houses create an emergency·and an imperative
public necessity that the constitutional rule requiring bills to be read on
three several days in each house be suspended, and this rule is hereby
suspended, and that this Act take effect and be in force from and after
its passage, and it is so enacted.
    Passed the senate on May 3, 1973: Yeas 31, Nays 0; May 21, 1973, sen-
       ate concurred in house amendments by a viva-voce vote;
    Passed the house, with amendments, on May 19, 1973 by a non-record
      vote.
    Approved June 15, 1973.
    Effective Aug. 27, 1973, 90 days after date of adjournment.
73. Vernon's Ann.Clv.St. nrt. 4477-7. § 2,
 subsec. (13).

                                        1595
                      APP. H

Act approved June 12, 1985, 69th Leg., R.S., ch. 566,
     1985 Tex. Gen. Laws 2166 (repealed 1989)
recodified by Act approved June 14, 1989, 71st Leg.,
      R.S., ch. 678, 1989 Tex. Gen. Laws 2230
CH 565, SEC 2                                               69th LEGIS-REGULAR SESSION
   (2)   Article S176, Revised Statutes;
   (3)   Article S177, Revised Statutes;
   (4)   Article 5178, Revised Statutes;
   (S)   Article Sl 78a, Revised Statutes; and
   (6)   Section 21.076, Education Code.
   SECTION 3. This Act takes effect September 1, 1985.
   SECTION 4, The importance of this legislation and the crowded condition of the calendars
in both houses create an emergency and an imperative public necessity that the constitutional
rule requiring bills to be read on three several days in each house be suspended, and this rule is
hereby suspended.
   Passed by the House on May 9, 1985, by a non-record vote; passed by the Senate on
        May 24, 1985, by the following vote: Yeas 29, Nays o.
   Approved: June 12, 1985
   Effective: August 26, 1985

                                          CHAPTER 566
                                          H.B. No. 2358

An Act relating to the regulation of the treatment, storage, management and disposal of hazardous
      waste and solid waste.

Be it enacted by the Legislature of the State of Texas:
   SECTION 1. Section 2, Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil
Statutes), is amended to reed as follows:
   Sec. 2. DEFINITIONS. As used in this Act, unless the context requires a different
definition:
   (I) "Administratively complete" means that a complete permit application form, as well as the
report and fees required to be submitted with a permit application, have been submitted to the
department or the department of water resources and the permit application is ready for technical
review in accordance with the rules of the department or department of water resources.
   (2) "Apparent recharge zone" means that recharge zone designated on maps prepared or
compiled by, and located in the offices of. the department of water resources.
   (3) "Board" means the Texas Water Development Board.
   (4) [~] "Board of health" means the Texas Board of Health.
   (5) (f3t) "Class I industrial solid waste" means any industrial solid waste designated as Class I
by the Executive Director of the Texas Department of Water Resources as any industrial solid
waste or mixture of industrial solid wastes which because of its concentration or physical or
chemical characteristics is toxic, corrosive, flammable, a strong sensitizer or irritant, a generator
of sudden pressure by decomposition, heat, or other means and may pose a substantial present or
potential danger to human health or the environment when improperly processed, stored,
transported, or otherwise managed, including hazardous industrial waste.
   (6) (f\t] "Commission" means the Texas Water Commission.
   (7) [(5t) "Commissioner" means the Commissioner of Health.
   (8) ((it] "Composting" means the controlled biological decomposition of organic solid waste
under aerobic conditions.
   (9) [(+t) "Department" means the Texas Department of Health.
   (10) [~) "Department of water resources" means the Texas Department of Water
Resources.
   (11) ((Qt] "Disposal" means the discharge, deposit, injection, dumping, spilling, leaking, or
placing of any solid waste or hazardous waste (whether containerized or uncontainerized) into or
on any land or water so that such solid waste or hazardous waste or any constituent thereof may
enter the environment or be emitted into the air or discharged into any waters, including
groundwaters.
   (12) "Environmental response law" means the federal Comprehensive Environmental Re-
sponse, Compensation and Liability Act of 1980 (Pub. L. No. 96-510).

                                                 2166
69th LEGIS-REGULAR SESSION                                                       CH 566, SEC 1
   (13) [f-M,}t) "Executive director" means the Executive Director of the Texas Department of
Water Resources.
   ( 14) [~] "Garbage" means solid waste consisting of putrescible animal and vegetable waste
materials resulting from the handling, preparation, cooking, and consumption of food, including
waste materials from markets, storage facilities, handling, and sale of produce and other food
products.
   (15) [~] "Hazardous waste" means any solid waste identified or listed as a hazardous waste
by the administrator of the United States Environmental Protection Agency (EPA) pursuant to
the federal Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act, 42 U.S.C. 6901 et seq., as amended.
   (16) (~] "Industrial solid waste" means solid waste resulting from or incidental to any
process of industry or manufacturing, or mining or agricultural operations.
   (17) (f"t) "Local government" means a county; an incorporated city or town; or a political
subdivision exercising the authority granted under Section 6 of this Act.
   (18) (fl-lij) "Management" means the systematic control of any or all of the following
activities of generation, source separation, collection, handling, storage, transportation, process-
ing, treatment, recovery, or disposal of solid waste.
   (19) (~] "Municipal solid waste" means solid waste resulting from or incidental to
municipal, community, commercial, institutional, and recreational activities including garbage,
rubbish, ashes, street cleanings, dead animals, abandoned automobiles, and all other solid waste
other than industrial solid waste.
   (20) "Notice of intent to file an application" means that notice filed pursuant to Section
4(e)(l2) of this Act.
   (21) (fl-!71) "Person" means individual, corporation, organization, government or governmen-
tal subdivision or agency, business trust, partnership, association, or any other legal entity.
   (22) [<+81) "Person affected" means any person who is a resident of a county or any county
adjacent or contiguous to the county in which a solid waste facility is to be located including any
person who is doing business or owns land in the county or adjacent or contiguous county and
any local government. Such person affected shall also demonstrate that he has suffered or will
suffer actual injury or economic damage.
   (23) (f-M,}t) "Processing" means the extraction of materials, transfer, volume reduction,
conversion to energy, or other separation and preparation of solid waste for reuse or disposal,
including the treatment or neutralization of hazardous waste, designed to change the physical,
chemical, or biological character or composition of any hazardous waste so as to neutralize such
waste, or so as to recover energy or material from the waste, or so as to render such waste
nonhazardous, or less hazardous; safer to transport, store. or dispose of; or amenable for
recovery, amenable for storage, or reduced in volume. Unless the state agency determines that
regulation of such activity under this Act is necessary to protect human health or the
environment, the definition of "processing" does nut include activities relating to those materials
exempted by the Administrator of the Environmental Protection Agency pursuant to the federal
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq., as amended.
   (24) [~] "Radioactive waste" means that waste which requires specific licensing under
Chapter 72, Acts of the 57th Legislature, Regular Session, 1961, as amended (Article 4590f,
Vernon's Texas Civil Statutes), and the rules adopted by the Texas Board of Health under that
law.
   (25) "Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging.
escaping, leaching. dumping. or disposing into the environment. but excludes:
   (A) a release that results in exposure to persons solely within a workplace, with respect to a
claim which those persons may assert against the employer of those persons;
   (B) emissions from the engine exhaust of a motor vehicle, rolling stock. aircraft, vessel, or
pipeline pumping station engine;
   (C) release of source, by-product, or special nur/ear material from a nuclear incident, as those
terms are defined in the Atomic Energy Act of 1954, as amended (42 U.S. C. 2011 et seq.) if the
release is subject to requirements with respect to financial protection established by the Nuclear
Regulatory Commission under Section 170 of that Act, or, for the purposes of Section 104 of the
environmental response law or any other response action, any release of source, by-product, or
special nuclear material from any processing site designated under Section /02(a)(l I or 302(a) of
the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7912 and 7942); and
   (D) the normal application offertilizer.
   (26) "Remedial action" means those actions consistent with a permanent remedy taken instead
of or in addition to removal actions in the event of a release or threatened release of a hazardous
waste into the eni•ironment to prevent or minimize the release of hazardous wastes so that they do

                                               2167
CH 566, SEC 1                                               69th LEGIS-REGULAR SESSION

not migrate to cause an imminent and substantial danger to present or future public health and
Slifety or the environment. The term includes such actions at the location of the release as storage,
confinement, perimeter protection using dikes, trenches, or ditches, clay cover, neutralization,
cleanup of released hazardous wastes or contaminated materials, recycling or reuse, diversion,
destruction, segregation of reactive wastes, dredging or excavations, repair or replacement of
leaking containers, collection of leachate and runoff. on-site treatment or incineration, provision of
alternate water supplies, and any monitoring reasonably required to assure that those actions
protect the public health and safety or the environment. The term includes the costs ofpermanent
relocation of residents and businesses and community facilities where the Administrator of the
United States Enl'ironmental Protection Agency or the executive director determines that a/one or
in combination with other measures this relocation is more cost effective than and environmentally
preferable to the transportation, storage, treatment, destruction, or secure disposition off site of
hazardous wastes or may otherwise be necessary to protect the public health or safety. The term
does not include off-site transport of hazardous wastes or the storage, treatment. destruction, or
secure disposition off site of the hazardous wastes or contaminated materials unless the
Administrator of the United States Environmental Protection Agency or the executive director
determines those actions:
    (A) are more cost effective than other remedial actions;
    (B) will create new capacity to manage, in compliance with Subtitle C of the federal Solid
Waste Disposal Act (42 U.S.C. 6921 et seq.), hazardous wastes in addition to those located at the
affected facility; or
    (C) are necessary to protect public health and safety or the environment from a present or
potential risk that may be created by further exposure to the continued presence of those wastes or
materials.
    (27) "Removal" means the cleanup or removal of released hazardous wastes from the
environment; the actions necessary to be taken in the event of the threat of release of hazardous
wastes into the environment; the actions necessary to monitor, assess, and eva/uatP the ,·e/ease or
threat of release of hazardous wastes; the disposal of removed material; or the taking of other
actions as may be necessary to prevent, minimize, or mitigate damage to the public health and
welfare or the environment that may otherwise result from a release or threat of release. The term
also includes security fencing or other measures to limit access, provision of alternate water
supplies, temporary evacuation and housing of threatened individuals not otherwise provided for,
action taken under Section /04(b) of the environmental response law, and any emergency
assistance that may be provided under the federal Disaster Relief Act of 1974 (42 U.S. C. 5121 et
seq.).
    (28) [~] "Rubbish" means nonputrescible solid waste (excluding ashes), consisting of both
combustible and noncombustible waste materials; combustible rubbish includes paper, rags,
cartons, wood, excelsior, furniture, rubber, plastics, yard trimmings, leaves, and similar
materials; noncombustible rubbish includes glass, crockery, tin cans, aluminum cans, metal
furniture, and like materials which will not bum at ordinary incinerator temperatures (I 600"F to
18Cl0°F).
   (29) (~] "Sanitary landfill" means a controlled area of land upon which solid waste is
disposed of in accordance with standards, rules, or orders established by the board of health or
the board.
    (30) (~] "Sludge" means any solid, semisolid, or liquid waste generated from a municipal,
commercial, or industrial wastewater treatment plant, water supply treatment plant, or air
pollution control facility exclusive of the treated effiuent from a wastewater treatment plant.
    (31) (~] "Solid waste" means any garbage, rubbish, sludge from a waste treatment plant,
water supply treatment plant or air pollution control facility, and other discarded material,
including solid, liquid, semisolid, or contained gaseous material resulting from industrial,
munici\)al, commercial, mining, and agricultural operations, and from community and
institutional activities, but does not include: (i) solid or dissolved material in domestic sewage,
or solid or dissolved material in irrigation return flows, or industrial discharges subject to
regulation by permit issued pursuant to Chapter 26, Water Code; (ii) soil, dirt, rock, sand and
other natural or man-made inert solid materials used to fill land if the object of the fill is to make
the land suitable for the construction of surface improvements; or (iii) waste materials which
result from activities associated with the exploration, development, or production of oil or gas
and are subject to control by the Texas Railroad Commission.
   (31) (~] "Solid waste facility" means all contiguous land, and structures, other appurte-
nances, and improvements on the land, used for processing, storing, or disposing of solid
waste. A facility may be publicly or privately owned and consist of several processing, storage,
or disposal operational units; e.g., one or more landfills, surface impoundments, or combinations
of them.

                                                2168
69tb LEGIS-REGULAR SESSION                                                           CH 566, SEC 2
     (33) (~] "Solid waste technician" means an individual who is trained in the practical
aspects of the design, operation, and maintenance of a solid waste facility in accordance with
standards, rules, or orders established by the board or board of health.
     (34) [~] "Storage" means the holding of solid waste for a temporary period, at the end of
which the solid waste is processed, disposed of, or stored elsewhere.
     SECTION 2. Section 3, Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil
Statutes), is amended by adding Subsections (e), (f), (g), and (h) to read as follows:
     (e)(J) In order to protect the public health and environment, it is declared to be the public
policy of this state that, in generating, treating, storing, and disposing of hazardous wastes,
preference shall be given to the following methods, to the maximum extent economically and
technologically feasible, in the order named:
     (A) minimization of waste production;
     (B) reuse and/or recycling of waste;
     (C) treatment to destroy hazardous characteristics;
     (D) treatment to reduce hazardous characteristics;
     (E) underground injection;
     (F) land disposal.
     (2) Jn the case of treatment to destroy hazardous characteristics described in Section J(e)( I )(C)
above, on-site destruction is preferred but must be evaluated in the context of other relevant factors
such as transportation hazard, distribution of risk, quality of destruction, operator capability, and
site suitability.
     (j) The department of water resources and the Railroad Commission of Texas shall jointly
prepare an exclusive list of activities which are associated with oil and gas exploration, development
and production and, hence, are exempted from regulation under this Act and the department of
 water resources' solid waste regulatory program. Such list shall be amended as necessary. Such
 list shall be a rule as that term is defined in Section 3(7) of the Administrative Procedure and
 Texas Register Act, as amended (Article 6252-13a, Vernon's Texas Civil Statutes).
     (g)(I) There is created the interagency coordination council which shall coordinate the activities
of its member agencies related to the regulation of solid waste and solid waste management
facilities and the enforcement of the applicable solid waste laws and regulations. The council shall
be comprised of the executive head or his/her designee of the following agencies:
     (A) the department of water resources;
     (B) the department;
     (C) the Texas Air Control Board,· and
     (D) the Railroad Commission of Texas. The representative from the department of water
 resources shall act as chairman of the council.
     (2) The council shall conduct meetings on at least a quarterly basis during which it shall review
 the solid waste regulatory and enforcement activities of the previous quarter and coordinate future
planned activities in the interest of efficiency and cooperation, including, but not limited to, the
consideration of the use of waste exchange programs,· the establishment of a clearinghouse for
scientific and engineering information "nd data concerning hazardous waste management; the
coordination of hazardous waste research and development activities; the coordination and
development of consistent agency rules relevant to regulation of hazardous waste activities; the
evaluation of means to assist small yuantity hazardous waste generators and affected communities
 in the effective and safe management and disposal of their regulated wastes; the assessment of any
pre-application yublic interactions with applicants to evaluate their effectiveness and to consider
development of rules to incorporate such activities if appropriate; the consideration of the use of
 incentives to encourage waste minimization, reuse, recycling, and the use of resource recovery and
detoxification equipment; and evaluation of the feasibility of household hazardous waste collection
and disposal programs. The chairman shall prepare a report summarizing each quarterly
 meeting. The report shall be submitted for approval by a majoritv of agencies represented by the
 council and shall be a public document.
     (h) The department and department of water resources shall submit a report to the presiding
 officers of the legislature and the governor on January I, 1987, and each two years thereafter,
providing the following information:
     (I) a summary of a performance report of the imposed hazardous waste permit and disposal
fees, if the fees are approved by the legislature, and related activities to determine the
 appropriateness of the fee structure;
     (2) an evaluation of progress made in accomplishing the public policy of the state in regard to
 the preference of waste management methods as set forth in Section (J)(e)( I) of this Act;
     (3) projections, for a period of three years from the due date of the report, of waste volumes by
 type of waste, disposition of wastes, and remaining capacity for the disposal of the wastes. The

                                                 2169
CH 566, SEC 2                                                  69th LEGIS-REGULAR SESSION

department and the department of water resources shall adopt rules requiring persons who
generate, store, treat, or dispose of hazardous waste to submit to the state agency of appropriate
jurisdiction on an annual basis reports detailing projections of waste volumes, disposition, and
remaining capacity, as it relates to each facility owned or operated by such persons, in order that
the state agencies may develop their report. The first report shall be submitted by March J, 1986,
and subsequent reports shall be submitted annually by March 1 thereafter.
    SECTION 3. Subsection (c), Section 4, Solid Waste Disposal Act (Article 4477-7, Vernon's
 Texas Civil Statutes), is amended to read as follows:
    (c) Each state agency may adopt and promulgate rules consistent with the general intent and
 purposes of this Act, and establish minimum standards of operation for all aspects of the
 management and control of the solid waste over which it has jurisdiction under this Act. In
 developing rules relating to hazardous waste, each state agency shall consult with the State Soil
 and Water Conservation Board, the Bureau of Economic Geology of The University of Texas at
 Austin, and other appropriate state sources. Each [W#hitt 6fte yeftt' e+teP ~ efleetive ~
 ef ~ ~ e&eft] state agency shall adopt rules that:
    ( 1) condition issuance of a permit for a new hazardous waste management facility or the areal
 expansion of an existing hazardous waste management facility on selection of a facility site that
 reasonably minimizes possible contamination of surface water and groundwater;
    (2) prohibit the issuance of a permit for a new hazaraous waste /and.fill or an areal expansion of
such a facility, if the landfill is to be located in the JOO-year floodplain existing prior to site
development unless the landfill is to be located in areas with flood depths less than three feet;
    (3) prohibit the issuance of a permit for a new hazardous waste management unit or an areal
 expansion of an existing hazardous waste management unit if the hazardous waste management
 unit is to be located in wetlands, as defined by the state agencies. For the purposes of this
paragraph, a "hazardous waste management unit" means a landfill, surface impoundment. land
 treatment facility, waste pile, or storage or processing facility, used to manage hazardous waste;
    (4) prohibit the issuance of a permit for a new hazardous waste landfill, land treatment facility,
surface impaundment, or waste pile, or areal expansion of such a facility, if the facility is to be
 located on the recharge zone of a sole source aquijer;
    (5) require applicants for a new hazardous waste landfill, land treatment facility or surface
impoundment which is to be located in the apparent recharge zone of a regional aquifer to prepare
and file a hydrogeologic report documenting the potential effects, if any, on the regional aquijer in
 the event of a release from the waste containment system;
    (6) prohibit the issuance of a permit for a new hazardous waste landfill or land treatment
facility or the areal expansion of such a facility if the boundary of such landfill or land treatment
facility is to be located within 1000 feet of an established residence, church, school, or dedicated
public park which is in use at the time the notice of intent to file a permit application is filed with
the state agency, or if no such notice is.filed, at the time the permit application is.filed with the state
agency;
    (7) define the characteristics that make other areas [tttt ttPeft] unsuitable for a hazardous
 waste management facility including, but not limited to, consideration of:
    (A) flood hazards;
    (B) discharge from or recharge to a groundwater aquifer; [M]
    (C) soil conditions;
    (D) areas of direct drainage within one mile of a lake used to supply public drinking water;
    (E) active geological processes;
    (F) coastal high hazard areas, such as areas subject to hurricane storm surge and shoreline
erosion; or
    (G) critical habitat of endangered species;
    (8) (~] prohibit issuance of a permit for a new hazardous waste management facility or an
areal expansion of an existing hazardous waste management facility if the facility is to be located
 in an area determined to be unsuitable under rules adopted by the agency pursuant to Paragraph
(7) unless the design, construction, and operational features of the facility will prevent adverse
effects from unsuitable site characteristics; [ftflEI]
    (9) require applicants for a new hazardous waste landfill filed after January I, 1986, to provide
an engineering report evaluating the benefits, if any, associated with the construction of the land.fill
above exi~ting grade at the proposed site, the costs associated with the above grade construction,
and the potential adverse effects, if any, which would be associated with the above grade
construction;
    (10) allow local governments to petition the appropriate state agency for a rule which restricts or
prohibits the siting of new hazardous waste disposal facilities or other new hazardous waste
management facilities in areas including, but not limited to. those meeting one or more of the

                                                   2170
69tb LEGIS-REGULAR SESSION                                                           CH 566, SEC 4
characteristics delineated in Paragraph (7); provided, however, that no rule adopted by a state
agency under this paragraph shall affect the siting of a new hazardous waste disposal facility or
other new hazardous waste management facility if an application or a notice of intent to file an
application with respect to such facility has been filed with the appropriate state agency prior to the
filing of a petition under this paragraph;
    (11) prohibit issuance of a permit for a new hazardous waste landfill or the areal expansion of
an existing hazardous waste landfill if there is a practical, economic, and feasible alternative to
such a landfill that is reasonably available to manage the types and classes of hazardous waste
 which might be disposed ofat the landfill;
    (12) [flt] require persons who generate, transport, process, store, or dispose of Class I
 industrial solid waste or hazardous waste to provide recordkeeping and use a manifest or other
 appropriate system to assure that such wastes are transported to a processing, storage, or
 disposal facility permitted or otherwise authorized for that purpose; and
    (13) prohibit the issuance of a permit for a new hazardous waste management unit if the
landfill is in a floodplain of a perennial stream subject to not less than one percent chance of
flooding in any year, delineated on a flood map adopted by the Federal Emergency Management
Agency after the effective date of this Act as zone Al-99, VO, or Vl-30; and this paragraph applies
only to units that receive hazardous waste for a fee.
    In adopting rules under Paragraphs (1)-(13) [~] of this section, the state agencies may
 distinguish between solid waste facilities based on type or hazard of hazardous wastes managed
 and the type of waste management method used. The minimum standards set by the department
of water resources for on-site storage of hazardous waste must be at least the minimum standards
set by the manufacturer of the chemical.
   SECTION 4, Paragraphs (I), (4), (6), and (10), Subsection (e), Section 4, Solid Waste
Disposal Act (Article 4477-7, Vernon's Texas Civil Statutes), are amended to read as follows:
   (1) When a permit application has been determined to be administratively complete, the [-Rte]
state agency to whom the permit application is submitted shall mail a copy of the application or
a summary of its contents to the Texas Air Control Board, to the other state agency, to the
mayor and health authorities of any city or town within whose territorial limits or
extraterritorial jurisdiction the solid waste facility is located, and to the county judge and health
authorities of the county in which the facility is located. The governmental entities to whom the
information is mailed shall have a reasonable time, as prescribed by the state agency to whom the
application was originally submitted, to present comments and recommendations on the permit
application before that state agency acts on the application.
   (4) Before a permit is issued, amended, extended, or renewed, the state agency to which the
application is submitted shall provide an opportunity for a hearing to the applicant and persons
affected; the state agency may also hold such a hearing upon its own motion.
   (A)(i) The owner or operator of a hazardous waste or solid waste management facility shall not
be required to obtain a permit for the storage, processing, treatment, disposal, or destruction of
solid waste or hazardous waste from any agency of the state other than the department or the
department of water resources unless a permit is required under the new source review
requirements of Part C or D of Title I of the federal Clean Air Act, 42 U.S. C. 7401 et seq., for a
major source or a major modification, or unless a permit is required by the Railroad Commission
of Texas under Chapter 27, Water Code; except with respect to major source.f or major
modifications described above, and except with respect to facilities required to be permitted by the
Railroad Commission of Texas under Chapter 27, Water Code, all participation in the review of a
permit application shall be through one agency hearing, which shall be the sole permit hearing and
which shall be conducted by either the department or the department of water resources as the lead
agency, in accordance with the division ofjurisdiction between them established in Section 3 of this
Act. The Texas Air Control Board and other agencies which might otherwise have jurisdiction for
permitting hazardous or solid waste facilities shall enter into joinl rules or memoranda of
agreement with the department or the department of water resources. Such joint rules or
memoranda of agreement shall include such criteria as the Texas Air Control Board or other
agency which might otherwise have jurisdiction may prescribe for use by the lead agency in
addressing the concerns of the Texas Air Control Board or other agency in the permitting
process. Such joint rules or memoranda shall at a minimum be consistent with applicable
requirements of the United States Environmental Protection Agency for state program authoriza-
tion under the federal Solid Waste Disposal Act as amended by the Resource Conservation and
Recovery Act, 42 U.S. C. 6901 et seq., as amended.
   (ii) It is the intent of the Legislature that to the extent possible in conformance with this subpart
(A). the lead agency shall defer to the policies, rules, and interpretations of the Texas Air Control
Board on the air quality impact of the proposed hazardous waste or solid waste management
activities, and that the Texas Air Control Board remain the principal authority of the state in

                                                 2171
CH 566, SEC 4                                                  69th LEGIS-REGULAR SESSION

 matters of air pollution control. The Texas Air Control Board shall be responsible for performing a
 technical review of the air quality aspects of an application for a solid waste or a hazardous waste
 management facility, which relate to the criteria established under (A}(i). It shall complete such
 review and shall forward all recommendations or proposed permit provisions to the lead agency
 within the time limits established in the rules of the lead agency for the completion of technical
 review of the application. The lead agency shall incorporate into its proposed action all
 recommendations or proposed permit provisions submitted by the Texas Air Control Board, unless
 such recommendation or proposed permit provisions are determined by the lead agency to be less
stringent than applicable requirements of the United States Environmental Protection Agency for
 state program authorization under the federal Solid Waste Disposal Act as amended by the
 Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., as amended. If the Texas Air
 Control Board's proposed permit provisions conflict with provisions proposed by the lead agency
 technical staff, the staffs of the two agencies shall attempt to resolve such conflict prior to the end of
 the technical review of the application. If no contested case hearing on the permit application is
 held by the lead agency, the recommendations or proposed permit provisions submitted by the
 Texas Air Control Board shall be incorporated into any permit issued by the lead agency. If a
contested case hearing is held. all evidence and testimony of the state regarding air quality aspects
of the application shall be developed and presented by the Texas Air Control Board. All parties,
 including the lead agency, shall have the right to cross-examine any testifying witnesses of the
 Texas Air Control Board. At the conclusion of the presentation of testimony, the hearings
examiner shall afford the Texas Air Control Board at least thirty (30) days in which to submit a set
of proposed findings of fact and conclusions of law and, if applicable, proposed permit language,
 respecting the air quality aspects of the application which relate to the criteria established under
 (A)(i), which shall be accepted by the hearings examiner and the final decision-making body of the
 lead agency unless such body finds that the recommendations of the Texas Air Control Board are
 not supported by a preponderance of the evidence. The Texas Air Control Board may seek judicial
 review of the air quality aspects of any final decision of the lead agency. Both the lead agency and
 the Texas Air Control Board shall have authority to enforce the terms of any permit issued by the
 lead agency which relate to air quality. Permit applications for hazardous waste or solid waste
 management facilities for which contested evidentiary hearings have commenced at the Texas Air
 Control Board prior to the effective date of this provision, or appeals from decisions of the Texas Air
 Control Board on such applications. shall not be affected by this subpart. An applicant may not
 withdraw a permit application to circumvent the intent of the preceding sentence. The Texas Air
 Control Board may delegate to its Executive Director any or all of the duties, responsibilities, or
authority conferred by this subpart (A).
    (ii0 After the lead agency has completed its technical review of the permit application. any
agency other than the Texas Air Control Board which might otherwise have jurisdiction for
permitting the facility and which has requested an opportunity to review the proposed lead agency
on the permit application shall have a period of twenty (20) calendar days from the end of the lead
agency's technical review period to review the proposed action and determine whether its concerns
have been adequately addressed. In the event such other agency determines its concerns have not
been adequately addressed, its sole remedy w1!h respect to permitting shall be to present its
concerns in the permit proceedings of the lead agency; and such other agency shall have the right to
request a hearing, to intervene as a matter of law, and to seek judicial review. In addition, such
other agency shall have the right to enforce the aspects of any lead agency permit which relate to its
jurisdiction.
    (iv) The provisions of this subpart (A) shall not apply to facilities which burn hazardous waste
 unless they are required to obtain a permit for such burning from the department or the
department of water resources under rules adopted by such agency pursuant to a state hazardous
 waste regulatory program.
    (v) Nothing herein shall be construed to abridge, modify. or restrict the authority of the
department or the department of water resources to promulgate rules under Section 4(c) of this
Act, to issue permits and to enforce the terms and conditions of such permits, relating to all aspects
of hazardous waste management, to the extent necessary for the department and the department of
water resources to receive and maintain state program authorization under Sect1011 3006 of the
federal Solid Waste Disposal Act, as ame11ded by the Resource Conservation and Recovery Act. 42
U.S. C. 6901 et seq.. as amended.
    (B) The state agency by rule shall establish procedures f,,r public notice and any public
 hearing authorized under this paragraph. To improve the timeliness of notice to the public
pertaining to any public hearing authorized under this paragraph. public notice of receipt of the
permit application shall be provided at the time a permit application is ruled administratively
complete by the department or the department of water resources. A hearing on a permit
 involving a solid waste facility for hazardous industrial solid waste must include one se)>sion held
 in the county in which the solicl waste facility is located. Hearings under thts paragraph shall be

                                                   2172
69th LEGIS-REGULAR SESSION                                                          CH 566, SEC 5
conducted in accordance with the hearing rules adopted by the state agency and the applicable
 provisions of the Admm1strat1ve Procedure and Texas Register Act, as amended (Article 6252-
 Ua, Vernon's Texas Civil Statutes).
    (6) If a permit 1s issued, amended, renewed, or extended by a state agency in accordance with
this Subsection (e), the owner or operator of the solid waste facility does not need to obtain a
 license for the same facility from a county, or from a pohtical subdivision exercising the
authority granted in Section 6 of this Act. Except as specifically provided in this Act. nothing in
this section shall limit the powers and duties of any local government or other political subdivision
of the state as vested under this or any other law; provided. however, that an applicant shall not be
required to obtain a permit for the siting. construction or operation of a hazardous waste
management facility from any local government or other political subdivision of the state, and no
local government or other political subdivision of the staie shall be empowered to adopt any rule,
regulation, or ordinance which conflicts with or is inconsistent with the requirements for hazardous
waste management facilities as specified in the rules of a state agency or any permit heretofore or
hereafter issued by the state agency. In any action to enforce a rule, regulation, or ordinance of a
local government or political subdivision, the burden shall be on the owner or operator of the
facility or on the applicant to demonstrate conflict or inconsist~mcy with state requirements. The
 validity or applicability of any such rule, regulation, or ordinance of a local government or a
political subdivision may be determined in an action for declaratory judgment pursuant to the
 Uniform Declaratory Judgments Act (Article 2524-1, Vernon's Texas Civil Statutes), if it is alleged
that the rule, regulation, or ordinance, or its threatened application, interferes with or impairs or
threatens to interfere with or impair the legal rights or privileges of the plaintiff regarding any
application for or the issuance of a permit for the siting, construction or operation of a hazardous
 waste management facility. The local government or political subdivision whose rule, regulation,
or ordinance is being questioned must be made a party to the action and the department or the
department of water resources shall be given written notice by certified mail of the pendency of any
such action and either the department or the department of water resources may become a party
thereto. A declaratory judgment may be rendered whether the plaintiff has requested the
department, the department of water resources, the local government or political subdivision or any
other court to pass on the validity or applicability of the rule, regulation, or ordinance in question.
 Nothing in this paragraph shall affect the power of local governments or political subdivisions to
adopt or enforce codes/or buildings.
    (IO) Each state agency may issue an emergency order, either mandatory or prohibitory in
 nature, regarding any activity of solid waste management within its jurisdiction, whether such
 activity 1s covered by a permit or not, if the state agency determines that an emergency exists
requiring immediate action to protect the public health and safety or the environment [#te
~ ff! erelltiAg M ~ etttt!te e11teAsir, e M 8e¥et'e ~re~erty ffllfftllge M eeeftefftie l6ss
t6 6tfte1.s M ff!~ tttt ilflffteffillte ~ sefl6tts tMettt t6 htt"ftftft H+e M ftettl.tk ttH6 ~
etheP ~reeeat1res 8'>'1lilllale t6 #te !ttMe ~ t6 reffteff)' M ~re 1·eftt #te eeet1rreAee ef
#te sittilltieA ~ ~ ift t1APellS8Allale aelttrJ. The order may be issued without notice and
 hearing, or with such notice and hearing as the state agency deems practicable under the
 circumstances.
    (i) If an emergency order is issued under this authorit} without a hearing, the issuing agency
 shall fix a time and place for a hearing to be held in accordance with the departmental rules by
 the state agency, so as to affirm, modify, or set aside the emergency order.
    (ii) The requirements of Paragraph (4) of this subsection relating to public notice do not apply
 to such a hearing, but such general notice of the hearmg shall be given in accordance with the
 departmental rules oft he state agency.
   SECTION 5. Subsection (e), Section 4, Solid Waste Disposal Act (Article 4477-7, Vernon's
Texas Civil Statutes), 1s amended by adding Paragraphs ( 11) and ( 12) to read as follow~:
   ( 11) Each state agency shall establish a procedure by rule for the state agency to prepare
compliance summaries relating to solid waste management activities of the applicant within the
jurisdiction of such state agency The compliance summaries shall be made available to the
applicant and any interested person after the lead agency has completed its technical review<>/ the
permit application and prior to the issuance of the public notice relating to an opportunity for a
hearing on the permit application. Evidence of compliance or noncompliance by an applicant fi>r a
solid waste facility with agency rules, permits or other orders relating to solid waste management
may be offered by any party at a hearing on the applicant's application and admitted into evidence
subject to applicable rule~ of evidence. All evidence admitted, including compliance history. shall
be considered by the agency in determining whether to issue, amend. extend or renew a permit.
   (I 2) The state agencies shall encourage applicant.1· for solid waste fac11it1e.1 under the
jurisdiction of the department or for hazardous waste management fac11itie.1 to enter into
agreements with affected persons through a local review committee process. During this proce.1·1,

                                                 2173
CH 566, SEC 5                                                 69th LEGIS-REGULAR SESSION
persons are encouraged to identify issues of concern and work with the applicant to resolve such
issues.
    (A) If an applicant decides to participate in a local review committee process, such applicant
shall file with the appropriate state agency a notice of intent to file an application, setting forth the
proposed location and type of hazardous waste management facility. If the proposed facility is to
be located within the corporate limits or the extraterritorial jurisdiction of a city, then a copy of the
 notice shall be delivered to the mayor of such city and the county judge. If the proposed facility is
 to be located in an unincorporated area of a county, then a copy of the notice shall be delivered to
the county judge. The filing of the notice with the appropriate state agency shall initiate the pre-
application review process.
    (B) Within fifteen (15) days after the filing of the notice of intent pursuant to Subparagraph (A)
of this paragraph, the local review committee shall be appointed. The state agencies shall adopt
rules relating to the composition and appointment of local review committees.
    (C) The local review committee shall meet within twenty-one (21) days after the filing of the
 notice pursuant to Subparagraph (A) of this paragraph. The pre-application review process shall
continue for a period of ninety (90) days unless the process is shortened or lengthened by mutual
agreement between the applicant and the local review committee.
    (D) Any person, other than the applicant, who has participated in the local review committee
process pursuant to this paragraph with respect to an application for a hazardous waste
management facility, may be awarded its reasonable costs or any part thereoffor technical studies
and reports and expert witnesses associated with the presentation of evidence at the public hearing
relating to issues raised by such per.mn in the local review committee process but which are still
unresolved at the time of the commencement of the hearing on the permit application if the
department or the department of water resources finds that such an award is appropriate; provided,
however, that the total award granted to all such persons by the state agency with respect to such
application may not exceed $25,000. In determining the appropriateness of surh an award. the
state agency shall consider the following:
    (i) whether the evidence or analysis provided through such studies, reports, and witnesses is
significant to the evaluation of the application;
    (ii) whether the evidence or analysis would otherwise not have been provided in the proceeding;
and
    (iii) whether the local review committee was established in accordance with the rules of the
department or department of water resources.
    (E) Except as provided in Subparagraph (I) of this paragraph, when an applicant has not
entered into a local review committee process, the state agency, in determining the appropriateness
of an award of costs pursuant to Subparagraph (D) of this paragraph, shall waive any requirement
that the person affected has participated in a local review committee process.
    (F) Costs awarded by the department or the department of water resources pursuant to
Subparagraph (D) of this paragraph shall be taxed against the applicant. Rules shall be
promulgated for the award of such costs. Judicial review of any award by the department or the
department of water resources shall be pursuant to the substantial evidence rule as provided by the
Administrative Procedure and Texas Register Act (Article 6252-1 Ja, Vernon's Texas Civil
Statutes).
    (G) A local review committee shall:
    (i) interact with the applicant in a structured manner during the pre-application review stage of
the permitting process and, if necessary, during the technical review stage of the permitting process,
to raise and attempt to resolve both technical and non-technical issues of concern; and
    (ii) produce a fact-finding report documenting resolved and unresolved issues and unanswered
questions. The applicant shall submit such report to the state agency with its permit application.
    (H) For the purposes of this paragraph, "participation in a local review process" is defined as a
good faith effort to identify issues of concern, describe them to the applicant through the local
review committee process, and attempt to resolve such issues prior to the commencement of the
hearing on the permit application. A person is not required lo be a member of a local review
committee in order to meet the test of ''participation in a local review process. "
    (/) If an applicant, after reasonable efforts to determine whether any local opposition exists to
its proposed facility including, but not limited to, discussing the proposed facility with the county
judge and other elected officials, does not enter into a local review committee process because of no
aPJ!arent opposition or because a local review commillee is not established despite the good faith
eJ]orts of the applicant, then such applicant shall not be subject to an award of costs pursuant to
Subparagraph (D) of this paragraph.
    (J) Paragraf!h (12) of Section 4(e) shall not apply to a solid waste or hazardous waste
 management jacility for which an application has been flied, or which has otherwise been
authorized to operate, as of the effective date of such paragraph.

                                                  2174
69th LEGIS-REGULAR SESSION                                                                CH 566, SEC 8

   SECTION 6. Subsection (1)(2), Section 4, Solid Wa~tc D1,po~al Act (Article 4477-7,
Vernon's Texa~ Civil Statutes), is amended to read a' follow':
   (2) No person ~hall process, store, or d1spo~e of ha1ardou' Imfit1.1tF111I '+f+ttff] wa~te' under
this subsection without having fir,t obtamed a harnrdou' wa1,te permit l''ued hy the
commission; provided, however, that any per,cm who ha' on or before November 19, 1980,
commenced on-site processmg, stormg or di,posmg of haT.ardou' wa,te under th1' ,uh,ectton
and who ha' filed a hazardou' waste permit application in accordance with the rule' of the hoard
may contmue to proces,, store, or dispose of hazardou' wa,te until 'uch time a' the commi,,ton
approves or demes the application. Upon Its own motton or the request of a perMm affected, the
comm1ss1on may hold a puhlic hearmg on an application for a hazardou' wa,te permit /11
accordance wllh Section 4(e}. The hoard by rule shall establish procedure' for public notice and
any public hearmg authorized by thi~ subsection. The commi"ion may mclude requirement' 111
the permit for any remedial acttons by the applicant that are determmed by the comm1,,1on to he
necessary to protect the pubhc health and ,afety and the environment
    SECTION 7. Sectton 4, Solid Wa1,te D1spo,al Act (Art11.:le 4477-7, Vernon'' Tcxa' C1v1I
Statutes), 1s amended hy adding Subsection (k) to read as follows·
    (k) The .Hate agencies shall provide by rule ji>r 111tert•1·1ed perm11.1 lo engage 111 ac11vit1e.1 wl11ch
involve lhe collectwn and d1.1posa/ of household matenal.1 which could be cla.1s1jied a.1 hazardou1
was/es. Such ru/e.1 shall .1pecifv any nece.l.\'arv requ1reme111.1 re/a1111g to the tra111111g of persons
involved 111 lhe collectton and disposal of such household ma1erwl.1. No person shall be liable jilr
damages as a remit of actwn.1 taken or omtlled 111 the course of adverti1·ing, promo1111g or
d1stribu11ng educational material.1 rela1111g to the collect um or divpma/ of such hrmvehold material.1
111 accordance with the rules of the slate agenq. Thi.1· shall not preclude lwhi/11y j(1r damage.1 as a
result ofgross negligence or 111te111wnal misconduc/ 011 the part oj .1uch a per.1011.
    SECTION 8. Sectwn 7, Solid Waste Disposal Act (Article 4477-7, Vernon'' Texa' Civil
 Statutes), is amended by redesignating ex1stmg Subsection (l') a' Suh,ectlon (d) and addmg
 Subsection' (c), (e), (f), and (g) to read as follows
    (c) Regulated hazardou.1 wa.\/e management and d11posal fac1/Jtu·.1 .1hall he 111.1pected
periodically by the department or department of water re.1·ource.1 a1 required by the U.S.
 Environmental Prolection Agency purmanl to 1he j(•deral Solid Waste D1.1pmal Ac/, a.1 amended by
 the Resource Conservatwn and Recovery Act, as amended. In supplementmg 1he1·e 111.1pl'Ct1011.1, lhe
department and the department of water resource.1 1·hall give prumty to i11.1pect111g and rei111pl'Ct111g
 those facilities, mc/uding generator.I, deemed most likely to be noncomp/Jant or movt /JJ..e/y to poll'
an environmental or public health threat, regardless of whether they are characterized a1 ma1or or
non-major facilities. The state agenrn•.1 may alw randomly perjbrm leu comprehensive chl'Cl...1 of
facilities to supplement the more comprehensive 111.1pec11on.1· required by the U.S Envmmmental
Protection Agency.
    (d) [~] Record' copied pursuant to Suhsectton (h) of th1~ 'ect1on 'hall he puhltc record,,
 except that, tf a showmg satisfactory to the comm1"ioner of the department or to the executive
 director 1~ made hy the owner of ~uch record~ that the record' would divulge trade secret~ if
 made publtc, then the department or the department of water re\ources 'hall con~1der 'uch
 copied record~ a' confidential. Nothmg 111 th1~ 'uh,ectlon shall require the department of water
 resources or the department to consider the composition or characten~t1c1, of 'oltd wa,te heing
 proces~ed, 'tored, disposed, or otherwise handled to he held confidential
    (e} The department and department of water re.10urce.1 1hall puh/11h a111111a/~1· beg11111111g in
January, 1986, a report to he known as the annual 111.1pectw11 report, which 1·hall \'Ummarize the
agency\ inspectwn .1trategy and the result.v oj all 111.1pfftw11.1 conducted d11m1g the prevwu1 ji1·ca/
year. and li.l·r hazardou~ wa1·1e trealment. 1torage and d1spo.1al faci!t11e.1 not 1111pected. Inc annual
111.1pectton report shall identify each hazardou.1 wa.1te fan/tty 111.1pffted and 1hall 111c/11de the
followmg mformatwn. a /1.11111g of tho1e fac1!tt1e.1 fim11d to he comp/111111 w11h all hazardou.1 wa1tc
regularwns. those facJ/11ie1 w11h only mmor or clerical vwlatw111, and tholl' jim11d to have
 l'Ubstantive, 11011-clerical vw/a/1011.1. In additwn, for .1Ul11ra1111vc', no11-clencal wolatw111, the report
shall 1de1111fv thc• vwlatw111 and el/her 1ummanze correct1v1· ac//011.1 or dncnhe tlw 1tat111 1~/
 unresolved vwlatio11.1.
    (/) The annual 111.vpectum report .1hall he .1Uhm11ted to the governor, lw11te11a11t gm•ern111" and
 1peakcr of the lwuve '/1u• I/ale age11cu•1 1hall provide 11ot1n• o/ the avaJ/ahJ/1t1' o/ the report l•v
puh!tca/1011ofnottce111 the l c•xa1 Register.
    (g) The report oj each I/ate agency 1hall 1dent1Jv tho1e ji1l'llt//1'1 lwv111g de1110111trated an
exemplary record of rnmp!tance over the prffedmg three-vear penod and th111e /al'llitu·1 which
have b£'£'11 ad1ud1cated dunng the precedmg three-year penod to have com1111tted 1Ub1ta1111vc>, non-
clencal vwlatwn.1 which have rt•.1Ulted 111 an actual re/eave of hazardo111 H•a11t· that P"'11'11ted an
1mm111ent and vuh.ltantwl endangerment to the p11h/1c health and 1a/etv or tlw 1·111·1r1111111c·111

                                                    2175
CH 566, SEC 9                                                69th LEGIS-REGULAR SESSION
     SECTION 9. Section 8, Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil
 Statutes), is amended by adding Subsections (g) and (h) to read as follows:
     (g) Imminent and Substantial Endangerment to the Public Health and Safety or the
 Environment.
     (/) Notwithstanding any other provision of this Act, wherever it appears there L1· an actual or
threatened release of solid waste that presents an imminent and substantial endangerment to the
public health and safety or the environment from a solid waste facility where solid waste 1s stored,
processed or disposed of or at any site where any one or more of such activities with respect to solid
 waste have been conducted in the past, regardless of whether such activity was lawful at the time,
then the deportment or the department of water resources, as appropriate, may issue an
administrative order to the persons identified in Paragraph (2) of this subsection restraining such
person or persons from allowing or continuing the release or threatened release and requiring those
persons to take actions necessary to provide and implement a cost effective and environmentally
sound remedial action plan designed to eliminate the release or threatened release. An
administrative order issued pursuant to this subsection shall be mailed to the persons identified in
the order by certified mail, return receipt requested, or may be delivered by hand delivery to the
persons identified in the order; or, upon failure of service of the order by certified mail or hand
delivery, such order may be served on such persons by publication one time in the Texas Register
and one time in a newspaper ofgeneral circulation in each county in which any of such persons had
his last known address. An administrative order under this subsection shall be an executive act
and shall not require prior notice or an adjudicative hearing before the state agency. Alternatively,
the department or department of water resources, as appropriate, may cause a civil suit to be
instituted in a district court in the county in which the actual release is occurring or threatened
release may occur for injunctive relief to restrain the person or persons, as identified in Paragraph
 (2) of this subsection, from allowing or continuing the release or threatened rr!lease and requiring
those persons to take actions necessary to provide and implement a cost effective and
environmentally sound remedial action plan designed to eliminate the release or threatened
release. The provisions of this subsection are cumulative of all other remedies and nothing in this
subsection exempts any person from complying with or being subject to any other provision of law.
     (2) The persons subject to this subsection, subject only to the defenses listed in Paragraph (3) of
this subsection, are as follows:
     (A) any owner or operator of a solid waste facility;
     (B) any person who at the time of processing, storage or disposal of any solid waste owned or
operated the solid waste facility;
     (C) any person who by contract, agreement, or otherwise, arranged for the processing, storage or
disposal, or arranged with a transporter for transport for processing, storage or risposal of solid
waste owned or possessed by such person, by any other party or entity, at the solid waste facility
owned or operated by another party or entity and containing such solid waste, or at the site to which
such solid waste was transported and which site contains such solid wastes; and
     (D) any person who accepts or accepted any solid waste for transport to a solid waste facility or
site selected by such person, from which there is a release or threatened release of a solid waste
which presents an imminent and substantial endangerment to the public health and safety or the
environment.
     (3) The persons identified in Paragraph (2) of this subsection shall be liable under Paragraph
 ( 1) of this subsection unless such person can establish by a preponderance of the evidence that the
release or threatened release was caused solely by:
     (A) an act of God;
     (B) an act of war;
     (C) an act or omission of a third party other than an employee or agent of the defendant or
other than one whose act or omission occurs in connection with a contractual relatio11ship. existi11g
directly or indirectly, with the defe11dant (except where the sole co11tractual arra11gement arises
from a published tariff and accepta11ce for carriage by a common carrier by rail}, if the defe11dant
establishes by a prepondera11ce of the evidence that (i) he exercised due care with respect to the
solid wastes concerned, taking i11to consideration the characteristics of such solid wastes, in light of
all relevant facts and circumstances, and (ii) he took precautio11.1 against foreseeahle acts or
omissions of any such third party and the consequences that could foreseeably result from such act.1
or omissions; or
     (D) any combination of the foregoing paragraphs.
     (4) Where the release or threatened release caused by a persons acts or omissions is proved by a
preponderance of the evidence to be divisible, that person shall be liable only for the eliminatw11 of
that release or threatened release attributable to him. Where the release or threatened release is
not proved to be divisible, all persons liable under Paragraph ( 1) shall be jointly and severally lwble
for eliminating the release or threatened release. For purposes of this sectum "divisible" mea11s

                                                 2176
69th LEGIS-REGULAR SESSION                                                          CH 566, SEC 11

that the waste released or threatened to be released has been and is capable of being managed
separately under the remedial action plan.
   (5) When fewer than all of the parties identified in this subsection agree with the state to take
remedial action to abate an actual or threatened release of solid waste that is an imminent and
substantial endangerment to the public health and safety or the environment pursuant to an
administrative order issued under this section or an action filed by the state, the state may seek a
judgment against the non-settling parties for the total amount of the cost of the remedial action
minus that amount agreed to be paid or expended by any settling parties. In any action for
contribution brought by a non-settling party against a settling party, the non-settling party shall
have the burden to prove that the amount of cleanup costs agreed to be paid by a settling party
pursuant to an agreement with the state was unreasonable considering the factors delineated in
Section I /(a) and the need to undertake timely cleanup action with respect to the release or
threatened release.
   SECTION 10. Section 8, Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil
Statutes), is amended by adding Subsection (h) to read as follows:
   (h) A state agency contracting for services or products shall take into consideration whether the
person proposing to contract with the state has been adjudicated during the preceding three-year
period to have committed substantive, non-clerical violations which have resulted in an actual
release of hazardous waste that presented an imminent and substantial endangerment to the public
health and safety or the environment.
    SECTION 11. Section 9, Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil
 Statutes), is amended to read as follows:
    Sec. 9. APPEALS.· JOINDER. (a) A person affected by any ruling, order, decision, or other
 act of the department or the department of water resources may appeal by filing a petition in a
 district court of Travis County. A person affected by any ruling, order, decision, or other act of
 a county, or of a political subdivision exercising the authority granted in Section 6 of this Act,
 may appeal by filing a petition in a district court having jurisdiction in the county or political
 subdivision. Except as provided in Section 9(b), the [=Rte] petition must be filed within 30 days
 after the date of the action, ruling, order, or decision of the governmental entity complained
 of. Service of citation must be accomplished within 30 days after the date the petition is filed.
Any person filing a petition appealing an administrative order issued pursuant to Section 8(g) must
join as parties the state agency issuing the administrative order and may join as parties any other
person named in the administrative order and any other person who is or may be liable for the
elimination of the actual or threatened release of solid waste governed by the administrative
order. The plaintiff shall pursue his action with reasonable diligence. If the plaintiff does not
 prosecute his action within one year after the action is filed, the court shall presume that the
 action has been abandoned. The court shall dismiss the suit on a motion for dismissal made by
 the governmental entity whose action is appealed, unless the plaintiff, after receiving due notice,
 can show good and sufficient cause for the delay. Except as provided in Section 9(c), in [ltt] an
 appeal from an action of the department, the department of water resources, a county, or a
 political subdivision exercising the authority granted in Section 6 of this Act, the issue is whether
 the action is invalid, arbitrary or unreasonable.
    (b) The filing of a petition appealing an order issued pursuant to Section 8(g) within 45 days
after the date of receipt, hand delivery, or publication service of the order shall stay the
administrative order as to the appealing party pending action by the district court. However, the
filing of the petition shall not affect any other enforcement powers of the department or department
of water resources. An order issued pursuant to Section 8(g) shall become final as to non-appealing
parties 45 days after the date of receipt, hand delivery, or publication service of the order by, to, or
 upon such non-appealing parties.
    (c) The district court shall uphold an administrative order issued pursuant to Section 8(g) if the
department or department of water resources, by a preponderance of the evidence, proves:
    (I) that there is an actual or threatened release of solid waste that is an imminent and
substantial endangerment to the public health and safety or the environment; and
    (2) that the person made subject to the administrative order is liable for the elimination of the
 release or threatened release, in whole or in part.
    (d) Any person made a party to an appeal of an administrative order issued pursuant to Section
 8(g) may join as parties any other persons who are or may be liable for the elimination of the
 release or threatened release, in whole or in part.
    (e) Failure by any party to file an action for contribution and/or indemnity in an appeal
proceeding relating to an administrative order issued pursuant to Section 8(g) shall not constitute a
 waiver of any rights under this Act or any other provision of law.

                                                  2177
CH 566, SEC 11                                               69th LEGIS-REGULAR SESSION
   (j) In appeals of an administrative order issued pursuant to Section 8(g), the district court upon
establishing the validity of the order, shall issue an injunction requiring all persons named or joined
against whom liability has been established by the department or department of water resources or
any other party to comply with the terms of the administrative order.
   (g) As between parties determined to be liable pursuant to Section 8(g). the court may, as equity
requires, apportion cleanup costs in accordance with the provisions of Section I !(a) and grant any
other appropriate relief
   SECTION 12. The Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil Statutes)
ia amended by adding Sections 10, 11, 12, and 13 to read as follows:
   Sec. JO. JOINDER OF PARTIES IN ACTIONS FILED BY THE STATE. (a) Jn any action
brought by the attorney general under Section 8(g) of this Act seeking an injunction to eliminate a
release or threatened release, the attorney general shall, and any party may. join as parties all
persons reasonably believed to be liable for the release or threatened release in accordance with
Section B(g)(J) of this Act.
    (b) Failure of the attorney general or any party to name or join a person as a party shall not be a
defense to any action against that person for contribution and/or indemnity.
    (c) In any action brought by the attorney general under Section 8(g) the district court shall
grant reliefon the same basis as provided in Sections 9(c), (j) and (g) of this Act.
   Sec. 11. COST RECOVERY. (a) Apportionment of costs for the elimination of a release or
threatened release of solid waste shall be in accordance with the fo/lowing/:actors (provided,
however, that such apportionment shall only adjust the rights ofparties identifie in Section 8{g)(2)
among themselves, and shall not affect their liability to the State): (l) the relationship between the
parties' actions in storing, processing and disposal of solid waste and the remedy required to
eliminate the release or threatened release; (2) the volume of solid waste each party is responsible
for at the solid waste facility or site to the extent that the costs of the remedy are based on the
 volume of solid waste present; (3) consideration of toxicity or other waste characteristics if these
characteristics affect the cost of elimination of the release or threatened release; and (4) a_party's
cooperation with state agencies, its cooperation or noncooperation with the pending efforts to
eliminate the release or threatened release, or a party's actions regarding the processing, storage or
disposal of solid waste, as well as the degree of care which the party exercised.
    (b) Persons subject to a court injunction or an administrative order issued pursuant to this Act,
or those third parties identified in Section 13(g) who take action to eliminate a release or
threatened release, in addition to having the right to file an action for contribution and/or
indemnity in an appeal proceeding or in an action brought by the attorney general, may bring suit
in the district court of the county where the release or threatened release is or was located or in such
other county where venue would be proper under Article 1995, Revised Statutes, for cost recovery
against any other person who is or may be liable if the persons seeking cost recovery made
reasonable attempts to notify the persons against whom recovery is sought (i) of the existence of the
release or threatened release and (ii) that the person seeking cost recovery intended to take steps to
eliminate the release or threatened release. Any fact determination or ruling by a district court in
an appeal of an administrative order under Section 9(b) shall not constitute res judicata or
collateral estoppel as to any issue brought in a proceeding under this subsection with respect to any
party not joined in such appeal.
    (c)(J) For suits seeking cost recovery under Section l l(b), the court shall determine the amount
ofcost recovery based on the criteria listed in Section 1J(a).
   (2) Recoverable costs under this section may include not only the costs incurred in eliminating
the release or threatened release, but also such other costs as the court. in its discretion, may deem
reasonable to award.
   Sec. 12. CREATION OF RIGHTS. The provisions of Section 8(g) and the provisions of Section
 1J(b) and the enforcement by the department or department of water resources of such provisions
shall not create any rights or causes of action on behalf of any person other than those specifically
and expressly stated herein or change any common law or rule of decision except as limited in this
Act to actions by the department or department of water resources for the elimination of an actual
release or threatened release of solid waste that is an imminent and substantial endangerment to
the public health and safety or the environment.
   Sec. 13. IDENTIFICATION AND ASSESSMENT OF HAZARDOUS WASTE FACILI-
 TIES. (a) The department of water resources, in cooperation with the department, shall conduct
and complete a survey of the state by July I, 1986, the purpose of which is to identify to the extent
feasible every hazardous waste facility which may constitute an imminent and substantial
endanferment to public health and safety or the environment. The work already performed to
identify candidate sites for inclusion in the federal National Priorities list shall serve as the basis
for such a survey. As soon as possible after completion of a draft survey, the department of water
resources shall conduct a public hearing to solicit comments on the draft survey and information

                                                 2178
69th LEGIS-REGULAR SESSION                                                           CH 566, SEC 12
on additional candidate sites. Not later than January I, 1987, the department of water resources
shall publish a registry identifying each facility listed by the survey, the relative priority of the need
for action at each facility to remedy environmental and health problems resulting from the
presence of hazardous wastes at such facilities, and setting forth recommendations for actions
 which may be pursued to achieve effective, efficient, and timely cleanup or other resolution of the
problems identified for each facility. Such recommendations shall not constitute the remedial
investigation/feasibility study for the relevant facility, but shall form the preliminary basis for such
a study. The cleanup of such facilities shall be achieved first by private party funding, second with
 the aid offederal funds, and third, if necessary, with state funds from the hazardous waste permit
and disposal fee, if the fee is approved by the legislature. A draft copy of the registry shall be
circulated to the department for comment prior to publication. Three copies of the registry. as
published. shall be delivered to the Office of the Governor.
    (b)(/) The department of water resources may conduct investigations of the facilities listed in
the registry and may investigate areas or sites which it has reason to believe should be included in
the registry. in accordance with Section 7 of this Act.
    (2) The department of water resources shall. as part of the registry, assess by January /, 1987,
and each year thereafter, and. based upon new information received from sources including but not
limited to public hearings. reassess, in cooperation with the department, the relative priority of the
need for action at each facility listed in the registry to remedy environmental and health problems
resulting from the presence of hazardous wastes at such facilities.
    (c) The department of water resources shall update the registry periodically to add facilities
 which may constitute an imminent and substantial endangerment to public health and safety or
the environment and to delete facilities which have been cleaned up pursuant to Subsection (g) of
this section or delisted pursuant to Subsection (e) of this section.
    (d) The department of water resources shall file an affidavit or notice in the real property
 records of the county in which a facility is located identifying those facilities included in the
registry, as well as those facilities deleted from the registry.
    (e)(l) Within thirty (30) days after the survey pursuant to Subsection (a) of this section is
completed. the department of water resources shall notify in writing the parties identified as
responsible for all or any part of each facility or area included in the registry prepared pursuant to
such Subsection (a) of the inclusion of the facility or area on such survey. Thereafter, two months
before any unincluded facility or area is added to the registry, the department of water resources
shall notify in writing the parties identified as responsible for all or any part of such facility or area
of the contemplated inclusion of such facility or area on such registry. Written notifications under
this subsection shall be by certified mail, return receipt requested, by mailing notice to each such
named responsible party at the party's last know" address.
    (2) Notice pursuant to Paragraph (/) of this subsection shall include but not be limited to a
description of the duties and restrictions imposed by Subsection (j) of this section.
    (3) Non-receipt of any notice mailed to a named responsible party pursuant to this subsection
shall in no way affect the responsibilities. duties or liabilities imposed on any such party.
    (4) Any owner or operator or other named responsible party of a facility listed or to be listed in
the registry of the deportment of water resources pursuant to this section may request the
department of water resources to delete such facility from the registry, modify the facility'.~ priority
 within the registry or modify any information regarding such facility by submitting a written
statement setting forth the grounds of the request in such form as the department of water
resources may require.
    (5) Within one hundred and eighty (180) days after the effective date of this provision, the
department of water resources shall propose rules establishing procedures, including public
hearings, for review of delisting requests submitted pursuant to this subsection.
    (j)(l) Subsequent to the listing of a facility on the registry prepared and maintained by the
department of water resources. no person may substantially change the manner in which the
facility is used without notifying the department of water resources and n·ceiving written approval
of the department of water resources for such change. A substantial change of use shall be defined
in rules adopted by the board and shall include, but not be limited to, actions such as the erection
of a building or other structure at such facility, the use of such facility for agricultural production,
the paving of such facility for use as a roadway or parking lot, and the creation of a park or other
public or private recreational facility on such facility. Such notice shall be ifl writ mg, addressed to
the executive director and shall include a brief descriptiofl of the proposed change of use. Such
notice shall be submitted in writing at least sixty days before any physical alteration of the land or
construction will occur or, in the event any alteration or construction is not required to iflitiate such
change of use, at least sixty days before any change of use.
    (2) The executive director shall not approve such change of use if such new usc will interfere
significantly with a proposed, ongoing or completed hazartlous waste facility remedial actiofl

                                                  2179
CH 566, SEC U                                               69th LEGIS-REGULAR SESSION

program at such facility or expose the environment or public health to a significantly increased
 threat of harm.
    (g)(I) The cleanup of a facility identified by the department of water resources in the registry
 which constitutes an imminent and substantial endangerment to the public health and safety or the
environment shall proceed on an expedited basis pursuant to the following guidelines:
    (A) wherever possible, parties identified as liable parties pursuant to Section 8(g)(/} lhould be
notified by the department of water resources of an opportunity to participate in a voluntary
cleanup of the facility;
    (B) if all persons liable under Section 8(g)(J) do not volunteer to develop and implement a
remedial action program for the facility. then private parties who are willing to participate in
cleanup activitir!s voluntarily should be allowed to do so and they may seek cost recovery pursuant
 to Section I I (b) from those liable parties not participating in the voluntary cleanup;
    (C) if no parties identified as liable under Section 8(g)( I) volunteer to develop and implement a
 remedial action program for the facilitf. then independent third parties who ore willing to
participate voluntarily in the cleanup of the facility should be permitted to contract with the
department of water resources to do so and they may seek cost recovery pursuant to Section I J(b)
from those liable parties not participating in the voluntary cleanup;
    (D) where voluntary assistance from the private sector is not forthcoming, federal funds should
be used for facility cleanup if such funds are timely available; and
    (E) state funds should be used only when a liable party or independent third party cleanup or
federal funds are not timely available.
    (2) Whenever the department of water resources finds that there exists an actual or threatened
 release of hazardous wastes at a hazardous waste facility listed on the registry that presents an
imminent and substantial endangerment to the public health and safety or the environment, it may
order the owner and/or operator ofsuch facility and/or any otherferson responsible for the release
or threatened release at such facility (A) to develop a remedia action program, subject to the
approval of the department of water resources, al such facility, and (B) to implement such
program within reasonable time limits specified in the order. The provisions in Sections 8(g), 9, JO
and I I of this Act relating to administrative orders shall apply to orders issued pursuant lo this
paragraph.
    (3) Whenever the department of water resources, after investigation, finds that there exists a
 release or threatened release of hazardous wastes at a facility identified in the registry that:
    (A) is causing irreversible or irreparable harm to the public health and safety or the
environment; and
    (B) the immediacy of the situation makes it prejudicial to the public interest to delay action
 until an administrative order con be issued to liable parties pursuant to Paragraph (2) of this
subsection or until a judgment can be entered in an appeal of an administrative order; the
department of water resources may, with the funds available to the department of water resources
from the hazardous waste permit and disposal fees, if approved by the Legislature. undertake
immediate removal action at the facility to alleviate the harm. After the immediate danger of
 irreversible or irreparable harm has been alleviated, the department of water resources shall
proceed pursuant to Paragraph (2) of this subsection. Findings required pursuant to this paragraph
shall be in writing and may be made by the department of water resources on an ex parte basis
subject to judicial review pursuant to the substantial evidence rule as provided by the
Administrative Procedure and Texas Register Act (Article 6252-/Ja, Vernon's Texas Civil
Statutes).
    (4) Whenever a person ordered to eliminate an imminent and substantial endangerment to the
public health and safety or the environment has failed lo do so within the time limits specified in
 the order, and no third party has agreed to develop and implement a remedwl action program for
 the facility pursuant to Paragraph (I )(C) of this .Yubsection, the department of water resources may
develop and implement a remedial action program for such facility. The reasonable expenses of
developing and implementing such remedial action program by the department of water resources
shall be paid by the persons to whom the order was issued and the state may seek to recover such
 reasonable expenses in any court of appropriate jurisdiction. Any action instituted by the
department of waler resources pursuant to this paragraph shall be subject to the provisions of
Sections 8(g), 9, JO. and// of this Act.
    (5) In the event that the department of water resources has found that there exists a release or
 threatened release of hazardous wastes at a facility on the registry which presents an imminent and
substantial endangerment to the public health and safety or the environment but, after a
 reasonable allempt to determine who may be liable for such release or threatened release in
accordance with Section 8(g}, is either unable to determine who may be liable, or 1:1· unable to
 locate a person who may be liable, and no independent third party agrees to develop and
 implement a remedial action program for the facility in accordance with Paragraph (I )(C) of this

                                                2180
69th LEGIS-REGULAR SESSION                                                            CH 566, SEC 12
subsection, the department of water resources may develop and implement a remedial action
program for such facility. Federal funds shall be used for such cleanup to the maximum extent
timely available in accordance with Paragraph (I )(D) of this subsection. The department of water
resources shall make every effort to secure appropriate relief from any person subsequently
identified or located who is liable for the release or threatened release of hazardous waste at such
facility, including, but not limited to, development and implementation of a remedial action
program, payment of the cost of such a program and recovery of any reasonable expenses incurred
by the state.
    (6) The gual of any remedial action program shall be the elimination of the imminent and
substantial endangerment to the public health and safety or the environment posed by a release or
threatened release of hazardous wastes at a facility. The appropriate extent of remedy at any
particular facility shall be determined by the department of wmer resources' selection of the
remedial alternative which the state agency determines is cost effective (i.e., the lowest cost
alternative that is technologically feasible and reliable and which effectively mitigatel and
minimizes damage to and provides adequate protection of the public health and safety or the
environment).
    (7) All cleanup costs for which a person is liable to the state shall constitute a lien in favor of the
state on the real property and the rights to such real property that are subject to or affected by a
cleanup action.
    (A) The lien imposed by this paragraph shall arise and attach to the real property subject to or
affected by a cleanup action at the time an affidavit is recorded and indexed in accordance with
this paragraph in the county in which such real property is located. For the purpose of determining
rights of all affected parties, the lien shall not relate back to a time prior to the date on which the
affidavit is recorded, which date shall be the lien inception date. The lien shall continue until the
liability for the costs is satisfied or becomes unenforceable through operation of law.
    (B) The affidavit shall be executed by an authorized representative of the department of water
resources and must show:
    (i) the names and addresses of the persons liable for such costs;
    (ii) a description of the real property that is subject to or affected by the cleanup action for the
costs or claims; and
    (iii) the amount of the costs and the balance due.
    (C) The county clerk shall record the affidavit in records kept for that purpose and shall index
 the affidavit under the names of the persons liable for such costs.
    (D) The department of water resources shall record a relinquishment or satisfaction of the lien
 when the lien is paid or satisfied.
    (E) The lien may be foreclosed only on judgment of a court of competent jurisdiction
foreclosing the lien and ordering the sale of the property subject to the lien.
    (F) The lien imposed by this paragraph shall not be valid or enforceable if'
    (i) real property or an interest therein, or
    (ii) a mortgage, lien, or other encumbrance upon or against real property, is acquired before the
affidavit is recorded unless the person acquiring the real property or an interest therein or acquiring
 the mortgage, lien or other encumbrance thereon had or reasonably should have had actual notice
or knowledge that the real property is subject to or affected by a clean-up action. or has knowledge
 that the state has incurred clean-up costs.
    (G) If a lien is fixed or attempted to be fixed as provided in this paragraph. the owner of the real
property affected by the lien may file a bond to indemnify against the lien. The bond shall be filed
 with the county clerk of the county in which the real property subject to the lien is located. An
action to establish, enforce, or foreclose any lien or claim of lien covered by the bond must be
 brought not later than the 30th day after the date of service of notice of the bond.
    (H) The bond must:
    (i) describe the real property upon which the lien is claimed;
    (ii) refer to the lien claimed in a manner sufficient to identify it;
    (iii) be in an amount double the amount of the lien referred to;
    (iv) be payable to the department of water resources;
    (v) be executed by the party filing the bond as principal, and a corporate surety authorized
 under the law of this state to execute the /J.rmd as surety; and
    (vi) be conditioned substantially that the principal and sureties will pay to the department of
 water resources the amount of the /ten claimed, plus costs. if the claim IS proved to be a lien on the
 real property.
    {/) After the bond is filed, the county clerk shall issue notice of the bond to the named
 obligee. A copy of the bond must be attached to the notice. The notice may be served on each
 obligee by having a copy delivered to the obligee by any permn competent to mak1• oath of the

                                                   2181
CH 566, SEC 12                                              69th LEGIS-REGULAR SESSION

deli~ry.   The oriJinal notice shall be returned to the office of the county clerk, and the person
making service ofcopy shall make an oath on the back of the copies showing on whom and on what
date the copies were served. The county clerk shall record the bond notice and return in records
kept for that purpose. In acquiring an interest in real property, a purchaser or lender may rely on
and is absolutely protected by the record of the bond, notice, and return.
   (J) The department of water resources may sue on the bond after the 30th day following the
date on which the notice is served, but may not sue on the bond later than one year after the date
on which the notice is served. If the department of water resources recovers in a suit on the lien or
on the bond, it is entitled to also recover a reasonable attorney's fee.
   (8) Money for actions taken or to be taken by the department of water resources in connection
with the elimination of an imminent and substantial endangerment to the public health and safety
or the environment pursuant to this section shall be payable directly to the agency from the
hazardous waste permit and disposal fees, if approved by the legislature. This includes any costs of
inspection or sampling and laboratory analysis of wastes, soils. air, surface water and groundwater
done on behalfof a state agency.
   (9) The department of water resources shall seek private party cleanup of facilities prior to
expenditure of federal or state funds for such cleanups. Private parties shall coordinate with
ongoing federal and/or state hazardous waste programs and obtain necessary approvals for any
such cleanup actions. No action taken by any such person to contain or remove a release or
threatened release in accordance with an approved remedial action plan shall be construed as an
admission of liability for said release or threatened release. No person who renders assistance in
containing or removing a release or threatened release in accordance with an approved remedial
action plan shall be liable for any additional cleanup costs at the facility resulting solely from acts
or omissions of such person in rendering such assistance in compliance with the approvals required
by this subsection, unless such cleanup costs were caused by such person's gross negligence or
willful misconduct. Except as specifically provided herein, the provisions of this subsection shall
not be construed to expand or diminish the common law tort liability, if any. of private parties
participating in a cleanup action for civil damages to third parties.
   SECTION 13. Section 10, Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil
Statutes), is redesignated as Section 14 and amended to read as follows:
   Sec. U [W]. RELATIONS TO OTHER LAWS (CUMUU.TIVE ~· Except as
specifically provided in this Act, nothing [Tht8 ~ ill etH1tt1lative et 8ftft st1pple11tefttal te tttty
MheP leW8 f1M l'M'ff et leW8 relatiHg te the 8Mfte 8tthjeet f1M flees ftet repeal these ether
leW8 M peH8 eflew&. Pi1ething] in this Act diminishes or limits, or is intended to diminish or
limit, the authority of the department, the department of water resources, the Texas Air Control
Board, or local governments in performing any of the powers, functions, and duties vested in
those governmental entities by other laws.
   SECTION 14. Section 27.002, Water Code, is amended by adding Subsection (15) to read as
follows:
       (15) "Hazardous waste" has the meaning assigned to that term by Section 2(15), Solid
   Waste Disposal Act (Article 4477-7. Vernon's Texas Civil Statutes).
   SECTION 15. Section 27.018, Water Code, is amended by adding Subsection (c) to read as
follows:
   (c) An application for an injection well to dispose of hazardous waste shall be subject to the pre-
application local review process established by Section 4(e)(J2), Solid Waste Disposal Act (Article
4477-7, Vernon's Texas Civil Statutes).
   SECTION 16. Section 27.051, Water Code, is amended by adding Subsections (d), (e), and (f)
to read as follows:
   (d) The Texas Water Commission, in determining if the use or installation of an injection well
for the disposal of hazardous waste is in the public interest under Subsection (a)( I) of thir section,
shall consider, but shall not be limited to the consideration of'
        (/) compliance history of the applicant in accordance with the provisions of Subsection (e)
   of this section;
        (2) whether there is a practical, economic, and feasible alternative to an injection well
   reasonably available to manage the types and classes of hazardous waste; and
        (3) whether the applicant will maintain sufficient public liability insurance for bodily injury
   and property damage to third parties that is caused by sudden and non-sudden accidents or will
   otherwise demonstrate financial responsibility in a manner adopted by the department in lieu of
   public liability insurance. A liability insurance policy which satisfies the policy limits required
   by the hazardous waste management regulations of the department of water resources for the
   applicant's proposed pre-injection facilities shall be deemed "sufficient" under this subdivision if
   the policy also covers the injection well itself

                                                 2182
69th LEGIS-REGULAR SESSION                                                          CH 567, SEC 1

   (e) The department of water resources shall establish a procedure by rule for iH preparation of
compliance summaries relating to the history of compliance and noncompliance by the applicant
with the rules adopted or orders or permits issued by the department of water resources under th1~
chapter for any injection well for which a permit has been issued under thi1· chapter. The
compliance summaries shall be made available to the applicant and any interested person after the
department of water resources has completed its technical review of the permit application and
prior to the promulgation of the public notice rdating to the issuance of the permit. Evidence of
compliance or noncompliance by an applicant for an injection well for the disposal of hazardous
waste with the rules adopted or orders or permits issued by the department of water resources under
this chapter may be offered by any party al a hearing on the applicant's application and adm111ed
into evidence subject to applicable rules of evidence. All evidence ad milled. including compliance
history. shall be considered by the department of water resources in determining whether to issue,
amend, extend or renew a permit.
   (j) In the issuance of a permit for a hazardous waste in1ection well into a salt dome, the
department of water resources shall consider the location of any geologic fault in the salt dome in
the immediate proximity of the injection well bore, the presence of an underground water aquifer.
and the presence of sulfur mines or oil and gas wells in the area.
   SECTION 17. The amendments to the Solid Waste Disposal Act (Article 4477-7, Vernon's
Texas Civil Statutes) created by Section 3 of this Act and the amendments of the Water Code set
out in Section 16 of this Act shall not apply to any facility for which a notice of intent to file an
application, or an application, has been filed with the Texas Department of Health or the Texas
Department of Water Resources, or to a hazardous waste management facility which has
otherwise been authorized to operate by the rules of the Texas Department of Health or the
Texas Department of Water Resources as of the effective date of thi~ Act, with the except10n that
Subsections (d)(I) and (e) of Section 16 shall apply to any application on which a hearing for the
permit has not commenced prior to the effective date of this Act.
   SECTION 18. Notwithstanding any other provision to the contrary in this Act, nothing
contained in this Act shall change, alter, or enlarge upon the contractual liability of a per~on
other than those persons listed in Section 8(g)(2), Solid Wa~;te Disposal Act (Article 4477-7,
Vernon's Texas Civil Statutes), for the violation of, or a duty created by, any provision herein for
acts or omissions which occurred prior to the effective date hereof.
   SECTION 19. This Act takes effect September I, 1985.
   SECTION 20. The importance of this legislation and the crowded condition of the calendars
in both houses create an emergency and an imperative public necessity that the constitutional
rule requiring bills to be read on three several days in each house be suspended, and this rule i'
hereby suspended.
   Passed by the House on May 15, 1985, by the following vote: Yeas 144, Nays 0, 1
        present, not voting; House concurred in Senate amendments to H B. No. 2358 on
        May 27, 1985, by a non-record vote; f)assed by the Senate, with amendments, on
        May 23, 1985, by a viva-voce vote.
   Approved: June 12, 1985
   Effective: September 1, 1985

                                         CHAPTER 567

                                          H.B. No. 2359

An Act relating to creation of the hazardous waste generation and facility fees fund and a hazardous
       waste disposal fee fund, to expenditure!' from the funds, and to 1mpos1t1on of fees on hazardous
       waste generation, hazardous waste facilities, and hazardous waste disposal

Be it enacted by the Legislature of the State of Texas:

   SECTION 1. Section 8, Solid Wa~te Dispo~al Act (Article 4477-7, Vernon'' Texa' Civil
Statutes), is amended by adding Subsection (g) to read a' follow'·
   (g) The penalties imposed under Subsection (a) of tlm section do not app~v to failure to pay a
fee under Section 12 of this Act or failure to file a report under Section 13 of this Act. Suhscctton
(a)(9) of this section does net apply to interest and penalties imposed under Sect um 14 of tlm Act.

                                                 2183
                        APP. I

  Act approved June 14, 1989, 71st Leg., R.S., ch. 703,
1989 Tex. Gen. Laws 3212, 3217 (current version at Tex.
   Health & Safety Code Ann. § 361.322 (West 2010)
Ch. 702, § 1                                    71et LEGISLATURE-REGULAR SESSION

    (5)   the   Texas Juvenile Probation Commission;
    (6)   the   Texas Department of Human Services;
    (7)   the   Texas Department of Corrections;
    (8)   the   Texas Employment Commission;
    (9)   the   Texas Commission on Alcohol and Drug Abuse,·
    (10) the Texas Department of Mental Health and Mental Retardation,· and
    (11) the Texas Department of Health.
   SECTION 2. The importance of this legislation and the crowded condition of the
calendars in both houses create an emergency and an imperative public neressity that the
constitutional rule requiting bills to be read on three several days in each house be
suspended, and this rule is hereby suspended, and that this Act take effect and be in force
from and after its passage, and it is so enacted.
   Passed the Senate on May 9, 1989, by the following vote: Yeas 31, Nays O; passed the
       House on May 22, 1989, by the following vote: Yeas 141, Nays 1, one present not
       voting.
  Approved June 14, 1989.
   Effective June 14, 1989.

                                         CHAPTER 703
                                         S.B. No. 1502
                                              AN ACT
relating to regulation of hazardous substances and solid waste.
  Be it enacted by the Legislature of the State of Texas:
  SECTION 1. Section 2, Solid Waste Disposal Act (Article 4477-'/, Vernon's Texas Civil
Statutes), is amended to read as follows:
  Sec. 2. DEFINITIONS. Aa used in this Act, unless the context requires a different
definition:
     (1) "Administratively complete" means that a complete permit application form, as
  well as the report and fees required to be submitted with a permit application, have
  been submitted to the department or the commission and the permit application is ready
  for technical review in accordance with the rules of the department or commission.
     (2) "Apparent recharge zone" means that recharge zone designated on maps pre-
  pared or compiled by, and located in the offices of, the commission.
     (8) "Board of health" means the Texas Board of Health.
     (4) "Class I industrial solid waste" means any industrial solid waste or mixture of
  industrial solid wastes which because of its concentration or physical or chemical
  characteristics is toxic, corrocsive, flammable, a strong sensitizer or irritant, a generator
  of sudden pressure l>y decomposition, heat, or other means and may pose a substantial
  present or potential danger to human health or the environment when improperly
  processed, stored, transported, or otherwise managed, including hazardous industrial
  waste.
     (5) "Commission" means the Texas Water Commission.
     (6) "Commissioner" means the Commissioner of Health.
     (7) "Composting" means the controlled biological decomposition of organic solid
  waste under aerobic conditions.
     (8) "Department" means the Texas Department of Health.
     (9) "Disposal" means the discharge, deposit, injection, dumping, spilling, leaking, or
  placing of any solid waste or hazardous waste (whether containerized or uncontainer-
                                               8212
71st LEGISLATURE-REGULAR SESSION                                          Ch. 703, § 1
  ized) into or on any land or water so that such solid waste or hazardous waste or any
  constituent thereof may enter the environment or be emitted into the air or discharged
  into any waters, including groundwaters.
     (10) "Environmental response law" means the federal Comprehensive Environmental
  Response, Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601 through
  9675, as amended by the Superjund Amendments and Reauthorization Act of 1986
  [(Pub.I.. No. 96-910)).
     (11) "Executive director" means the Executive Director of the Texas Water Commis·
  sion.
     (12) "Garbage" means solid waste consisting of putrescible animal and vegetable
  waste materials resulting from the handling, preparation, cooking, and consumption of
  food, including waste materials from markets, storage facilities, handlir.g, and sale of
  produce and other food products.
     (13) "Hazardous waste" means any solid waste identified or lit1ted as a hazardous
  waste by the administrator of the United States Environmental Protection Agency
  (EPA) pursuant to the federal Solid Waste Disposal Act, as amended by the Resource
  Conservation and Recovery Act, 42 U.S.C. 6901 et seq., as amended.
     (14) "Hazardous substance" means:
       (A) a substance designated pursuant to Section 311(b)(2)(A) of the Federal
      Water Pollution Control Act, as amended (33 U.S.C. 1321),·
       (BJ an element, compound, mixture, solution, or substance designated pursu-
     ant to Section 102 of the environmental response law,·
       (CJ a hazardous waste having the characteristics identified under or listed
     pursuant to Section 3001 of the federal Solid Waste Disposal Ac~ as amended (42
     U.S.C. 6921), excludin/l waste, the regulation of which under the federal Solid
     Waste Disposal Act (42 U.S. C. 6901 et seq.) has been suspended by Act of Congress,·
       (DJ a toxic pollutant listed under Section 307(a) of the Federal Water Pollution
     Control Act (33 U.S.C. 1317),·
       (E) a hazardous air pollutant listed under Section 112 of the federal Clean Air
     Act, as amended (42 U.S.C. 7412),· and
       (F) any imminently hazardous chemical substance or mixture with respect to
     which the administrator of the Environmental Protection Agency has taken
     action pursuant to Section 7 of the Toxic Substances Control Act (15 U.S.C. 2606).
  The term does not include petroleum, which means crude oil or any fraction of
crude oil that is not otherwise specifically listed or designated as a hazardous
substance under Paragraphs (A) through (F) of this subdivision,· nor does it include
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel
mixtures of natural gas and synthetic gas,· nor does it include waste materials which
result from activities associated with the exploration, developmen~ or production of
oil or gas or geothermal resources or any other substance or material regulated by the
Railroad Commission of Texas pursuant to Section 91.101, Natural Resources Code.
     (15) "Industrial solid waste" means solid waste resulting from or incidental to any
  process of industry or manufacturing, or mining or agricultural operations.
     (16) ((.1.9)) "Local government" means a county, an incorporated city or town, or a
  political subdivision exercising the authority granted under Section 6 of this Act.
     (17) ((.19)) '.'Management" means the systematic control of nny or all of the follow-
  ing activities of generation, source separation, collection, handling, storage, transporta- '
  tion, processing, treatment, recovery, or disposal of solid waste.
     (18) [(l!ij] "Municipal solid waste" means solid waste resulting from or incidental to
  municipal, community, commercial, institutional, and recreational activities including
  garbage, rubbish, ashes, street cleanings, dead animals, abandoned automobiles, and all
  other solid waste other than industrial solid waste.
     (19) ((li)] "Notice of intent to file an application" means that notice filed pursuant
  to Section 4(e){12) of this Act.
                                           3213
Ch. 703, § 1                               71st LEGISLATURE-REGULAR SESSION

    (20) [~] "Person" means an individual, corporation, organization, government or
 governmental subdivision or agency, business trust, partnership, association, or any
 other legal entity.
    (21) [(20)] "Person affected" means any person who is a resident of a county or any
 county adjacent or contiguous to the county in which a solid waste facility is to be
 located including any person who is doing business or owns land in the county or
 adjacent or contiguous county and any local government. Such person affected shall
 also demonstrate that he has suffered or will suffer actual injury or economic damage.
    (2P) [(21}] "Processing" means the extraction of materials, transfer, volume reduc-
 tion, conversion to energy, or other separation and preparation of solid waste for reuse
 or disposal, including the treatment or neutralization of hazardous waste, designed to
 change the physical, chemical, or biological character or composition of any hazardous
 waste so as to neutralize sucn waste, or so 1,1s to recover energy or material from the
 waste, or so as to render such waste nonhazardous, or less hazardous; safer to
 transport, store, or dispose of; or amenable for recovery, amenable for storage, or
 reduced in volume. Unless the state agency determines that regulation of such activity
 under this Act is necessary to protect human health or the environment, the definition
 of "processing" does not include activities relating to those materials exempted by the
 administrator of the Environmental Protection Agency pursuant to the federal Solid
 Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42
 U.S.C. 6901 et seq., as amended.
    (23) [(22)] "Radioactive wa11te" means that waste which requires specific licensing
 under Chapter 72, Acts of the 57th Legislature, Regular Session, 1961, as amended
 (Article 4590f, Vernon's Texa11 Civil Statutes), and the rules adopted by the Texas Board
 of Health under that law.
    (24) [{23)] "Release" means any spilling, leaking, pumping, pouring, emitting, emp-
 tying, discharging, escaping, leaching, dumping, or dieposing into the environment, but
 excludes:
       (A) a release that results in exposure to persons solely within a workplace, with
    respect to a claim which those persons may assert against the employer of those
    persons;
       (B) emissions from the engine exhaust of a motor vehicle, rolling stock, aircraft,
    vessel, or pipeline pumping station engine;
       (C) release of source, by-product, or special nuclear material from a nuclear
    incident, as those terms llre defined in the Atomic Energy Act of 1954, as amended
    (42 U.S.C. 2011 et seq.) if the release is subject to requirements with respect to
    financial protection established by the Nuclear Regulatory Commission under Section
    170 of that Act, or, for the purposes of Section 104 of the environmental response law
    or any other response action, any release of source, by-product, or special nuclear
    material from any processing site designated under Section 102(a)(l) or 302(a) of the
    Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. 7912 and 7942); and
       (D) the normal application of fertilizer.
    (25) [~] "Remedial action" means those actions consistent with a permanent
 remedy taken instead of or in addition to removal actions in the event of a release or
 threatened release of a hazardous waste into the environment to prevent or minimize
 the release of hazardous wastes so that they do not migrate to cause an imminent and
 substantial danger to present or future public health and safety or the environment.
 The term includes such actions at the locetion of the release as storage, confinement,
 perimeter protection using dikes, trenches, or ditches, clay cover, neutralization, clean-
 up of released hazardous wastes or contaminated materials, recycling or reuse, diver-
 sion, destruction, segregation of reactive wastes, dredging or excavations, repair or
 replacement of leaking containers, collection of leachate and runoff, on-site treatment
 or incineration, provision of alternate water supplies, and any monitoring reasonably
 required to assure that those actions protect the public health and safety or the
 environment. The term includes the costs of permanent relocation of residents and
 businesses and community facilities where the administrator of the United States
                                          3214
71et LEGISLATURE-REGULAR SESSION                                          Ch. 703, § 1
 Environmental Protection Agency or the executive director determines that alone or in
 combination with other measures this relocation is more cost effective than and
 environmentally preferable to the transportation, storage, treatment, destruction, or
 secure disposition off site of hazardous wastes or may otherwise be necessary to
 protect the public health or safety.
    (!JG) [~] "Removal" means the cleanup or removal of released hazardous wastes
 from the environment; the actions necessary to be taken in the event of the threat of
 release of hazardous wastes into the environment; the actions necessary to monitor,
 assess, and evaluate the release or threat of release of hazardous wastes; the disposal
 of removed material; or the taking of other actions as may be necessary to prevent,
 minimize, or mitigate damage to the public health and welfare or the environment that
 may otherwise result from a release or threat of release. The term also includes
 security fencing or other measures to limit access, provision of alternate water supplies,
 temporary evacuation and housing of threatened individuals not otherwise provided for,
 action taken under Section 104(b) of the environmental response law, and any emergen·
 cy assistance that may be provided under the federal Disaster Relief Act of 1974 (42
 U.S.C. 5121 et seq.).
    (27) [{26)] "Rubbish" means nonputrescible solid waste (excluding ashes), consisting
 of both combustible and noncombustible waste materials; combustible rubbish includes
 paper, rags, cartons, wood, excelsior, furniture, rubber, plastics, yard trimmings,
 leaves, and similar materials; noncombustible rubbish includes glass, crockery, tin cans,
 aluminum cans, metal furniture, and like materials which will not burn at ordinary
 incinerator temperatures (1600"F to 1800'F).
    (28) [~] "Sanitary landfill" means a controlled area of land upon which solid
 waste is disposed of in accordance with standards, rules, or orders established by the
 board of health or the commission.
    (29) [~] "Sludge" means any solid, semisolid, or liquid waste generated from a
 municipal, commercial, or industrial wastewater treatment plant, water supply treat-
 ment plant, or air pollution control facility exclusive of the treated effluent from a
 wastewater treatment plant.
    (30) [~](A) Until the delegation of RCRA authority to the Railroad Commission of
 Texas: "solid waste" means any garbage, rubbish, refuse, sludge from a waste
 treatment plant, water supply treatment plant or air pollution control facility, and other
 discarded material, including solid, liquid, semisolid, or contained gaseous material
 resulting from industrial, municipal, commercial, mining, and agricultural operations,
 and from community and institutional activities, but does not include: (i) solid or
 dissolved material in domestic sewage, or solid or dissolved material in irrigation return
 flows, or industrial discharges subject to regulation by permit issued pursuant to
 Chapter 26, Water Code; (ii) soil, dirt, rock, sand and other natural or man-made inert
 solid materials used to fill land if the object of the fill is to make the land suitable for
 the construction of surface improvements; or (iii) waste materials which result from
 activities associated with the exploration, development, or production of oil or gas or
 geothermal resources, and any other substance or material regulated by the Railroad
 Commission of Texas pursuant to Section 91.101, Natural Resources Code, unless such
 waste, substance, or material results from activities associated with gasoline plants,
 natural gas or natural gas liquids processing plants, pressure maintenance plants, or
 repressurizing plants and is a hazardous waste as defined by the administrator of the
 United States Environmental Protection Agency pursuant to the federal Solid Waste
 Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C.
 6901 et seq., as amended. For the purposes of Sections B(g), 11, and JJb, the term
 "solid waste" shall also include hazardous substances, as they are defined by this
 Act.
     (B) On delegation of RCRA authority to the Railroad Commission of Texas: "solid
   waste" means any garbage, rubbish, refuse, sludge from a waste treatment plant,
   water supply treatment plant or air pollution control facility, and other discarded
   material, including solid, liquid, semisolid, or contained gaseous material resulting
   from industrial, municipal, commercial, mining and agricultural operations, and from
                                           3215
Ch. 703, § 1                                71st LEGISLATURE-REGULAR SESSION

    community and institutional activities, but does not include: (i) solid or dissolved
    material in domestic sewage, or solid or dis1:1olved material :n irrigation return flows,
    or industrial discharges subject to regulation by permit issued pursuant to Chapter
    26, Water Code; (ii) soil, dirt, rock, sand and other natural or man-made inert solid
    materials used to fill land if the object of the fill is to make the land suitable for the
    construction of surface improvements; or (iii) waste materials which result from
    activities associated with the exploration, development, or production of oil or gas or
    geothermal resources, and any other substance or material regulated by the Railroad
    Commission of Texas pursuant to Section 91.101, Natural Resources Code. For the
    purposes of Sections B(g), 11, and llb, the term "solid waste" shall also include
    hazardous substances, as they are defined by this Act.
    (31) [~] "Solid waste facility" means all contiguous land, and structures, other
  appurtenances, and improvements on the land, used for processing, storing, or dispos-
  ing of solid waste. A facility may be publicly or privately owned and consist of several
  processing, storage, or disposal operational units; e.g., one or more landfills, surface
  impoundments, or combinations of them.
     (32) ((31.)] "Solid waste technician" means an individual who is trained in the
  practical aspect.s of the design, operation, and maintenance of a solid waste facility in
  accordance with standards, rules, or orders established by the commission or board of
  health.
     (33) [~] "Storage" means the holding of solid waste for a temporary period, at
  the end of which the solid waste is processed, disposed of, or stored elsewhere.
  SECTION 2. Subsection (h), Section 3, Solid Waste Disposal Act (Article 4477-7,
Vernon's Texas Civil Statutes), is amended to read as follows:
  (h) The department and department of water resources shall submit a report to the
presiding officers of the legislature and the governor on January 1, 1987, and each two
years thereafter, providing the following information:
     (1) a summary of a performance report of the imposed hazardous waste permit and
  disposal fees, if the fees are approved by the legislature, and related activities to
  determine the appropriateness of the fee structure;
     (2) an evaluation of progress made in accomplishing the public policy of the state in
  regard to the preference of waste management methods as set forth in Section (3)(e)(l)
  of this Act;
     (3) projections, [~r a peried ef three years frem the due date ef the repert,] of waste
  volumes by type of waste, disposition of wastes, and remaining capacity or capacity
  utilized for the treatment and disposal of the wastes. The commission [department
  and the department ef water reeeuroee] shall adopt rules requiring persons who
  generate, store, treat, or dispose of hazardous waste to respond to a periodic survey
  [1nd1mit te the state agenoy ef apprepriate juriediotien en an annual baeie reperts]
  detailing projections of waste volumes generated and handled, assumptions t!Bed as
  the bases for these projections, disposition, and remaining capacity, as it relates to a
  surveyed [eaeh] facility owned or operated by such persons, in order that the commis·
  sion [~] may develop its [their] report. [The first report shall be sub
  mitted by Maroh 11 1996, and subsequent reperte shall be submitted annually by Mar-eh
  1 thereafter,]
  SECTION 8. Subsections (a), (b), (c), (f), and (h), Section 9, Solid Waste Disposal Act
(Article 4477-7, Vernon's Texas Civil Statutes), are amended to read as follows:
  (a) A person affected by any ruling, order, decision, or other act of the department or
the commission may appeal by filing a petition in a district court of Travis County. A
person affected by any ruling, order, decision, or other act of a county, or of a political
subdivision exercising the authority granted in Section 6 of this Act, may appeal by filing
a petition in a district court having jurisdiction in the county or political subdivision.
Except as provided in Section 9(b), the petition must be filed within 30 days after the date
of the action, ruling, order, or decision of the governmental entity complained of. Service
of citation must be accomplished within 30 days after the date the petition is filed. (~
peraen filing a petitien appealing an administrative erder issued pursuant te Seotien S(g)
                                           3216
71st LEGISLATURE-REGULAR SESSION                                              Ch. 703, § 3
mYst join as parties the state agenoy isst1ing the administrative order and may join as
parties any ether person named in the administrative order and any other person whe is
er may be liable f.er the elimination of the a11tt1al or threatened release gf solid waste
governed by the administrative order,] The plaintiff shall pursue his action with reason-
able diligence. If the plaintiff does not prosecute his action within one year after the
action is filed, the court shall presume that the action has been abandoned. The court shall
dismiss the suit on a motion for dismissal made by the governmental entity whose action
is appealed, unless the plaintiff, after receiving due notice, can show good and sufficient
cause for the delay. Except as provided in Section 9(c), in an appeal from an action of the
department, the commission, a county, or a political subdivision exercising the authority
granted in Section 6 of this Act, the issue is whether the action is invalid, arbitrary or
unreasonable.
  (b) Any person subject to an administrative order under Section 8(g) may appeal
the order by filing a petition [The filing of a petition appealing an order isrmed pt1ret1ant
to Seotion S(g)] within 45 days after the date of receipt, hand delivery, or publication
service of the order [shall stay the administrative order as te the appealing party pending
aotion by the distriot 11ot1rt]. The filing of a motion for rehearing under the Adminis-
trative Procedure and Texas Register Act (Article 6252-13a, Vernon~ Texas Civil
Statutes) shall not be a prerequisite/or an appeal of the order. The person appealing
the order must join the state agency issuing the administrative order as a party and
may join as parties any other person named as a responsible party in the administra-
tive order and any other person who is or may be liable for the elimination of the
actual or threatened release of solid waste or hazardous substances governed by the
administrative order. The filing of the petition shall not prevent the state agency
issuing the administrative order from proceeding with the remedial action program
under Section 13 of this Act unless the court enjoins the remedial action under its
general equity jurisdiction. [However, the filing of the petition shall not affeot any other
enforGement powers gf the department or departm~nt gf water resot1r11e1h] An adminis-
trative order [isst1ed pt1rst1ant to Seotion S(g)] shall become final as to non-appealing
parties 45 days after the date of receipt, hand delivery, or publication service of the order
by, to, or upon such non-appealing parties.
  (c)(J) The district court shall uphold an administrative order issued pursuant to
Section S(g) if the commission [department or department of water resot1r11es, by a
preponderange ef the evidenoe1] proves by a preponderance of the evidence that:
        (A) [(1) that] there is an actual or threatened release of solid waste or hazardous
     substances that is an imminent and substantial endangerment to the public health
     and safety or the environment; and
        (B) [(2) that] the person made subject to the administrative order is liable for the
     elimination of the release or threatened release, in whole or in part.
    (2) If the appropriateness of the selected remedial action is contested in the
  appeal of the administrative order, the remedial action shall be upheld unless the
  court determines that the remedy is arbitrary or unreasonable.
  (f) In appeals of an administrative order issued pursuant to Section 8(g), the district
court upon establishing the validity of the order, shall issue an injunctior. requiring all
persons named or joined against whom liability has been established by the department or
the commission [department of water resot1r11es] or any other party to comply with the
terms of the administrative order.
  (h)(l) In appeals of an administrative order issued pursuant to Section S(g) or Section
13(g)(2) of this Act, in any action to enforce such an administrative order, in civil suits
seeking injunctive relief under Section 8(g)(l) of this Act, and in cost recovery suits under
Section 13(g)(3) or Section 13(g)(4) of this Act, the state, if it prevails, shall be entitled to
recover from parties against whom liability has b.aen established its reasonable attorney's
fees, its reasonable costs of preparing and providing witnesses, and its reasonable costs
of having investigated and assessed the facility or site. The court shall apportion such
costs among liable parties as it determines is equitable and just. All such costs recovered
by the state pursuant to Section 13 shall be remitted to the commission and placed in
a separate account of the hazardous waste disposalfee/und. All other costs recovered
                                             3217
Ch. 703, § 3                                71st LEGISLATURE-REGULAR SESSION

by the state under Section 8(g) shall be remitted to the commission and placed in a
separate account of the hazardous waste generation and facility fees fund.
      (2) In the event an appeal or third party claim is found by the court to be
  frivolous, unreasonable, or without foundation, the court may assess damages
   against the party bringing such appeal or third party claim in an amount not to
   exceed twice the costs incurred by the state or the third party defendant, including
   reasonable attorney's fees, reasonable costs of preparing and providing witnesses,
   and reasonable costs of studies, analyses, engineering reports, tests, or other
   projects the court finds were necessary/or the preparation of the party's case. [CG&t&
   Jel!9\'ered by the state YRder SubdivisiGR (1) 9f this subse0tiGn shall be n1mitted tG the
   G9mmissi9n a11d plaoed iR the hazardGYS waste generatiGn and faoility fees fund tG be
   used by the 119mmissiGR f9r the administratiGn 9f the hazardGus waste managemeRt
   pl!Ggram. All amGYRts re1191Je1?ed under this subseotiGR shall be pla0ed by the oGmmis
   siGR in a separate a11119unt within the ha;i;ard911s waste generatiGn and faoility fees
   fwld.]
      (3) In the event the state's orders enumerated under Subdivision (1) of this subsection
   are found by the court to be frivolous, unreasonable, or without foundation as
   regarding any party named in the order, such party appealing or contesting the order
   shall be entitled to recover from the state its reasonable attorney's fees, its reasonable
   costs of preparing and providing witnesses, and its reasonable costs of studies,
   analyses, engineering report.a, tests, or other projects the court finds were necessary
   for the preparation of the party's case.
   SECTION 4. Subsections (c) and (d), Section lla, Solid Waste Disposal Act (Article
4477-7, Vernon's Texas Civil StatuU>'l), are amended to read as follows:
   (c) The hazardous waste disposal fee fund shall consist of money collected by the
commission from fees imposed on the operator of a solid waste facility for disposal of
hazardous waste under Section 12 of this Act, from interest and penalties imposed under
Section 14a of this Act for late payment of a disposal fee or late filing of a report, and
from money paid by a liable party for facility cleanup and maintenance under Subsection
(m) [(g)] of Section 13 of this Act. In addition, the interest received from the
investment of this fund, in accounts under the charge of the treasurer, shall be
credited to the hazardous waste disposal fee fund on a pro rata basis. The com mis·
sion may use the money credited to the account from interest received from the
investment of the fund for only those purposes specified in Subsection (d) of this
section.
   (d) The commission may use the money collected and deposited in the fund under
Subsection (c) of this section only for:
      (1) necessary and appropriate removal and remedial action at sites at which solid
   [hazardGus] waste or hazardous substances have been disposed if funds from a liable
   party, independent third party, or the federal government are not sufficient for the
   removal or remedial action;
      (2) necessary and appropriate maintenance of removal and remedial actions for the
   expected life of those actions if funds from a liable party have been collected and
   deposited in the fund for that purpose or if funds from a liable party, Independent third
   party, or the federal government are not sufficient for the maintenance; and
      (3) expenses related to complying with the federal Comprehensive Environmental
   Response, Compensation, and Liabilit.y Act of 1980 (42 U.S.C. Section 9601 et seq.), the
   federal Superfund Amendments and Reauthorization Act of 1986, and Sections 8(g) and
   13 of this Act.                                                                     ·
   SECTION 5. Section 13, Solid Waste Disposal Act (Article 4477-7, Vernon's Texas
Civil Statutes), is revised to read as follows:
   Sec. 13. IDENTIFICATION, ASSESSMENT, AND CLEANUP OF HAZARDOUS
WASTE FACILITIES. (a) The commission shall annually publish an updated state
registry identifying, to the extent feasible, every facility that may constitute an
imminent and substantial endangerment to public health and safety or the environ·
ment due to a release or threatened release of hazardous substances into the environ·
                                           3218
71et LEGISLATURE-REGULAU SESSION                                           Ch. 703, § 5
 ment. The registry shall identify the relative priority for action at each listed
facility. The relative priority for action at facilities listtd on the registry shall be
 periodically reviewed and revised by the commission, as necessary to accurately
 reflect the need/or action at the facilities. For thtJ purposes of this section, "facility"
 means (1) any building, structure, installation, equipment, pipe, or pipeline (includ-
ing any pipe into a sewer or publicly owned treatment works, well, pit, pond, lagoon,
impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or
aircraft), or (2) any site or area where a hazardous substance has been deposited,
stored, disposed of, or placed or otherwise come to be located,· but does not include
 any consumer product in con.'lumer use or any vessel.
   (b) The executive director may conduct investigations of facilities which are listed
 on the state registry, or which it has reason to believe should be included on the state
registry, in accordance with Section 7 of this Act. If there is a reasonable basis to
 believe there may be a release or threatened release of a hazardous substance at a
facility, the executive director may submit requests for information and requests for
 the production of documents to any person who has or may have information' or
documents relevant to:
      (1) the identification, nature, or quantity of materials that have been generated,
   treated, stored, or disposed of at a facility or transported to a facility;
      (2) the identification of soils, ground water, or surface water at a facility that
   have been or may be affected by an actual or threatened release of a hazardous
   substance;
      (3) the nature or extent of a release or threatened release of a hazardous
   substance at or from a facility; or
      (4) the ability of a person to pay for or to perform a remedial action.
   If the requested information or documents are not produced in a timely manner,
 the commission may issue an order directing compliance with the requests for
information or production of documents. Information or documents requested
under this subsection shall be public records, except that, if a showing satisfactory to
 the commission is made by the owner of the records that the records would divulge
 trade secrets if made public, then the commission shall consider the copied records as
confidential. Nothing in this subsection .'/hall require the commission to consider the
composition or characteristics of hazardous substances being processed, stored, dis·
posed of, or otherwise handled to be held confidential. The commission shall promul-
gate rules regarding the provision of notice and an opportunity for a hearing before
 the commission on whether the requested injormaf.ion or documents should be
produced.
   (c) Prior to the listing of a facility on the state registry, the executive director shall
first determine whether the potential endangerment to public health and safety or the
environment at the facility can be resolved by the present owner or operator under
 the federal Resource Conservation and Recovery Act of 1978 (42 U.S.C. 8901) or by
some or all of the potentially responsible parties identified in Section B(g), pursuant
 to an agreed administrati?Je order issued by the commission. If the potential endan-
germent to public health and safety or the environment can be resolved in such a
manner, the facility shall not be listed on the state registry. Notice of the approach
selected to resolve the apparent endangerment to health and public safety or the
environment and the fact that this action is being taken in lieu of listing the facility
on the state registry shall be published in the Texas Register. If after reasonable
efforts the executive director determines that the potential endangerment to public
health and safety or the environment cannot be resolved by either of these approaches,
 the executive director shall evaluate the facility to determine whether the site exceeds
 the commission~ minimum criteria for listing on the state regisi ry. These minimum
criteria shall be promulgated by rule. The executive director sltall also evaluate the
facility to determine whether it is eligible for listing on the federal National Priorities
List. The commission shall proceed under this section only if, based on information
available to the executive director, the facility is eligible for listing on the state
registry but not eligible for the federal National Priorities List.
                                           3219
Ch. 703, § 5                              7lst LEGISLATURE-REGULAR SESSION

     (1) Once the executive director has determined that the facility is eligible for
 listing on the state registriJ, the commission shall publish in the Texas Register and
 in a newspaper of general circulation in the county in which the facility is located a
 notice of intent to list the facility on the state registry. The notice shall at least
 specify the name and location of tlte facility, the general nature of the potential
 endangerment to public health and safety or the environment as determined by
 information available to the executive director at that time, and the duties and
 restrictions imposed by Subsection (c)(3) . of this section. The notice also shall
 provide that interested parties may do either or both of the following: (A) submit
 written comments to the commission relative to the proposed listing of the facility,·
 or (B) request a public meeting to discuss the proposed listing by submitting a
  request within 30 days of issi;ance of the notice.
    (2) Once the facility is determined tCJ be eligible for listing on the state registry,
  the executive director shall make all reasonable efforts to identify all potentially
 responsible parties/or remediation of the facility. Concurrent with the publication
 of general notice in accordance with Subdivision (1) of this subsection, the executive
 director shall provide to e3.ch identified potentially responsible party direct, written
 notification of the proposed listing of the facility on the state registry and of the
 procedures for requesting a public meeting to discuss the listit.:i and the inform.a·
  tion included in the general notice as required by Subdivision (1) of thi'l subsection.
  Written notifications under this subsection shall be by certified mail, return receipt
 requested, by mailing notice to each named responsible party at the party 8 last
 known address.
    (3) If a public meeting is requested regarding the proposed listing of a facility on
  the state registry, the commission shall publish general notice of the date, time, and
 location of the public meeting in the Texas Register and in the same newspaper in
 which the notice of the opportunity to request the public meetin,Q was published.
  The public meeting notice shall be provided at least 30 days in advance of the
 meeting. Notice of the meeting also shall be provided by certified mail, return
 receipt requested, to all identified potentially responsible parties at the parties' last
 known addresses. Nonreceipt of any notice mailed to a potentially responsible
 party pursuant to this subdivision or Subdivision (2) of this subsection shall in no
 way affect the responsibilities, duties, or liabilities imposed on the party. Contem·
 poraneously with the issuance of notice of the public meeting, the executive director
 shall make available to all interested parties the public records he has regarding the
 facility. For the purposes of providing this information, the executive director
 shall provide a brief summary of the public records he has and make these public
 records available for inspection and copying during regular business hours.
    (4) The public meetings will be legislative in nature and not contested case
 hearings under the Administrative Procedure and Texas Register Act (Article
 6252-13a, Vernons Texas Civil Statutes). The meeting shall be held/or the purpose
 of obtaining additional information regarding the facility relative to the eligibility
 of the facility for listing on the state registry and the identification of potentially
 respon:Jible partfos.
    (5) Subsequent to the public meeting or after opportunity to request a public
 meeting has passed, the commission shall file or cause to be filed an affidavit or
 notice in the real property records of the county in which a facility is located
 identifying the facility as one proposed for listing on the state registry, unless the
 executive director determines, based on information presented at the public meet·
 ing, that efforts to list the facility on the state registry should not be pursued.
    (6)(A) Subsequent to the public meeting or after opportunity to request a pubtic
 meeting has passed, but prior to any listing of the facility on the state registry, the
 commission shall allow all identified potentially responsible parties the opportuni·
 ty to fund or conduct, if appropriate, a remedial investigation/feasibility study, or
 similar study as approved by the executive director, for the facility. The potentially
 responsible parties shall have 90 days from the date of the issuance of notice of the
 opportunity to request a public meeting to make a good faith offer to conduct the
                                         3220
71st LEGISLATURE-REGULAR SESSION                                         Ch. 703, § 5
 study. If a good faith offer from all or some of the potentially responsible parties is
 received by the commission within 90 days, those making the offer sl:all have an
 additional 60 days within which to negotiate an agreed administrative order from
  the commission, which shall include a scope of work. The commission shall not
 require the participating potentially responsible parties to agree to perform the
 remedial action or admit liability for the facility remediation in this agreed
 administrative order.
       (B) If no potentially responsible party makes a good faith offer to conduct the
    remedial investigation/feasibility study or similar study as approved by the
    executive director or .if the participating potentially responsible parties fail to
    conduct or complete an· approved study, the commission is authorized to conduct
    or complete the study using funds from the hc;,zardous waste disposal fee fund.
       (C) To encourage potentially responsible parties to perform the remedial inves-
    tigation/feasibility Etudy or other similar study as approved by the executive
    director, no costs for commission oversight of the study may be assessed against
    those parties who fund or perform the study. Nonparticipating pote.ttially
    responsible parties who are ultimately determined to be liable for remediation of
    the facility under this Act or who subsequentll' enter into an agreed ordu relative
    to the remediation of the facility may be assessed up to the full costs fot
    commission oversight of the study process. If all potentially responsible parties
    participate or agree to fund the remedial investigation/feasibility study or other
    similar study, all commission oversight costs shall be borne by the hazardous
    waste disposal fee fund.
       (D) Once the executive director has determin 1u;! that a facility is eligible for
    listing on the state registry, no person shall perform at the facility any partial or
    total removal activities except as authorized by the executive director in appropri-
    ate circumstances after notice and opportunity for comment to all other poten-
    tially responsible parties. The commission may develop rules determining what
    constitutes an appropriate circumstance to take removal action under this
    paragraph. Authorization by the executive director to conduct a partial or total
    removal action shall not constitute a final determination of the party$ ultimate
    liability for remediation of the facility, nor a determination of divisibility.
    (7)(A) Once the facility is determined to be eligibl1?for listing on the state registry,
 the owner or operator of the facility must provide the executive director with
 written notice of any substantial change in use of the facility at least 60 days before
 the change in use is made. Notice of a prnposed substantial change in use shall be
 in writing, addressed to the executive director, provided by certified mail, return
 receipt requested, and shall include a brief description of the proposed change in
 use. A substantia! change in use shall be defined by rule and shall include but not
 be limited to actions such as the erection of a building or other structure at the
 facility, the use of the facility for agricultural production, the paving of the facility
 for use as a roadway or parking lot, and the creation of a park or other public or
 private recreational use on the facility.
       (B) If, within 30 days of the notice, the executive director determines that the
    proposed substantial change in use will interfere significantly with a proposed or
    ongoing remedial investigation/feasibility study, or similar study approved by
    the executive director, or expose the public health and safety or the environment
    to a significantly increased threat of harm, then he shall notify the owner or
    operator of his determination. Once the determination is made and notification
    given, the owner or operator shall not proceed with the proposed substantial
    change in use. The owner or operator may request a hearing before the commis-
    sion on whether the determination should be modified or set aside by submitting
    a request within 30 days of receipt of the executive director$ determination. If a
    hearing is requested, the commission shall initiate the hearing within 45 days of
    the receipt of the request. The hearing shall be conducted in accordance with the
    Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon$
                                          3221
Ch. 703, § 5                              71et LEGISLATURE-REGULAR SESSION

     Texas Civil Statutes). The executive director's determination shall become unap-
     pealable 30 days after issuance if a hearing is not requested.
    (8) Within a reasonable time following the completion of the remedial investiga·
  tionlfeasibility study or other similar study, if required, the executive director shall
 select a proposed remedial action. Subsequent to its selection of a proposed
 remedial action, the commission shall hold a public meeting to discuss the proposed
 action. The commission shall publish notice of the meeting in the Texas Register
 and in a newspaper ofgeneral circulation in the county where the facility is located
 at least 45 days prior to the public meeting. The notice shall provide information
 regarding the proposed remedial action and the date, time, and place of the
 meeting. The commission shall also mail the same information to each potentially
 responsible party by certified mail, return receipt requested, at each party's last
 known address at least 45 days prior to the publii: meeting Contemporaneously
 with the issuance of notice of the public meeti1~g, the executive director shall make
 available to all interested parties the public records he has regarding the facility.
 For purposes of providing this information, the executive director shall provide a
 brief summary of the public records he has and make these public records available
 for inspection and copying during regular business hours. Nonreceipt of any notice
 mailed to a potentially responsible party pursuant to this subdivision shall in no
 1;ay affect the responsibilities, duties, 01· liabilities imposed on any such party.
    (9) The public meeting shall bt legislative in nature and not conducted as a
 contested case hearing under the Administrative Procedure and Texas Register Act
 (Article 6252-13a, Vernon's Texas Civil Statutes). The meeting shall be held for the
 purpose :if obtaining additional information regarding the facility and the identifi·
 cation of additional potentially responsible parties. Those in attendance may
 present their comments on the proposed remedial action, and the executive director
 may revise its proposed remedial action in light of the presentations.
    (JO)(A) Subsequent to the public meeting on the proposed remedial action, the
 commission shall provide all identified potentially responsible parties an opportu-
 nity to fund or perform the proposed remedial action. The potentially responsible
 parties shall have 60 days from the date of the public meeting in which to make a
 good faith offer to perform or fund the proposed remedial action. If a good faith
 offer is made by all or some of the potentially responsible parties within the 6{1-day
 period, then these parties will have an additional 60 days to negotiate an aoreed
 administrative order from the commission, which shall include a scope of u ork.
 The commission shall not require an admission of liability in the agreed adr.1 inis·
 trative order.
       (B) To encourage potentially responsible parties to perform the remedial ac·
    tion, no costs for commission oversight of the remedial action may be assessed
    against those parties who fund or perform the remedial action. Nonpartic·
    ipating potentially responsible parties who are ultimately determined to be liable
    for remediation of the facility may be assessed up to the full costs/or commission
    oversight of the remedial action. If all potentially responsible parties conduct or
    fund the remedial action, all commission oversight costs shall be borne by the
    hazardous waste disposal fee fund. Participation in the remedial action does not
    relieve those who did not conduct or fund the remedial investigation/feasibility
    study or other similar study approved by the executive director from paying their
    portion of the oversight costs of that phase of the remediation.
       (C) The executive director may authorize a potentially responsible party to
    conduct a partial remedial action at a portion of the facility if the executive
    director determines that the release or threatened release is divisible after notice
    and opportunity for comment to all other potentially responsible parties. For
    purposes of this section, "divisible" means that the hazardous substance released
    or threatened to be released is capable of being managed separately under the
    remedial action plan. A determination of divisibility by the executive director
    shall have no res judicata or collateral estoppel effect on a potentially responsible
    party's ultimate liability for remediation of the facility under Section 8.
                                         3222
71st LEGISLATURE-REGULAR SESSION                                           Ch. 703, § 5
      (11) After consideration of all good faith offers to perform a remedial action, the
   commission shall issue a final administrative order that shall:
        (A) list the facility on the state registry, thus determining that the facility poses
      an imminent and substantial endangerment to public health and safety or the
      environment;
        (B) specify the selected remedial action,·
         (C) list the parties determined to be responsible for remediating the facility,·
         (D) make findings offact describing actions voluntarily undertaken by respon-
      sible parties,·
        (E) order the responsible parties to remediate the facility and, if appropriate,
      reimburse the hazardous waste disposal fee fund for remedial investigation/fea-
      sibility study and remediation costs;
        (F) establish a schedule for completion of the remedial action,·
        (G) state any determination of divisibility of responsible party liability; and
        (H) give notice of the duties and restrictions imposed by Subsection (/) of this
      section.      ·
   The provisions in Sections B(g), 9, 10, and 11 of this Act relating to administrative
orders shall apply to orders issued pursuant to this paragraph.
      (12) If a potentially responsible party is newly identified after a final administra-
   tive order has been issued by the commission pursuant to Subdivision (11) of this
   sub~ection, that party shall have 60 days to negotiate an amendment to the existing
   order. The commission shall not be prohibited from issuing a separate order for
   the newly identified potentially responsible party if it determines that the circum-
   stances warrant a separate order. The responsible parties identified in the order
   issued pursuant to Subdivision (11) of this subsection shall be allowed to comment
   on the issuance of a separate order for the newly identified potentially responsible
   party.
   (d) The commission shall file or cause to be filed an affidavit or notice in the real
property records of the county in which the facility is located stating that the facility
has been listed on or deleted from the state registry or is no longer proposed for
listing on the state registry, within a reasonable period after a determination has
been made.
   (e) Any owner or operator or other named responsible party of a facility listed or to
be listed in the state registry may request the commission to delete the facility from
 the state registry, modify the facility~ priority within the state registry, or modify
any information regarding the facility by submitting a written statement setting
forth the grounds of the request in the form as the commission may require pursuant
 to its promulgated rules. The commission shall promulgate rules establishing proce-
dures, including public hearings, for review of requests submitted pursuant to this
subsection.
   (/) Subsequent to the listing of a facility on the state registry, no person may
substantially change the manner in which the facility is used without notifying the
executive director and receiving written approval of the executive director for the
change. A substantial change in use shall be rll!fined by rule and shall include but
not be limited to actions such as the erection of u building or other structure at the
facility, the use of the facility for agriculturq,l production, the paving of the facility
for use as a roadway or parking lot, and the creation of a park or other public or
private recreational use on the facility. The notice shall be in writing, addressed to
 the executive director, provided by certified mail, return receipt requested, and shall
include a brief description of the proposed change of use. The executive director shall
approve or disapprove the proposed action within 60 days of receipt of the notice of
proposed change in use. The executive director shall not approve the proposed change
of use if such new use will significantly interfere with a proposed, ongoing, or
completed remedial action program at a facility or expose the public health and
safety or the environment to a significantly increased threat of harm.
                                           3223
Ch. 703, § 5                                71st LEGISLATURE-REGULAR SESSION

   (g)(J) Whenever the commission, after investigation, finds that there exists a release
or threatened release of a hazardous substance at n facility that: (A) is causing
irreversible or irreparable harm to the public health and safety or the environment,·
and (B) the immediacy of the situation makes it prejudic.ial to the public interest to
delay action until an administrative order can be issue1t to potentially responsible
parties or until a judgment can be entered in an appeal of an administrative order,·
 the commission may, with the funds available to the corn.mission from the hazardous
waste disposal fee fund, undertake immediate removal action at the facility to
alleviate the harm. After the immediate danger of irreversible or irreparable harm
has been alleviated, the commission shall proceed pursuant to the provisions of this
section. Fi.ndings required pursuant to this subsection shall be in writing and may
be made by the commission on an ex parte basis subject to judicial review pursuant to
 the substantial evidence rule as provided by the Administrative Procedure and Texas
Register Act (Article 6252-13a, Vernon~ Texas Civil Statutes).
      (2) The reasonable expenses of any immediate removal action taken by the
   commission may be recoverable from the persons described in Section 8, and the
   state may seek to recover the reasonable expenses in any court of appropriate
   jurisdiction.
   (h) Whenever a person ordered to eliminate an imminent and substantial endan·
germent to the public health and safety or the environment has failed to do so within
 the time limits specified in the order or any extension of time approved by the
commission, the commission may implement the remedial action program for the
facility. The reasonable expenses of implementing the remedial action program by
 the commission shall be paid by the persons to whom the order was issued and shall be
recoverable under the provisions of Subsection (m) of this section.
   (i)(J) The goal of any remedial action shall be the elimination of the imminent and
substantial endangerment to the public health and safety or the environment posed
 by a release or threatened release of a hazardous substance at a facility. The
appropriate extent of the remedial action at any particular facility shall be deter-
 mined by the commission~ selection of the remedial alternative which the state
agency determines is cost effective (i.e., the lowest cost alternative that is technologi-
cally feasible and reliable and which effectively mitigates and minimizes damage to
and provides adequate protection of the public health and safety or the environment).
      (2) In considering the appropriate remedial action program at a particular
   facility, the commission may approve a program that does not attain a level or
   standard of control at least equivalent to a legally applicable or relevant and
   appropriate standard, requirement, criterion, or limitation, as required by state or
   local law, if the commission finds that:
         (A) the remedial action selected is only part of a total remedial action that will
      attain such level or standard of control when completed,·
         (B) compliance with the requirement at that facility will result in greater risk
      to public health and safety or the environment than alternative options,·
         (C) compliance with the requirement is technically impracticable from an
      engineering perspective,·
         (D) the remedial action selected will attain a standard of performance that is
      equivalent to that required under the otherwise applicable standard, requirement,
      criterion, or limitation through use of another method or approach,·
         (E) with respect to a local standard, requirement, criterion, or limitation, the
      locality has not consistently applied (or demonstrated the intention to consistent-
      ly apply) the standard, requirement, criterion, or limitation in similar circum-
      stances of other remedial actions within the locality,· or
         (F) with respect to an action using solely state funds, selection of a remedial
      action that attains such levels or standards of control will not provide a balance
      between the need/or protection of public health and safety or the environment at
      the facility and the availabilty of state funds to respond to other sites that present
                                           3224
71st LEGISLATURE-REGULAR SESSION                                        Ch. 703, § 5
      a threat to public health and safety or the environment, taking into consideration
      the relative immediacy of the threats.
  (jJ In adflition to all other remedies available to the state under this Act or any
other law or statute, all remediation costs for which a person is liable to the state
shall constitute a lien in favor of the state on the real property and the rights to the
real property that are subject to or affected by a remedial action. This provision is
cumulative of other remedies available to the state under this Act.
      (JJ The lien imposed by this subsection shall arise and attach to th,e real property
  subject to or affected by a remedial action at the time an affidavit is recorded and
  indexed in accordance with this subsection in the county in which the real property
  is located. For the purpose of determining rights of all affected parties, the lien
  shall not relate back to a time prior to the date on which the affidavit is recorded,
  which date shall be the lien inception date. The lien shall continue until the
  liability for the costs is satisfied or becomes unenforceable through operation of law.
      (2J The affidavit shall be executed by an authorized representative of the commis-
  sion and must show:
         (AJ the names and addresses of the persons liable for the costs,·
         (BJ a description of the real property that is subject to or affected by the
      remediation action for the costs or claims,· and
          (CJ the amount of the costs and the balance due.
      (9J The county clerk shall record the affidavit in records kept for that purpose
  and shall index the affidavit under the names of the persons liable for the costs.
      (4J The commission shall record a relinquishment or satisfaction of the lien when
  the lien is paid or satisfied.
     (SJ The lien may be foreclosed only on judgment of a court of competent jurisdic-
   tion foreclosing the lien and ordering the sale of the property subject to the lien.
      (6J The lien imposed by this subsection shall not be valid or enforceable if real
  property or an interest therein or a mortgage, lien, or other encumbrance upon or
  against real property is acquired before the affidavit is recorded, unless the person
  acquiring the real property or an interest therein or acquiring the mortgage, lien,
  or other encumbrance thereon had or reasonably should have had actual notice or
  knowledge that the real property is subject to or affected by a clean-up action or has
  knowledge that the state has incurred clean-up costs.
      ('1J If a lien is fixed or attempted to be fixed as provided in this subsection, the
  owner of the real property affected by the lien may file a bond to indemnify against
  the lien. The bond shall be filed with the county clerk of the county in which the
  real property subject to the lien is located. An action to establish, enforce, or
  foreclose any lien or claim of lien covered by the bond must be brought not later
   than the 90th day after the date of service of notice of the bond.
      (BJ The bond must:
         (AJ describe the real property upon which the lien is claimed,·
         (BJ refer to the lien claimed in a manner sufficient to identify it,·
          (CJ be in an amount double the amount of the lien referred to,·
          (DJ be payable to the commission;
         (EJ be executed by the party filing the bond as principal and a corporate surety
      authorized under the law of this state to execute the bond as surety,· and
          (FJ be conditioned substantially that the principal and sureties will pay to the
      commission the amount of the lien claimed, plus costs, if the claim is proved to be
      a lien on the real property.
      (9J .After the bond is filed, the county clerk shall issue notice of the bond to the
  named obligee. A copy of the bond must be attached to the notice. The notice may
  be served on each obligee by having a copy delivered to the obligee by any person
  competent to make oath of the delivery. The original notice shall be returned to the
                                          3225
Ch. 703, § 5                               71st LEGISLATURE-REGULAR SESSION

    office of the county clerk, and the person making service of copy shall make an oath
    on the back of the copies showing on whom and on what date the copies were served.
    The county clerk shall record the bond notice and return in records kept for that
    purpose. In acquiring an interest in real property, a purchaser or lender may rely
    on and is absolutely protected by the record of the bond, notice, and return.
       (10) The commission may sue on the bond after the 30th day following the date on
    which the notice is served but may not sue on the bond later than one year after the
    date on which the notice is served. If the commission recovers in a suit on the lien
    or on the bond, it is entitled to also recover reasonable attorney's fees.
   (k) Money for actions taken or to be taken by the commission in connection with the
 elimination of an imminent and substantial endangerment to the public health and
 safety or the environment pursuant to this section shall be payable directly to the
 commission from the hazardous waste disposal fee fund. This includes any costs of
 inspection or sampling and laboratory analysis of wastes, soils, air, surface water,
 and ground water done on behalf of a state agency and the costs of investigations to
 identify and locate potentially responsible parties.
    (l) The commission shall seek remediation of facilities by potentially responsible
 parties prior to expenditure offederal or state funds for the remediations. Potential·
 ly responsible parties shall coordinate with ongoing federal and state hazardous waste
 programs, although no state or local permit shall be required for any removal or
 remedial action conducted on site. Subject to the provisions nf Subsection (i) of this
 section, the state may enforce any federal or state standard, requirement, criterion,
 or limitation to which the remedial action would otherwise be required to conform if a
 permit were required. No action taken by the person to contain or remove a release
 or threatened release in accordance with an approved remedial action plan shall be
 construed as an admission of liability for said release or threatened release. No
 person who renders assistance in containing or removing a release or threatened
 release in accordance with an approved remedial action plan shall be liable for any
 additional remediation costs at the facility resulting solely from acts or omissions of
 the person in rendering the assistance in compliance with the approvals required by
 this subsection, unless the remediation costs were caused by the person's gross
 negligence or wilful misconduct. Except as specifically provided in this subsection,
 these provisions shall not be construed to expand or diminish the common law tort
 liability, if any, of private parties participa~ing in a remediation action for civil
 damages to third parties.
    (m) The commission sh1ill file a cost recovery action against all respomnble parties
 who have not complied with the terms of an administrative order issued pursuant to
 Subdivision (11} or (12) of Subsection (c) of this section. The commission shall file
 the cost recovery action no later than one year after all remedial action has been
 completed. The state may seek a judgment against the noncompliant parties for the
 total amount of the cost of the remedial action, including costs of any necessary
 studies and oversight costs, minus the amount agreed to be paid or expended by any
 other responsible parties pursuant to an order issued pursuant to Subdivision (11) or
 (12) of Subsection (c) of this section. The action may also include a plea seeking civil
 penalties for noncompliance with the commission's administrative order and a claim
 for up to double the state's costs if the responsible party's defenses are determined by
 the court to be unreasonable, frivolous, or without foundation.
· (n)(l) A responsible party named in an administrative order who does not comply
 with the order shall become subject to the imposition of administrative or civil
 penalties under Section Bb of this Act. The penalties may be assessed only from the
 date after which the administrative order becomes nonappealable.
       (2) The commission is authorized to include provisions within an agreed adminis·
    trative order that stipulate administrative penalty amounts for failure to comply
    with the order. The penalty provisions may be applicable to either or both of the
    remedial investigation/feasibility study and remedial action orders.
    (o)(l) The commiss-ion shall promulgate rules necessary to develop a mixed funding
 program in which available money from potentially responsible parties is combined
                                          8226
71st LEGISLATURE-REGULAR SESSION                                            Ch. 703, § 5
with state or federal funds to clean up a facility in a timely manner. Use of the state
or federal funds in a mixed funding approach shall not preclude the state or federal
government from seeking recovery of its costs from nonparticipating potentially
responsible parties.
      (2) The commission shall assess and may, through rulemaking, develop and
  implement a de minimis settlement program. Under the program, the commission
  shall be required to consider the advantages of developing a final settlement with
   potentially responsible parties that are responsible for only a minor portion of the
  response costs at a facility because the hazardous substances the party is respon•
  sible for are minimal in amount or in hazardous effect by comparison with the
  hazardous substances attributable to other parties.
      (3) The commission shall investigate additional alternative programs to encour·
  age potentially responsible parties to investigate or remediate facilities and report
   its findings to the 72nd Legislature with recommendations for legislative action.
  (p) The commission is authorized to determine whether a potentially responsible
party is. financially capable of conducting any necessary remediation studies or
remedial action. The commission shall promulgate rules to develop the criteria for
determination of financial capability. If no financially capable potentially r~pon·
sible parties exist for a facility, the commission shall issue an administrative order
stating its determination that the facility constitutes an imminent and substantial
endangerment and that there are no financially capable potentially responsible
parties. The commission shall then conduct its own remediation study and remedial
action, using federal funds if available. Iffederal funds are not available, state funds
from the hazardous waste disposal fee fund shall be used. Generally, the remediation
of listed facilities shall be achieved first by private party funding, second with the aid
of federal funds, and third, if necessary, with state funds from the hazardous waste
disposal fee fund.
  (q) The executive director or the commission shall have the authority to extend any
time period specified in this section if deemed appropriate.
   [Seo. 13, IDENTIFICATION AND J..SSESSMENT OF HAZJ..RDO:US WASTE FA
CIUTIES, (a) The department ef water reseurees, in eeeperatien with the department,
shall oenduot and oemplete a survey ef the state by July 1, 11~8G 1 the pUFf19Se ef whioh is
t9 identify te the extent feasible every hazardeus waste faoility whieh may oenstitute an
imminent and substantial endangerment te publio health and safety er the envirenment,
The werk already perfermed te identify eandidate sites fur inolusien in the federal
Natienal Pri9rities list shall serve as the basis fer suoh a sun•ey, As seen as pessible
after e9mpletien ef a draft survey, the department ef water reseurees shall eenduot a
publio hearing te selieit oemments en the draft survey and inf9rmatien en additienal
eandidate sites. Net later than January 11 1Q871 the department ef water reseurees shall
publish a registry identifying eaeh faoility listed by the survey, the relative priority of the
need fer aetion at eaoh faoili~• to remedy eni.tirenmental and health problems resulting
frem the presenoe ef hazardous wastes at suoh faeilities, and setting ferth ree9mmenda
tiens fer aotiens whieh may be pursued to aehie•,re effeoti~•e, effioient, and timely eleanup
or ether reselutien of the preblems identified fer eaoh faoility, Sueh reeemmendatiens
shall net oonstitute the remedial innstigatien/feasibility study fur the relevant faeility,
but shall ferm the preliminary basis fur suoh a study. The eleanup of sueh faeilities shall
be aohieved first by private party funding, seoend with the aid of federal funds, and third,
if neeessary, w4th state funds frem the hazardous waste permit and disposal fee, if the
fee is approved by the legislature. J.. draft eepy of the registry shall be eireulated te the
department for eemment prier te publioatien, Three oepies ef the registry, as published,
shall be deli'Jered to the Offioe of the Geverner,
   [{b)(l) The department ef water reseurees may eonduet in~•estigatiens of the faeilities
listed in the registry and may in'Jestigate areas er sites whioh it has reason te belie'le
should be ineluded in the registry, in aeeerdanee with Seetie~ 7 ef this Aet.
     [(2) The department ef •nater reseurees shall, as part of the registry, aBBeBB by
   January 11 1Q871 and eaeh year thereafter, and, based upon new infermatien reeeiJJed
   from seuroes ineluding but net limited to publie hearings, reasseBB 1 in eeeperatien with
                                            3227
Ch. 703, § 5                                 71st LEGISLATURE-REGULAR SESSION

  the department, the relative priority of the need for aetion at eaeh faeility listed in the
  registry t9 remedy en¥ironmental and health problems resulting frem the presenee of
  hazardous wastes at sueh faeilities,
  [(e) The department of water resourees shall update the registry perfodieally to add
faeilities whieh may eonstitute an imminent and substantial endangerm9nt te publie
health and safety or the environment and to delete faeilities whieh have been elean&d up
pursuant to Subseetion (g) of this seetion qr delisted pursuant te Subseetion (e) of this
seGtioo.
  [(d) The department of water resourees shall file an affidavit or notiee in the real
pr-eperty reeords of the eounty in whieh a faeility is loeated identifying those faeilities
ineluded in the registry, as well as thgse faeilities deleted from the registry.
  [(e)(l) Within thirty (30) days after the survey pursuant tg Subseetign (a) gf this seetign
is ggmpleted, the department gf water resgurees shall ngtify ia ~!friting the parties
identified as respgnsible for all gr any part gf eaeh faeility gr area ineluded in the registry
prepared pursuant tg sueh l!iubseetion (a) gf the inelusign gf the faeility gr area gn sueh
sur\tey. Thereafter, twg mgnths bef9re any unineluded faeili~ gr area is added; tg the
registry, the department gf water resgurees shall ngtify in writing the parties identified
as respgnsible for all gr any part gf sueh faeility gr area gf the ggntemplated inelusign gf
sueh faeility gr area go sueh registry, Written ngtifieatigns under this subseetign shall be
by eertified mail, return reeeipt requested, by mailing ngtiee tg eaeh sueh named
respgnsible party at the party's last kngwn address.
     ((2) Ngtiee pursuant t9 Paraffraph (1) gf this subseetign shall inelude but ngt he
   limited tg a deseriptign gf the dr:;ties and restrietigns impgsed by Subseetign (f) gf this
  seGtioo.
     ((3) Ngo reeeipt gf any ngtiee mailed tg a named respgnsible party pursuant tg thi&
  subseetion shall in ng way affoet the responsibilities, duties or liabilities impelled on any
  sueh party.
     ((4) .A.ny owner or operatgr or gther named responsible party gf a faeility listed gr t9
  be listed in the registry of the department of water resoyrees pYrsuant t9 this seetion
  may request the department gf water resgyr.ees t9 delete sueh faeility fr9m the
  registry, modify the faeility's priority within the registry gr mgdify any informatien
  regarding sueh faeility by sybmitting a \!fritten statement setting forth the gNUnds gf
  the request in sueh form as the department of water resgurees may reqyire.
     ((9) Within one hundred and eighty (180) 'days after the eff9eti¥e date gf this
  provision, the department gf water resourees shall propgse rules establishing pl'99&-
  d1ues, ineluding publie hearings, for review of delisting requests submitted pursuant tg
  this sybseetion.
  [(f)(l) SYbseqyent to the listing of a faeility go the registry prepared and maintained by
the department of watel' resourees, R9 person may sYbstantially ehange the manner in
whieh the faeility is used withoYt notifying the department gf water resgurees and
reeeii.ting •1mtten approval of the department gf water resgurees for sueh ehange, A
substantial ehange gf yse shall be defined in rules adopted by the bgard and shall inelude,
but ngt be limited to, aetions sueh as the ereetign gf a building gr other strueture at sueh
faeility, the use of SYGh faeility for agrieYltural prgduetion, the paving gf sueh faeility for
yse as a roadway or parking lot, and the cireation gf a park gr gther publie or private
reereatignal faciility gn sueh faeility, Sueh Mtiee shall be in writing, addressed tg the
eMeutPJe diregt9r and sh!MI inelu~ a brief deseriptign gf the prgpgsed ehange gf use.
Sueh notiee shall be submitted in writing at least sixty days bef9re any physieal alteratign
gf the land gr eonstruetign will geeur or, in the event any alteration gr ggnstruetign is net
required tg initiate .sueh ehange gf use, at least sixty days before any cihange of use.
     ((2) The exeeutive direetgr shall not apprgve sueh ehange gf use if sucih ne'I.' use will
  interfere sigDifieantly with a prgpgeed, gnggil\g gr eompleted hazardgus waste faeility
  remedial aetion prggram at sucih faeility or expose the en'!ir-enment er publie health t9 a
  sigDifieantly inereased threat of harm.
  [(g)(l) The eleanup gf a faeility identified by the department of water resourcies in the
registry whieh ggnetitutes an imminent and substantial endangerment te the publie health
                                            3228
71st LEGISLATURE-REGULAR SESSION                                                Ch. 703, § 5
and saf.ety 9r the eR'lir9RmeRt shall pr9eeed 9R an expedited basis p1m1uaRt te the
f9119WiRg guideliReSi
        [(A) whel·e'ler p9ssible, parties ident:.Red as lial· 'q par.ties pursuant te Seeti9R
     ll(g)(l) sh9uld be R9tif.ied by the depar:..meRt 9f water res9urees 9f an 9p119rtunity te
     partieipate in a '191uRtary eleaRup P~ the faeility;
        [{:0) if all pel!t'~Rs liable uRdet Seeti9R ll(g)(l) d9 R9t V9luRteer t9 devel9p and
     implement a remedial aeti9R pregram fer the faeility, then private partie11 wh9 are
     willing to partieipate iR eleaRup aetivities '19luntarily sh9uld be all9•Ned t9 d9 119 and
     they may seek g9st ree9very pursuaRt t9 Seeti9n ll(b) "9m th9se liable partie11 n9t
     partieipatiRg iR the '19luRtary eleaRup;
      . [(C) if n9 parties ideRtif.ied aa liable uRder Seeti9R ll(g)(l) '19IURteer t9 •de'lel9p and
     implemeRt a remedial aeti9n pr9gram f9r the faeility, theR iRdependeRt third partie11
     wh9 are w411iRg t9 partieipate '191untarily iR the eleanup 9f the faeility sh9uld be
     permitted t9 e9ntraet with the department 9f water res9urees t9 d9 s9 and they may
     seek e9st ree9very pursuaRt t9 Seeti9R ll(b) frem th9se liable parties R9t partieipat
     iRg iR the 'J9IURtary g)eaRup;
        [(D) where '19luntary assistaRee R9m the private seet9r is R9t f9rthe9miRg 1 federal
     fuRds sh9uld be used f9r faeility eleaRup if sueh fuRds are timely a'lailable; aRd
        [(E) state fuRds sh9uld be used 9Rly wheR a liable party 9r iRdepeRdeRt third party
     eleanup 9r f.ederal funds are n9t timely available,
     [(2) Whene'ler the department 9f water res9urees f.inds that there eKist& aR aetual 9r
   threatened release 9f hazard9us wastes at a har&ard9u11 waste faeility listed 9R the
   registry that present& aR imminent aRd BYbstantial endangerment te the publie health
   and saf.ety 9r the en'lir9nmeRt, it may 9rder the 9wner and/9r 9perater 9f sueh faeility
   and/9r any 9ther pers9R resp9nsible f9r the release 9r threateRed release at sueh
   faeility (A) t9 de'Jel9p a -remedial aeti9n pr9gram, subjeet t9 the appreval 9f the
   department 9f water res9urees, at sueh faeility, and (:D) te implement BYeh pregram
   withiR reas9nable time limit& speeified in the 9rder. The pre'lisi9RS iR Seeti9ns !l{g), g,
   10 aRd 11 9f this Aet relating t9 administrati'Jo 9rders shall apply t9 erders issued
   pursuant t9 this paragraph.
     [(3) Whene'ler the eemmissi9n, after iR'lestigati9n 1 f.inds that there exist& a release or
   threatened release ef har&ard9us wastes at a faeility identified in the registry that;
        [(A) is eausing irreYersible er irreparable harm t9 the publfo health aRd safety er
     the en'!cireRmeRt; and
        [(:0) the immediagy ef the situati9R makes it prejudieial te the publie iRterest te
     delay aetien until an administrati'le erder Gan be issued te liable parties pursuant te
     Paragraph (2) 9f this subseetien er until a judgment GaR be entered in an appeal ef an
     administrative erder; the g9mmissien may, with the funds a'Jailable te the eemmis
     sien h9m the har&ardeus waste permit aRd dispesal fees, if lijlpre'!ed by the I..egiala
     ture, undertake immediate reme•Jal aetien at the faeility te alleviate the harm, After
     the immediate danger ef irte'lersible er irreparable harm has been alleviated, the
     eemmissieR shall preeeed pursuaRt te Paragraph (2) ef this subseetien, Findings
     required pursuaRt te this paragraph shall be in writing aRd may be made by the
     eemmissieR en aR ex parte basis subjeet te judieial review pursuant t9 the substantial
     evidenee rule as pre'lided by the Administrati'le Preeedure and T-exaa Register J~et
     (Artiele 6252 13a, VerneR's Texas CMI Statutes),
        [(C) The reaseRable expenses 9f any immediate reme'lal aetien taken by the T-exas
     Water Cemmissien may be reeeverable hem the persens deseribed in Seetien ll(g)(2)
     and the state may seek te reee'!er sueh reasenable expeRses in any eeurt ef
     appropriate jurisdietieR.                                                 .
     [(4) Whene'!er a persen erdered te eliminate an immiRent and sub11&aRtial endanger
   ment t9 the publie health and saf.ety er the en'lirenmeRt has failed te de se within the
   time limits speeified in the erder, and ne third party has a~ed te de'Jel9p and
   implemeRt a remedial aetien pregram f9r the faeility pursuant te Paragraph (l)(C) ef
   this subseetien, the departmeRt 9f water reseurees may de'lelep and implement a
   remedial aetien pregram f9r sueh faeility, The reasenable expenses gf de'Jeleping and
                                              3229
Ch. 703, § 5                                   7lst LEGISLATURE-REGULAR SESSION

 implementing euoh r-emedial aotion pregram by the department ef water reeeuroee shall
 be paid by the pereene te whem the erder was issued and the state may seek t9 reoe•.42 U.S. C. 2011 et seq.), if the release is subject to requirements with respect to
   financial protection established by the Nuclear Regulatory Commission under
    Section 170 of that Act, or, for the purposes of Section 104 of the environmental
    response law or any other response action, any release of source, by-product, or
    special nuclear mate1ial from any processing site designated under Section
    102(a)(1) or 302(a) of the Uranium Mill Tailings Radiation Control Act of 1978 (42
    U.S.C. 7912 and 7942),· and
       (D) the normal application of fertilizer.
    (5) "Removal" means the cleanup or removal of released hazardous substances,
 pollutants, or contaminants from the environment,· the actions necessary to be
 taken in the event of the threat of release of hazardous substances, pollutants, or
 contaminants into the environment,· the actions necessary to monitor, assess, and
 evaluate the release or threat of release of hazardous substances, pollutants, or
 contaminants,· the disposal of removed material,· or the taking of other actions as
 may be necessary to prevent, minimize, or mitigate damage to the public health and
 safety or to the environment that may otherwise result from a release or threat of
 release. The term also includes security fencing or other measures to limit access,
 provision of alternate water supplies, temporary evacuation and housing of threat-
 ened individuals not otherwise provided for, action taken under Section 104(b) of
 the environmental response law, and any emergency assistance that may be provid-
 ed under the Disaster Relief Act of 1974 (42 U.S.C. 5121 et seq.).
                                               3232
71st LEGISLATURE-REGULAR SESSION                                       Ch. 703, § 6
      (6) "Remedial action" means those actions consistent with a permanent remedy
   taken instead of or in addition to removal actions in the event of a release or
   threatened release of a hazardous substance, pollutant, or contaminant into the
  environment to prevent or minimize the release of hazardous substances, pollu-
   tants, or contaminants so that they do not migrate to cause substantial danger to
  present or future public health and safety or the environment. The term includes
  such actions at the location of the release as storage, confinement, perimeter
  protection using dikes, trenches, or ditches, clay cover, neutralization, cleanup of
  released hazardous substances, pollutants, contaminants, or contaminated materi-
  als, recycling or reuse, diversion, destruction, segregation of reactive wastes, dredg-
  ing or excavations, repair or replacement of leaking containers, collections of
  leachate and runoff, on-site treatment or incineration, provision of alternate water
  supplies, and any monitoring reasonably required to assure that those reactions
  protect the public health and safety or the environment. The term includes the
  costs of permanent relocation of residents and businesses and community facilities
  where the President of the United States determines that alone or in combination
  with other measures this relocation is more cost effective than and environmentally
  preferable to the transportation, storage, treatment, destruction, or secure disposi-
  tion off site of hazardous substances, pollutants, or contaminants or may otherwise
  be necessary to protect the public health or safety. The term does not include
  o/fsite transport of hazardous substances or the storage, treatment, destruction, or
  secure disposition off site of the hazardous substances, pollutants, contaminants, or
  contaminated materials unless the president determines that those actions:
         (A) are more cost effectfoe than other remedial actions;
         (B) will create new capacity to manage, in compliance with Subtitle C of the
     federal Solid Waste Disposal Act (42 U.S.C. 6921 et seq.), hazardous substances in
      addition to those located at the affected facility,· or
         (C) are necessary to protect public health and safety or the environment from a
     present or potential risk that may be created by further exposure to the continued
     presence of those substances, pollutants, contaminants, or materials,·
      (7) "Response" means removal and remedial action.
  (b)(J) The commission shall administer this section.
     (2) The commission shall cooperate with cities and towns and with agencies,
  departments, and political subdivisions of this state and the United States and its
  agencies in implementing this section and the environmental response law.
  (c)(J) The commission may enter into contracts and cooperative agreements with
the federal government to carry out removal and remedial action for a specific
disposal facility as authorized by Section 104(c)(3) of the environmental response law
or to carry out removal and remedial action with regard to a disposal facility under
Section 104(d)(J) of the environmental response law.
     (2) After notice and hearing, the commission may authorize the executive director
  to enter into contracts and cooperative agreements on behalf of the commission
  under Subdivision (1) of this subsection pursuant to terms and conditions stated in
  the commission~ order.
     (3) When acting pursuant to a cooperative agreement with the federal govern-
  ment under Subdivision (1) of this subsection, the commission is authorized to
  undertake the enforcement and remedial actions authorized under the environmen-
  tal response law as may be reasonably necessary, in lieu of or in conjunction with
  actions by the federal government.
     (4) If the commission enters into a contract or cooperative agreement under
  Section 104(c)(3) of the environmental response law, the commission shall include in
  the contract or agreement terms and conditions:
        (A) to assure future maintenance of the removal and remedial actions provided
     for the expected life of those actions as determined by the federal government;
                                         3233
Ch. 703, § 6                              7lst LEGISLATURE-REGULAR SESSION

       (B) to assure the availability of a hazardous waste disposal facility acceptable
     to the federal government that complies with Subchapter Ill of the fedt1ral Solid
     Waste Disposal Act (42 U.S.C. 6921 et seq.) for any necessary offsite storage,
     destruction, treatmen~ or secure disposition of the hazardous substances, pollu·
     tants, or contaminants,· and
        (C) to assure payment by the state of:
          (i) 10 percent of the costs of the remedial actions, including future mainte·
        nance,· or
          (ii) at least 50 percent or more of the costs as determined appropriate by the
       federal government, taking into account the degree of responsibility of the state
       for any amount spent in response to a release at a disposal facility that was
        owned by the state at the time of disposal of hazardou.; substances at the
        disposal facility.
     (5) A contract entered into with the federal government under Section 104(d)(1) of
  the environmental response law is subject to the same cost-sharing requirements
  provided for contracts in Subdivision (4)(C) of this subsection.
     (G) The state's share of reasonable response costs shall be paid for from the fund.
  (d) Before entering into a contract or cooperative agreement under Subsection (c) of
this section, the commission shall consult and work with the federal government in
determining the response that will be necessary under the contract or cooperatiiie
agreement with regard to the particular disposal facility.
  (e) The commission shall collect and shall file with the federal government any
information required by the environmental response law and rules adopted under
that law.
  (/)(1) In this subsection, "engineer or contractor" means a person, including the
employee or subcontractor of the person, who performs a contract for evaluation,
planning, designing, engineering, construction, equipmen~ or auxiliary services in
connection with the identification of a site containing a hazardous substance, the
development of a plan of response to the site, or the supervision or performance of the
response to the site.
     (2) Notwithstanding any other law or f11,le, the commission may agree in a
  contract retaining an engineer or contractor to perfotm a program of .,.,1•• tJval,
  remedial action, or cleanup of a hazardous substance in connection with a contract
  or cooperative agreement under Subsection (c) of this section to indemnify the
  engineer or contractor against any claim or liability arising from an actual or
  threatened release of a hazardous substance that occurs during the performance of
  any work, including:
        (A) damages arising from economic loss, personal injury, property damages, or
     death,·
        (B) costs and expenses, including the cost of defense of a lawsuit brought
     against the engineer or contractor; and
        (C) claims by third parties for indemnification, contribution, or damages for
     economic loss, personal injury, property daniages, or death.
     (3) In determining whether to contract to indemnify an engineer or contractor
  under this subsection, the commission shall consider the availability of insurance to
  the engineer or contractor for the claims and liabilities against which the commis·
  sion may indemnify the engineer or contractor under this subsection on the date
  the engineer or contractor enters into a contract to perform services covered by this
  subsection. The commission may not contract to indemnify an engineer or contrac·
  tor under this subsection if the engineP.r or contractor cann?t demonstrate that
  insurance is unavailable at a reasonable cost or if another engineer or contractor
  submitting a comparable proposal demonstrates that insurance is available at a
  reasonable cost.
                                         3234
71st LEGISLATURE-REGULAR SESSION                                             Ch. 703, § 8
    (4) The commission is not obligated to award a contract if it determines adequate
  liability insurance is not available to an engineer or contractor and that the award
  of the contract is not in the public interest.
    (5) The commission may not contract to indemnify an engineer or contractor
  under this subsection unless the federal government agrees in a contract or
  cooperative agreement to in turn indemnify the commission under Section 119 of
  the environmental response law. The commission~ decision to contract or not to
  contract to indemnify an engineer or contractor may be made as an executive act
  without an adjudicative public hearing and is not subject to judicial review.
    (6) An engineer or contractor performing a program of removal, remedial action,
  or cleanup of" hazardous substance under a contract entered into in connection
  with a contract or cooperative agreement under Subsectio·,i (c) of this section that
  results in an actual or threatened release of hazardous substance is not liable
  under Sections B(a), B(b), or Bb of this Act for an act or failure to act during the
  performance of the contract. Nothing in this subdivision shall in any way limit 01·
  otherwise affect the liability of an engineer or contractor in any other action.
    ('l) Subdivisions (2) and (6) of this subsection do not apply to a grossly negligent
  act or omission or to wilful misconduct of an engineer or contractor during the
  performance of a contract.
    (8) Notwithstanding any other lau•, an engineer or contractor performing a
  program of removal, remedial action, or cleanup of a hazardous substance under a
  contract entered into in connection with a contract or cooperative agreement under
  Subsection (c) of this section is liable for a grossly negligent act or omission or for
  wilful misconduct that results in a.n actual or threatened release of a hazardous
  substance in violation of Section 8 or Bb of this Act only to the extent that the ac~
  omission, or misconduct caused the violation.
   SECTION 7. Subchapter H, Chapter 26, Water Code, is repealed.
   SECTION 8. Except as otherwise provided in this section, all facilities that were listed
on the state registry prior to September 1, 1989, remain on the registry and are subject to
all provisions of the Solid Waste Disposal Act (Article 4477-7, Vernon's Texas Civil
Statutes), as amended by this legislation.
      (1) This legislation shall have no effect on facilities that are subject to an administra·
   tive order issued pursuant to Subsection (g), Section 8, Solid Waste Disposal Act
   (Article 4477-7, Vernon's Texas Civil Statutes), requiring remedial action if the order
   was issued prior to September 1, 1989.
      (2) With respect to facilities for which an approved work plan has been developed for
   a remedial investigation/feasibility study or other similar approved study, this legisla·
   tion shall have no effect on those activities covered by the approved plan. Activities
   that are not covered within the approved work plan by September 1, 1989, shall take
   place in accordance "ith the Solid Waste Disposal Act (Article 4477-7, Vernon's Texas
   Civil Statutes), as amended by this legislation.
         (A) Where activities at such facilities are completed in compliance with the ap-
      proved work plan, participating responsible parties shall not be assessed costs for
      commission oversight of the remedial investigation/feasibility study or other similar
      approved study. Following completion of the approved work plan, all other activities
      regarding this facility shall take place in accordance with the Solid Waste Disposal
      Act (Article 4477-7, Vernon's Texas Civil Statutes), as amended by this legislation.
         (B) Where activities are not conducted or completed in compliance \vith the ap-
      proved work plan, the commission is authorized to conduct or complete the remedial
      investigation/feasiLility study or similar study and seek recovery of the costs of
      conducting or completing the study, as well as any applicable oversight costs, from
      the potentially responsible parties. Following completion by the cor.'\mission of the
      study, all other activities shall take pie•:• in accordance with the Solid Waste Disposal
      Act (Article 4477-7, Vernon's Texas ( 1\Til Statutes), as amended by this legislation.
         (C) With respect to those facilities previously listed on the state registry for which
      a remedial investigation/feasibility study or other similar study has not been ap-
                                             3235
Ch. 703, § 8                                  71st LEGISLATURE-REGULAR SESSION

    proved as of September 1, 1989, the executive clirector shall notify all potentially
    responsible parties that they have 90 days from roceipt of the notice within which to
    make a good faith offer under Subdivision (7) of Subsection (c) of Section 13 of the
    Solid Waste Disposal Act (Article 4477-7, Vernon's Texns Civil Statutes), as amended
    by this Act. All other activities regarding the facility shall take place in accordance
    with that Act as amended by this legislation.
  SECTION 9. This Act takes effect September 1, 1989.
  SECTION 10. The importance of this legislation and the crowded condition of the
calendars in both houses create an emergency and an imperative public necessity that the
constitutional rule requiring bills to be read on three several days in each house be
suspended, and this rule is hereby suspended.
  Passed the Senate on April 27, 1989, by a viva-voce vote; and that the Senate concurred
       in House amendment on May 24, 1989, by a viva-voce vote; passed the House, with
       amendment, on May 22, 1989, by a non-record vote.
  Approved June 14, 1989.
  Effective Sept. 1, 1989.

                                      CHAPTER 704
                                       S.B. No. 1521
                                              AN ACT
relating to the creation of the waste reduction advisory committee and to waste minimization and
reduction activities of the Texas Water Commission.
  Be it enacted by the Legislature of the State of Texas:
  SECTION 1. Subsection (g), Section 3, Solid Waste Disposal Act (Article 4477-7,
Vernon's Texas Civil Statutes), is amended by adding Paragraphs (3) and (4) to read as
follows:
    (3) The waste reduction advisory committee, which shall advise the commission
  and interagency coordination council on matters the council is required to consider
  under Subdivision (2) of this suhsection, is created. The committee also shall advise
  the commission and council on:
       (A) the appropriate organization of state agencies and the financial and
    technical resources required to aid the state in its efforts to promote waste
    reduction and minimization;
       (B) the development of public awareness programs to educate citizens about
    hazardous waste and the appropriate disposal of hazardous waste and hazardous
    materials that are used and collected by households,·
       (C) the provision of technical assistance to local governments for the develop-
    ment of waste management strategies designed to assist small quantity genera-
    tors of hazardous waste; and
       (D) other possible programs to more effectively implement the state's hierarchy
    of preferred waste management technologies as set forth in Section 3(e)(l) of this
    Act. The committee shall be composed of nine members with a balanced represen-
    tation of environmental and public interest groups and the regula~ed communi-
    ty.
    (4) The commission shall establish a waste minimization and reduction group to
  assist in developing waste minimization and reduction programs and to provide
  incentives for their use so as to make such programs economically and technologi-
  cally feasible.
  SECTION 2. The importance of this legislation and the crowded condition of the
calendars in both houses create an emergency and an imperative public necessity that the
constitutional rule requiring bills to be read on three several days in each house be
                                             3236
           APP. J

TCEQ Agenda, February 10, 2010
The Agenda document                    below includes hyperlinks                     docket        numbers highlighted                in   blue     that   enable the user

to    view   agenda backup              documents            documents        pertaining to aparticular                          matter that have been filed with

the    Office of the Chief Clerk                   OCC         To view        all   agenda         backup       in   person        including those documents                  not

found    in   the hyperlinks            below please          visit    OCC      at    12100 Park 35 Circle Building                           F   Suite     1101       30   TAC
     1.10

Updates       to    backup documents               will     be noted by a purple indicator                           Please note that some documents                        such
as those of          in egular     size       ie oversized            maps      cannot be viewed here                       and     that    color    documents         will    be

                                                                                                            d
posted here          in   black   and        white      Finally parties are                still       required      to   submit an original and 7 copies                       of
documentsfiledfor Commissifm consideration                                     30 TAC              i   10

ChainnanBryan              W      Shaw PhD                                      AGENDA
Commissioner              H S Buddy GarcE
Commissioner Carlos Rubenstein                                           Febmmy           10,2010

                                   TEXAS COMMISSION ON ENVIRONMENTAL                                                         QUALITY

                                                                               9 30       AM
                                                                       12100 Park 35 Circle
                                                                       Room 201S Bldg E

               PROPOSALS FOR DECISION

Item    1      TCEQ         Docket           No 2007 1867 UCR SOAH                                 Docket       No 582 8 1023                     Consideration         of    the

               Administrative                Law       Judge's        Proposal         for         Decision          and     proposed          Order       regarding          the

               applications        of Texas Landing                   Utilities      to   change         its   water rates and tariff             charges under water

               Certificate         of COINenience                and     Necessity                 CCN          No        11997      in Polk        and     Montgomery
               Counties           Texas and            to   change     its   sewer     rates       and      tariff   charges illlder          sewer    CCN No           20569
                in   Polk County Texas pursuant                         to rules      of the       Texas       Commission on EINronmental Quality                               in

               30    TAC     Chapter 291           and Texas          Water Code Chapter 13                          The Commissionwill                also     consider the

               application related filings                   record evidence              and exhib its exceptions                  and     replies        Ron Olson

Remand        the    matter to the           ALJ   in order      to    1     take necessary              evidence         and complete the blank information

regarding Texas Landing                  Utilities           TLU's           total   a now able rate case expenses                     through the Connrrission's

February       10     2010     Agenda            2     detennine        the    proper        rate       case expense             surcharge        amoilllt      and time of

collection         3 inc1ude       a finding on the Public utility                     Commission's 2010 refimd                            interest rate    of 0.61           fill

in the time limit on completing                    the cred itlrefimd in Ordering                       Provision         No 2      and specifY 0.61              interest in

Ordering       Provision          No 2 4           implement the ALl's recormnended typographical                                            changes       to   Findings       of

Fact   Nos     28 and 46 and Conc1usion of Law                           No 15 5            inchlde a find ing and order ing provision that denies

TLU's        requested      tap    fee       and other       tariff    charge        increases           6     lnchlde      a    11l1ding    and ordering          provEion
regarding      the amoilllt of transcript                   costs     and    that    TLU      pay        100         of   that   amOlmt and           7    take necessmy

evidence      and provide          fi   n1 her analysE of the            line loss        issue the appropriate mechanism to handle the                                 ESue
and the       implication         of    di   frerent   ganonage        amounts used                for   the variable            cost portion        of the     rate   design

BGCR an             agree

                                                                                                                                                                   VODA_AR_00051125
Item       2   TCEQ          Docket          No 2008 1940 WR SOAH                              Docket          No 582 09 2350                      Cons ideration of            the

               Administrative            Law       Judge's      Proposal fur           Dec    i   ion    and Order regarding the Executive                            Director's

               report       and petition fur recommendation                             to    add three        noncontiguous              areas         within the      Dallam
               County            Priority         Groundwater               Management                    Area        to    the     North         Plains      Groundwater
               Conservation            District     pursuant to Chapter 35 and 36 of the Texas                                      Water Code             and the      rules    of
               the    Texas        Counnission            on Enviromnental                    Quality       specifically            30     TAC          Chapter       293     The
               proposed          addition         of the 1hree        areas       to    the    North Plains             GrOlmdwater Conservation                        District

               would        be   in    the   Dallun County               Priority       GrOlmdwater              Management Area                    in    Dallam County
               Texas        The       Commission will                also    consider          related      filings          exceptions        and        replies           peggy
               Hunka        Christiaan Siano

Adopt the ALJ's proposed                     Order      as    modified by the Exceptions                        accepted          by the ALJ in            his   January        15
2010 Response           to   Exceptions            and Replies           BGIBS CR abstained

Item       3   TCEQ         Docket       No l008 1684 WQ E SOAH                                    Docket       No 582 09 3658                     Consideration            of the
               Administrative            Law       Judge's      Proposal for Decision                     and Order assessing administrative                          penalties

               and requiring            certain     act   i   ns   of Dale Werlinger                 in Robertson                County Texas TCEQ ID                         No
               RNI05488662               regarding water              quality      vio1ations pursuant to                    Tex Water Code                 Chapters 7 and

               26,30 Tex           Admin          Code Chapter 281 and the                        rules   of   the    Texas Commission on Environmental
               Quality           The    Commission will               also       consner          timely filed         exceptions          and replies            phillip       M
               Goodwin

Adopt the Executive Diector's revised proposed Order which contains                                                        the Executive Director's               exceptions

to   the   AU's     proposed Order                CRI   BG         an agree

               HEARING REQUESTSIREQUESTS                                           FOR RECONSIDERATION

Item   4       Docket        No 2009 1866 DIS Consideration of an                                         application           by Polk County Fnsb Water
               Supply       D trictNo 2 for approval of a standby fee                                      The       District's     applicat   i        n requests     approval

               to    levy    a unifonn            armual standby fee               to       supplement         its    operations         and maintenance account
               pursuant to Texas              Water Code Section 49.231                             The Commission will consider the application

               timely public counnents                    hearing requests responses                       and replies             Skip Ferris Jose           L   Caso

Grant the hearing requests                    of Malcolm David               Wyatt and Steve Zhanel and                             refer    the matter          to   the    State

Off k e of Administrative Hearings with the                               referral to         ADR        for the time period that runs                     concurrent with

the scheduling period for the                     SOAH        prelirniruuy       hearing          BGCR an              agree

               EMERGENCY ORDERS

ItemS          Docket        No 2009 2077 PW                         E     Consideration             of whether            to   modifY       aff1llll      or set aside the

               Emergency              Order       Esued       on December               29 2009            by the          Executive        Diector           of the        Texas

               Commission on Enviromnental Quality pursuant                                         to    Tex Water Code chs                   5 and       13 Tex        Health

                    Safety Code          ch 341           and the        rules    of    the    Texas       COnmllssion             on Environmental               Quality to

               address       the   abandonment of a                  publ        water        system by          Don        English dba             English       Acns        aka
               Coyote        Water           in   Jim     Wells       County TCEQ                    ID     No        RNI02670783                  to    ensure       continued

               operation of the Utility                 and     to   provide      continuous             and adequate             service    to    the customers              The
               Emergency Order appointed Lonzo Gale                                    as   ternporarymanager                   of the   Utility         Jim Sallans

                                                                                                                                                                       VODA_AR_00051126
AfIim       the    Executive          Directors        Emergency Order against                     Don    English dba English Acres                       aka Coyote

Water and appointing Lonzo Gale                        as    temporary manager              CRlBG          an agree

Item    6     Docket        No 2009 1069 UCR E                         Consideration          of whether             to   modifY       affirm        or set aside the

              Emergency               Order       issued     on     January     7 2010             by     the        Executive        Director        of the        Texas

              COlrmllssion             on Environmental             Quality pursuant to            Tex Water Code chs 5 and 13 Tex                                 Health

                    Safety Code              ch 341       and the rules       of the Texas Commission on Environmental                                      Quality       to

              address       the       abandonment            of   a retail public        utility       Utility        by Cain Addition Homeowners
              Association             CAHA          and John Lamar Cain                in Kleberg          County TCEQ                 ill    No     RN105504567
              to    ensure       continued          operatim of the Utility            and    to    provide          continuous        and adequate          selVice      to

              the        customers            The     Emergency         Order renewed               the    appointment                of Rio     Bravo       Resource
              ConselVation                    Development           Corporation             RC D          as    temporary             manager        of the        Utility

                  peipey    Tang

AfIrm the         Executive Directors Emergency Order against Cain Addition Homeowners                                                         Association         CAHA
and John Lamar Cain with the Executive                            Diector's requested              modificatim              BGIBS CR            abstained

             SUPERFUND

Item   7      Docket         No 2009 1706 SPF                       Consiieration           of a       Final    Administrative               Order      Filal      Order
              pursuant           to    Texas      Health      and    Safety     Code        Sections           361.188         and     361.272        for the       Voda
              Petroleum               Inc     State     Superfimd       Site       RN101639649                 which         is   Dcated       north northeast            of
              Clarksville City Texas                    near the iltersection            ofFM          2275 and           FM      3272 Gregg County                      The

              Final Order ilcbJdes the listing                      of the   Site   on   the state registry ofSuperfim d sites a descript im

              of the selected            remedial action            and determilation              ofresponsible parties The                     Order      a ho    orders

                                                                                             The                                              wth            foThwilg
                                                                                            2
              the    responsible             parties   to    remediate       the    Site                Site    is    contaminated                    the

              chem         all   of concern            Dichbroethylene              cis l          benzene propyfuenzene                       n MTBE              methyl
                                        ether                                        toluene                                         1,1,1

                                                                                                                                        m
              tertiary butyl                         tetrachloroethylene                               trichloroethane                          trichloroethylene

              trimethyfuenzene                1,2,4 trimethy1benzene                 1,3,5 vilyl          chloride xylene                      xylene       0 xylene
             p      dichloroethylene                1,1     and dichloroethane           1,2        The proposed remedy for the                       s oil at this Site

              ilchlrles      excavation and off site                d i3posalofthe          contaminated soil                  The proposed          remedy        for   the

                                                                                                   of
                                                                                                       G
             groundwater                at    the     Site    ilcbJdes       installation                reactive           biobarriers         to    decontamilate

             groundwater                 Charmaine Backens              Carol Boucher              P

Adopt the Administrative Order proposed by the Executive Director                                               CRIBS BG              opposed

                  nSCELLANEOUSNL TTER

Item   8     Docket         No         2009 1934 UCR                 Consideration          of a request              for   a Order          approvilg      a contract

             designating              service     areas     between the City of Gunter                     water          CertiIx ate        of Convenience              and
             Necessity                CCN No 13105                 and Marilee Special              Utility      District          SUD         formerly      known        as

             Glll1ter      SUD          water       CCN No 10150             in Grayson       County            Texas pursuant to Texas                  Water Code
             Section        13.248           Under the agreement              Marilee       SUD         will transfer          approximately          382.477        acres

             of    its   water        CCN    to   the City of Gunter           Eril Selvera             Heidi    Graham

Approve      the agreement             designatilg service            areas   between Marilee Special                       Utility    District      and the City of
Gunter under        TWC          Section 13.248 and issue the Executive                      Directors revised proposed                        Order      BGCR all
agree

                                                                                                                                                              VODA_AR_00051127
            AIR QUALITYENFORCEMENT AGREED ORDERS

Item   9    Docket      No       2009 0219        AIR E          Consideration       of an Agreed       Order    assessing       administrative

            penalties     against Equistar Chemicals                      LP   in Harris   County RN102926920                    fur air quality

            violations     pursuant to         Tex   Health          Safety    Code ch 382 Tex Water Code ch                   7   and the rul s

            of   the     Texas     Commission             on Erwiromnental            Quality      including      specifically         30     Texas
            Administrative        Code ch 60             Rebecca Johnson CariMichelLa Cail1e

Approve the Agreed Order                CR BG all         agree

Item 10     Docket      No       2009 1564 AIR E                 Consideration       of an Agreed Order assessing                administrative

            penalties    and requiring          certain    actions    of Rio Grande Valley Sugar Growers Inc                           in   Hidalgo

            County RNI00825405                    fur    air   quality vio1ations     pursuant     to   Tex   Health          Safety        Code ch
            382 Tex Water Code ch                    7   and the niles of the Texas         Commission on Enviromnental                     Quality
            ncluding      specifically         30 Texas Adrn inf tratNe            Code    ch    60     Kirk Schoppe           CariMichel La

            Caille

Approve the Agreed Order                CRlBG all         agree

Item 11     Docket      No       2009 1597        AIR E          Consideration       of an Agreed Order assessing                administrative

            penalties         against    Frontera              Generation       Limited         Partnership       in        Hidalgo         County
            RN102344645           for    air   quality viohtions          pursuant to     Tex Heath           Safety Code          ch 382 Tex
            Water      Code ch     7    and the rul s of the Texas              Commission on EIIViromnental                 Quality includ ing

            specifically      30 Texas Administrative Code ch 60                      Kirk Schoppe        CariMichelLa Caine

Approve the Agreed Order                CRBG all          agree

Item   12   Docket      No      2009 1417 AIR E                  Consideration       of an Agreed Order assessing                administrative

            penalties    against     Cabot Corporation               in   Gray County RNI 0021 0582              for air quality violations

            pursuant     to    Tex Heahh             Safety      Code     ch 382 Tex Water Code ch                7     and the       rules   of the
            Texas      Commission on Etwiromnental Quality incllding specll1CaDy                                 30 Texas       Administrative

            Code ch      60      Kirk Schoppe            CariMichelLa Caine

Approve the Agreed Order                CRlBG        an agree

Item   13   Docket      No      2009 1420 AIR E                  Consideration       of an Agreed Order assessing                administrative

            penalties      against      Clearstream             Wastewater         Systems       InCOlOrated           in    Hardin         County
            RNI00214659           for    air quality      viohtions       pursuant to     Tex Heahh           Safety    Code ch 382 Tex
            Water Code ch          7    and the ru es of the Texas Commission on Erwionmental Quality includ ing
            specifically      30 Texas Administrative Code ch                   60    Rebecca Johnson Cari             M     he lLa Caille

Approve the Agreed Order                CRlBG        an agree

Item 14     Docket      No      2009 1386         AIR E          Consideration       of an Agreed Order assessing                administrative

            penalties    and requiring         certain    actions    ofBASF        Corporation     in   Harris       RN 100225689
                                                                                                                 County
            for air quality violations pursuant to                Tex     Health      Safety Code       ch 382 Tex Water Code ch 7

                                                                                                                                         VODA_AR_00051128
             and the     rules   of   the   Texas     Commissim on                     Envirornnental       Quality including         specifically   30
             Texas AdministratNe Code                ch 60        Nadia Hameed                 Cari MichelLa Caille

Approve the Agreed Order               CRlBG all          agree

Item 15     Docket       No      2009 0822 AIR E                 Consideration               of an Agreed Order assessing administrative
             penalties   and requiring        certain actions           ofW             W    Fiberglass     Tank Company         in   Gray County
            RNI02004314                                                                            Tex              Safety Code        ch 382 Tex
                                                    n
                                  for   air quality       viohtions          pursuant to                 Health

            Water Code ch          7    and the           s of the Texas               COnnnlssion on Environmental             Quality     including

             specifically     30 Texas Administrative Code ch                          60     Suzarme Walrath CariMichelLa Caille

Approve the Agreed Order               CRlBG        all   agree

Item 16     Docket       No      2009 1335 AIR E                 Consideration               of an Agreed Order assessing administrative
            penalties     and requi ing        certain      actions          of Flint        Hills   Resources      LP    in Jefferson      County
            RNI00217389                                                                            Tex              Safety Code        ch 382    Tex
                                                    n
                                  for   air quality       viohtions pursuant                  to         Health

            Water Code ch          7    and the           s of the Texas               COnnnlssion on Environmental             Quality     including

             specifically     30 Texas Administrative Code ch                          60     AudraBeno it        Cari   M   ichelLa Caille

Approve the Agreed Order               CRlBG        all   agree

Item   17   Docket       No    2009 1230        AIR E            Consideration               of an Agreed Order assessing             administrative
            penalties       aga ilst E I            du     Pont         de    Nemours              and     Company       in   Jefferson     County
            RNI00216035                                                                            Tex                                 ch 382 Tex
                                                    n
                                  for   air quality       viohtions pursuant                  to         Health     Safety Code

            Water Code ch         7     and the           s of    the   Texas          COnnnlssion on Environmental             Quality Deluding

            specifically      30 Texas Administrative Code ch                          60     AudraBenoit         Cari   M   ichelLa Caille

Approve the Agreed Order               CRlBG        all   agree

Item 18     Docket       No      2009 1394      AIR E            Consideration               of an Agreed      Order assessing        administrative
            penalties     and    requiring certa in         actiJns          of   GB        Bios ciences    Corporation        in Harris County

            RNI00238492                                                                            Tex                                 ch 382    Tex
                                                    n
                                  for   air quality       viohtions          pursuant to                 Health     Safety Code

            Water Code ch          7    and   the         s of the Texas               Connnission       on Environmental       Quality including

            specifically      30 Texas Administrative Code ch 60                              Roshondra      Lowe   Cari Michel La CaiRe

Approve     the Agreed Order           CRlBG        all   agree

Item 19     Docket       No      2009 0994 AIR E                 Consideration               of an Agreed Order assessing administrative

            penalties     and     requiring         certain     actions           of    DCP Midstream LP                 in    Crockett     County
                                                                                                   Tex
                                                    n
            RNI00219278           for air quality viohtions                  pursuant         to         Health     Safety Code        ch 382 Tex
            Water Code ch         7     and the           s of the Texas               Connnission on Environmental             Quality including

            specifically      30 Texas Administrative Code ch 60                              James Nolan Cari MichelLa Caille

Approve     the   Agreed Order         CRlBG        all   agree

Item   20   Docket       No      2007 0580      AIR E            Consideration               of an Agreed      Order assessing        administrative

            penalties    against Zoltek        Corporation              in Taylor           County TCEQ ID          No RN100543867             for air

            quality viJlations         pursuant to        Tex     Water Code ch                7   Tex     Health    Safety Code        ch 382    and

                                                                                                                                            VODA_AR_00051129
            the    rules    of the Texas         Commission on Erwirornnental                      Quality inc1uding       specifically     30 Tex

            Admin Code ch 60                    Laurencia Fasoyiro Lena Roberts

Approve the Agreed Order                    CRlBG all        agree

Item2L      Docket         No        2009 1380        AIR E         Consideration          of an Agreed Order assessing administrative
            penalties       against Georgia Pacific                Wood Products LLC in Newton County RN102433299                                for

            air quality violations            pursuant to         Tex HeaTh   Safety Code ch 382 Tex Water Code ch 7                            and

            the ru1es       of the Texas CommEsion on Erwirornnental                              Quality inc1uding      specifically     30 Texas
            Administrative            Code ch 60            Suzanne Warath            Cari MichelLa CaiRe

Approve the Agreed Order                CRlBG         all   agree

            EDWARDS              AQUIFER ENFORCEMENT AGREED ORDERS

Item   22   Docket        No 2008 1495 EAQ E                         Consideration         of an Agreed Order assessing administrative
            penalties       agailst Charles           Knight and Nancy Knight in Williamson County                                TCEQ      ID Nos
            RN105532782               and   RN104671565             mrwater quality          violations     pursuantto   Tex Water Code chs
            7     and     26    and    the    rules    of the        Texas     Commission          on     Envirornnental        Quality   inc1uding

            specifically        30 Tex Admin Code ch 60                        Jennifer     Cook     Lena Roberts

Approve the Agreed Order                CRlBG         all   agree

Item   23   Docket        No 2009 1404 EA0 E                         Consideratim of an Agreed Order assessing administrative
            penalties       against the        City of Shavano              Park      in   Bexar County RN105749592                    for Edwards

            Aquifer        violations        pursuant       to    Tex    Water    Code      chs    7 and 26 and the          rules     of the Texas
            Commission on Enviromnental                          Quality inc1uding         specifically    30 Texas Administrative Code ch

            60      Harvey Wilson             C ari   Michel La CaiRe

Approve the Agreed Order                CRlBG         all   agree

            FIELD CITATIONS

Item   24   Docket        No 2009 1822 VOC E                            Consideration       of   a Fieli    Citation assessing       administrative

            penalties       and requiring certain actions                of Dwayne Stailey           in   Collin   County RN103406575            for

            occupational         kensing        violations         pursuant to     Tex      Health         Safety Code   cll     341    Tex   Water
            Code ch         37   and the rules ofthe              Texas Conmrission           on Envirornnental      Quality         Kirk Schoppe

            CariMichel La CaiRe

Approve the Field Citat nfi             CRlBG         all   agree

Item 25     Docket         No        2009 1823        WOC E             Consideration       of a Fieli      Citation assessing       administrative

            penalties          and    requiring       certain        actions     of    Bobby         G     Addington       in    Collin    County
            RNI05734057               for    oecupationallicensing             violations     pursuant to     Tex   Health        Safety Code    eh
            341 Tex Water Code ch 37                        and the rules of the Texas             Conmrission      on Erwiromnental        Quality

            Kirk Schoppe              CariMichel La Cai11e

Approve the       Field    Citat nu     CRlBG         all   agree

                                                                                                                                           VODA_AR_00051130
Item   26   Docket      No      2009 1837           WOC E          Consideration            of a    Fieli    Citation assessing      administrative

            penalties    and requiring         certain actions          of Maxwell             Barker in Brown County RN103286522
            for occupationallicens            ilgviolations        pmsuant          to   Tex   Health         Safety Code     ch 341    Tex Water
            Code ch 37          and the rules of the Texas               Commission on EINirornnental                   Quality      Kirk Schoppe

            CariMichel La CaiRe

Approve the     Field   Citatnn       CRlBG         all   agree

Item   27   Docket      No      2009 1830 WOC E                    Consideration            of a Fieli       Citation assessing      administrative

            penalties    and requiring         certain actions          of Jeremy King in Harris County RNI03358636                                  for

            occupationallXensing              vio1ations     pmsuant          to    Tex     Healfu          Safety Code      ch 341     Tex Water
            Code ch      37     and fue     ru1es   ofthe Texas Commissionon EINironmental Quality                                   Kirk Schoppe

            Cari Michel La CaiRe

Approve the Field Citatnn             CRlBG         all   agree

Item   28   Docket      No       2009 1838 WQ E                   Consideration           of    a Field Citation assessing           administrative

            penalties    and requi ing          certain     actions      of    Don       W     Bynwn         dba American Auto          Salvage       in

            Jefferson        County RNI01951366                   fur   water quality violations             pursuant to     Tex   Water Code ehs
            7   and     26   and   the      rules    of the       Texas       Commission on                 Environmental      Quality       nclud   ilg

            specifically      30 Texas Administrative Code ch 60                            Jordan Jones        CariMichelLa        Cail1e

Approve the Field Citatnn             CRlBG         all   agree

Item   29   Docket      No       2009 1719          WO E          Consideration           of    a Fiell      Ciation    assessing    administrative

            penalties    and requiring certain actions                  of Daniels Building                   Construction Inc in Jefferson
            County RNI05793731                  for water quality violations                   pursuant to     Tex Water Code chs 7 and 26
            and the m1es of the Texas                 Commissnn on                  Envirornnental          Quality includ ing specifically          30
            Texas Administrative Code ch 60                       RalVey Wilson Cari MichelLa Caille

Approve the Field Citatnn             CRlBG         all   agree

Item 30     Docket      No       2009 1745          VQE           Consideration           of    a   Fiell    Ciatioll   assessing    administrative

            penalties    and requiring certain             actions      of Joe Williamson              Construction          Company    in   Hidalgo
            County RNI05794705                  for water quality violations                   pursuant to     Tex Water Code ehs            7 and 26

            and the     rules    of   the   Texas Commissnn on Erwirornnental                               Quality includ ilg      specifically     30
            Texas Administrative Code ch 60                       Jordan Jones CariMichel                    La CaiRe

Approve the Field Citatnn             CRlBG         all   agree

            INDUSTRIAL             OR HAZARDOUS WASTE ENFORCEMENT AGREED ORDER

Item   31   Docket      No      2009 0475           IHW E         Consideration           of an Agreed Order            assessing    administrative

            penalties and requiring certain actnus                       ofMULTI CHEM GROUP LLC                                in Sutton     County
            RNI03948733            for industrial and hazardous                    waste violations         pmsuant     to   Tex   Health      Safety

            Code ch 361 Tex Water Code ch                         7     and   the   rules    of the Texas Commiss im 011            EIN irornnental

                                                                                                                                             VODA_AR_00051131
            CariMichel
            Quality       including

                         La   Caille
                                         specifically         30 Texas Administrative Code ch                         60      Michael       Meyer

Approve the Agreed Order                CRlBG        all   agree

            INDUSTRIAL              WASTE DISCHARGE ENFORCEMENT AGREED ORDER

Item   32   Docket       No       2009 0649         IWD E           Consideration         of an Agreed Order assessing administrative

                                                                                               L LC

            CariMichel
            penalties      against      DuPont Performance Elastomers                                    and Lucite International Inc                   in

            Jefferson         County RNI00218239                    and   RN100216035               fur water quality violations             pursuant to

            Tex Water Code               chs    7    and    26 and        the   rules    of the      Texas     Commission on Enviromnental
            Quality including            specifically      30 Texas        Admi ristrative          Code ch 60             Jorge Ibarra      PE
                         La   Caille

Approve the Agreed Order                CRlBG all          agree

            LICENSED IRRIGATORS                            ENFORCEMENT AGREED ORDER

Item   33   Docket        No      2009 1552 LII E               Consideration            of an Agreed              Order assessing      administrative

            penalties      against      Taylor       B     McLemore             in Wise       County RNI05700843                      fur   occupational

            licensing      vi lations     pursuant to          Tex     Water Code             chs   7   and    37 Tex         Occupations      Code    ch
            1903     and the rules of the Texas                Commission on Environmental                          Quality    including     specifically

            30 Texas Administrative Code ch                     60        Brianna Carlson           CariMichelLa           Caille

Approve the Agreed Order                CRlBG        all   agree

            MULTI MEDIA MATTER ENFORCEMENT AGREED ORDERS

Item 34     Docket       No 2009 1178 MLM E                         Consideration         ofan Agreed              Order assessing      administrative

            penalties      against Curtis Evans in Jeff Davis                     County RN103000006                     for municipal solid waste

            and    air   quality violations         pursuant to       Tex       Health        Safety Code           chs 361 and 382 Tex Water

            Code     ch       7   and   the    rules     of   the    Texas       Connnission         on Erwiromnental             Qua1i1y      includ ing

            specifically       30 Texas Administrative Code ch                     60     Clinton       Sims Cari MichelLa Cail               b

Approve the Agreed Order                CRlBG        all   agree

Item   35   Docket       No       2008 1136         MLM E           Consideration         of an Agreed Order assessing                  adnrinistrative

            penalties      against      Mark        Forster     and       Linda     Forster in Johnson                   County TCEQ              ID   No
            RNI04947023 for              air   quality and municipal solid waste violations                          pursuant to      Tex Water Code
            ch 7 Tex Health                   Safety Code       chs 361 and 382                and the m1es of the            Texas    Conmrission on

            Enviromnental Quality                   including       specifically         30    Tex      Admin         Code     en     60      Anna     M
            TreadweD Lena Roberts

Approve the Agreed Order                CRlBG        all   agree

Item   36   Docket       No       2009 1261 l tlLM E                Consideration         of an Agreed Order assessing                  adnrinistrative

            penalties      and requiring       certain actions         of Wesley Vanderpool in Starr County RNI04159264
            for   municipal solid waste             and water       quality violations         pursuant       to   Tex   Health        Safety Code     en

                                                                                                                                                VODA_AR_00051132
            CariMichel
            361 Tex Water Code cbs
            Quality incbding

                      La   Caille
                                                7 and

                                     specifically
                                                        26
                                                     30 Texas
                                                              and the    rules

                                                                   Ad rninEtratNe
                                                                                 of the Texas Commission on Erwironmental

                                                                                           Code     ch 60           Jolm Shehon

Approve the Agreed Order            CRlBG    an agree

Item 37     Docket      No    200S 1521 MLM          E      Consideration        of an Agreed Order assessing administrative
            penalties and requiring      certain actions       of City   ofColUs          Christiin Nueces            County TCEQ ID
            No RN101385151            for public      drinking     water     and water      quality       VDlations     pursuant to      Tex
            Water     Code cbs 7 and 26 Tex               Health        Safety     Code    ch    341      and the   rules    of the Texas
            Commission on Enviromnental               Quality      inchding       specifically      30    Tex Admin         Code   ch 60
             KariL      Gilbreth LenaRoberts

Approve the Agreed Order            CRlBG an        agree

            MULTI MEDIA MATTER ENFORCEMENT DEFAULT ORDER

Item   38   Docket     No     2009 0569 MLM           E     Consideration        ofa   Default      Order assessing administrative
            penalties   and requirilg    certain     actions   ofTeny        L    Babb Sr          elba   Twin Oaks Mobile Home
            Park     in Henderson     County TCEQ ID             No RNI01192995              fur   public    drinking    water and water

            rights   violatDns    pursuant to   Tex Water Code cbs            5 and    11 Tex       Health        Safety Code ch         341
            and the rules ofthe Texas       Commissionon Enviromnental                  Quality          peipey   Tang Lena Roberts

Approve the Default Order           CRlBG    all    agree

            MUNICIPAL SOLID WASTE ENFORCEMENT AGREED ORDERS

Item   39   Docket     No     200S 0115    MSW E            Consideration        of an Agreed Order assessing administrative
            penalties   and requiring    certain    actDns     of Marvin      Wayne       Taylor in Shelby County               TCEQ      ID
            No RNI05362701 for nnmicipal solid waste and used                             oil violations      pursuant to     Tex Water
            Code ch 7 Tex Healh Safety Code cbs 361 and 371                             and the rules of the Texas Commission

            on Enviromnental        Quality inchding          specifically    30 Tex Admin Code ch 60                        Laurencia    N
            Fasoyiro Lena Roberts

Approve the Agreed Order            CRlBG    an agree

Item   40   Docket     No     2007 1197    MS V E           Consideration        of an Agreed Order assessing administrative
            penalties   against   N E Construction LLP              in Dallas      County       TCEQ ID No RN105242549 fur
            nnmicipal solid waste violations          pursuant to    Tex Water Code ch            7 Tex Health  Safety Code

            ch 361 and       the rules of the Texas      Connni sion on       Environmental          Quality including        specifically

            30 Tex Admin Code ch 60                 Xavier Guerra Lena Roberts

A pprove    the Agreed Order        CRlBG    an agree

            MUNICIPAL SOLID             WASTE ENFORCEMENT DEFAULT ORDER

Item41      Docket     No 2009 0S12 MSW E                   Consideration        ofa   Defimlt Order assessing              administrative

            penalties   and reqWring     certain    actions    of Santos     Barcenas       elba    Tyre King Recycling            in Hale

                                                                                                                                 VODA_AR_00051133
            County       and    Swisher      County        TCEQ      ID    No        RN102954625          for    municipal           solid   waste

            violations    pursuant to      Tex Water Code ch           7 Tex         Health         Safety Code    ch 361           and the rules

            of the Texas        Commission on Environmental                    Quality       including   specifically         30 Tex      Admin
            Code ch 60          Gary   K   ShiLl   Lena Roberts

Approve the Default Order              CRlBG   a11agree

            MUNICIPAL WASTE DISCHARGE ENFORCEMENT                                               AGREED ORDERS

Item   42   Docket      No 2009 1034         MWD E           Consideration           of an Agreed Order assessing administrative
            penalties     and    requiring     certain     actions     of      the     City    of    Bridgeport          in    Wise     County
            RNI02740230          for water quality violations          pursuant to        Tex Water Code chs 7 and 26                     and the

            rules   of the     Texas    Commilsion on          EINiromnental Quality including                     specifically        30 Texas
            Adm rnstrative       Code ch     60      Tom   Jecha Cari MichelLa Caine

Approve the Agreed Order            CRlBG      all   agree

Item   43   Docket      No 2009 1132 MWD E                   Consideration           ofan Agreed Order           assessing         administrative

            penalties     and    requiring    certain      actions     of the         City    of    Brazoria      in   Brazoria         County
            RN101613552          for water quality violations          pursuant to        Tex      Water Code chs 7 and 26 and the

            rules   of the     Texas    Commission on EINromnental                      Quality      including    specll caDy          30 Texas
            Administrative      Code ch 60           Jorge Ibarra     PE       CariMichelLa           CaiIle

Approve the Agreed Order            CRlBG      all   agree

Item   44   Docket      No 2009 1648 MWD E                   Consideration           of an Agreed Order assessing administrative
            penalties    and requiring       certain   actions    of   Red      River        Authority    of Texas            in   Hall County
            RNI01702256          for water quality violations          pursuant to        Tex      Water Code chs 7 and 26 and the

            rules   of the     Texas    Commilsion         on EINromnental              Quality      including    specifically         30 Texas
            Administrative      Code ch 60           Samuel Short Cari MichelLa Caille

A pprove    the Agreed Order       CRlBG       all   agree

Item   45   Docket      No     2009 0968 l IIWD        E     Consideration           of an Agreed Order          assessing administrative

            penalties    and requiring certa in      actions   of City Public Service of San Antonio                      in   Bexar County
            RNI00217975          for water quality violations          pursuant to        Tex      Water Code chs 7 and 26 and the
            rules   of the     Texas    Commission on EINiromnental Quality including                             specifically         30 Texas
            Administrative Code         cn   60      Car1ie Konkol        CariMichelLa Caine

Approve the Agreed Order           CRlBG       all   agree

Item   46   Docket      No     2009 10S4     MWD E           Consideration           of an Agreed Order assessing administrative
            penalties     and    requiring     certain       actuns       of    Spring        Center      Inc       in    Harris        County
            RNI02076825          for water quality violations          pursuant to        Tex      Water Code chs 7 and 26 and                 the

            rules   of the     Texas    Commission on EINironmental Quality including                             specifically         30 Texas
            Adm inistrative Code ch 60               Harvey Wilson CariMichelLa Caille

Approve the Agreed Order           CRlBG       all   agree

                                                                                                                                        VODA_AR_00051134
Item 47     Docket     No    2005 1335           MWD E          Consideration        of an Agreed Order assessing administrative
            penalties    and requiring certain actions             of Western     Trails        Water Supply Corporation                 in   Bexar
            County TCEQ ID              No RNI02096526              for water quality vDlations            pursuant to      Tex Water Code
            cbs 7 and 26 and the                 rules   of the Texas     Commission on Enviromnental                    Quality        ilcludilg

            specifically    30   Tex Admin             Code ch 60      KariL      Gilbreth Lena Roberts

Approve the Agreed Order              CRlBG        an agree

Item   48   Docket   No      2009 0998           MWD E          Consideration        of an Agreed Order assessing administrative
            penalties    and requring         certain actions      of North    Texas       District Council Assemblies                  of   God   in

            Ellis   County RNI01513554                   for water qualty VDlations              pursuant to     Tex Water Code cbs                 7

            and 26 and the        rules     of the Texas Commission on Enviromnental                   Quality including           specifically

            30 Texas     Adn ri rl    Etrative   Code ch 60         Samuel Short Cari MichelLa Caille

Approve the Agreed Order              CRlBG        an agree

Item   49   Docket   No 2009 0671                MWD E          Consideration        ofan Agreed Order           assessing administrative

            penalties    and requiring        certain actions      ofLaxnnllen Lalbhai Patel Maganbhai Ranchlodbhai
            Patel Bhagubhai Bhulo Patel and Vinubhai                            Bhulo Patel          dba Holiday         Motel in Liberty

            County RNI01518843                   for water quality violations         pursuant to     Tex     Water Code cbs 7 and 26
            and the rules        of   the   Texas Commissim on Environmental                       Quality including            specifically       30
            Texas   Adn ri rl    Etrative   Code ch       60    Thomas    Jecha      Cari MichelLa Caille

Approve the Agreed Order              CRlBG        an agree

Item 50     Docket   No 2009 0995                MWD E          Consideration     ofan Agreed Order              assessing administrative

            penalties    against the City of Sinton in              San   Patricio     County RNI01916740                   for water quality

            violations    pursuant to       Tex    Water Code cbs 7 and 26 and the                 rules   of the Texas CommEsion on
            Environmental Quality ncludilg                     specn1CaDy     30 Texas          Administrative Code          ch 60            Car1ie

            Konkol Cari Mi helLa                 Caille

Approve the Agreed Order              CRlBG        an agree

            PETROLEUM STORAGE TANKS ENFORCEMENT AGREED ORDERS

Item 51     Docket     No     2009 1601 PST              E     Consideration    of an Agreed Order assessing administrative
                                      STELLA           LINK BUSINESS LLC                        Comer

            CariMichel
            penalties    against                                                       dba                 Drive in Grocery             inHa rris
            County RNI02036225                   for   petroleum storage tank violations            pursuant to     Tex     Health            Safety

            Code ch 382 Tex Water Code ch                      7   and the   rules   of   the   Texas Commissimon Erwiomnental

            Quality including          speen1Cany         30 Texas Administrative Code ch                  60     Bri    tn1a   Carlson

                     La   Caille

Approve the Agreed Order              CRlBG        an agree

Item 52     Docket     No    2009 1212 PST E                   Consideration    of an Agreed Order assessing administrative
            penalties    against      FASTRAC FOOD STORE'S                        INC       dba     Fastrac      280   in   Ha   rris    County
            RNI01782233           for petroleum          storage tank VDlations        pursuant to    Tex       Health       Safety Code           eh

                                                                                                                                         VODA_AR_00051135
            382 Tex Water Code ch              7   and the rules of the Texas Commission on Enviromnental                                      Quality

            including    specificaDy 30 Texas Administrative Code                         cn 60       Mike Pace          Cari Michel La Caine

Approve     the   Agreed Order       CRlBG      an agree

Item   53   Docket      No     2009 617 PST E               Consideration            of an Agreed Order                 assessing    administrative

            penalties    and requiring     certain        actions       of Petro capital           Management             LLC    dba    Hitchcock
            Chevron in Galveston           County RNI01762698                       for   petro1eum         storage     tank vio1ations     pursuant

            to    Tex   Hea1l h       Safety   Code       cn 382 Tex           Water Code            cn      7    and the    rules    of the Texas
            Corrnnission      on   Envirornnental     Quality includi1g              specifically     30 Texas Administrative Code ch
            60     Brianna Carlson       Cari MichelLa          CaiI1e

Approve the Agreed Order             CRlBG      an agree

Item 54     Docket      No     2009 1151 PST          E     Consideration            of an Agreed Order assessing administrative
            penalties    and requiring certain actions              of Hempstead            Independent           School District         in   Waner
            County RNI02027091             for petroleum            storage tank violations            pursuant to         Tex   Health         Safety

            Code en 382 Tex Water Code cbs 7 and 26                                  and     the    rules    of the Texas        Commission on
            Enviromnental Quality including                 specifically       30 Texas            Administrative Code              en 60         Judy
            Kluge CariMichel La Caine

Approve the Agreed Order             CRlBG      an agree

Item   55   Docket      No     2009 1238 PST          E     Consideration            of an Agreed Order assessing administrative
            penalties and requiring       certain actions       ofSHAWNA                  INC      in Eastland          County RNI02911591
            for petroleum storage tank          vnlations pursuant to            Tex Water Code cbs 7                     and 26 and the rules of

            the    Texas      Commission         on       Enviromnental             Quality         including           specifically    30      Texas

            Administrative Code        cn 60        Keith Frank          Cari MichelLa             Caille

Approve the Agreed Order             CRlBG an       agree

Item   56   Docket      No     2008 1254       PST E        Consideration            of an Agreed           Order assessing          administrative

            penalties    and requiring certain actions              of Salim Ariz Dossani dba Short Trip Food Mart                                  in

            Harris County          TCEQ   ID    No RNI00860626                 fur   petroleum        storage tank violations           pursuant to
            Tex Water Code cbs 7           and     26 Tex      Health          Safety       Code cn 382            and the rules       of the Texas

            Corrnnission      on Envirornnental        Quality incLding                   specifically      30 Tex        Admin      Code      cn 60
             Tammy L         Mitchell Lena Roberts

Approve the Agreed Order            CRlBG an        agree

Item 57     Docket      No     2009 1367 PST          E     Consideration           of an Agreed Order assessing administrative
            penalties   and requiring     certain     actnus    of Adan O'Campo dba                     Adam        Auto Service in Tarrant
            County RNI01573566             for     petroleum storage tank violations                   pursuant to        Tex    Health         Safety

            Code    cn 382 Tex Water Code cbs                       7    and   26    and     the   rules     of   the    Texas   Commission on
            Environmental Quality including                 specifically       30     Texas     Administrative Code              cn 60           Mike

            Pace    CariMichel La Caille

Approve the Agreed Order            CRlBG an        agree

                                                                                                                                            VODA_AR_00051136
Item 58     Docket      No     2009 1109          PST E         Consideration         of an Agreed Order assessing               administrative

            penalties   and requiring           certain actions      of City of Freeport         in   Brazoria    County RNI02027752
            for petroleum storage tank violations                  pursuant to     Tex    Health        Safety Code       cn 382 Tex Water
            Code cbs 7        and   26    and the    tu S      of the Texas     Commisidn on           Envirornnental       Quality including

            specifically     30 Texas Administrative Code cn 60                        Wallace Myers Cari MichelLa Caille

Approve the Agreed Order              CRBG all            agree

Item   59   Docket      No     2009 1272   PST E Consideration of an                        Agreed Order assessing               administrative

            penalties    against       OXFORD CONVENIENCE INC                                dba        Oxford        Convenience        Store    in

            Denton      County RNlO1553634                     for petroleum      storage   tank violations           pursuant to    Tex   Health

               Safety Code          ch 382        Tex Water Code cn               7    and the     rules   of   the    Texas   Commission on
            Envirornnental          Quality including           specifically      30 Texas    Administrative Code               cn   60      Judy

            Kluge CariMichel La CaiRe

Approve the Agreed Order              CR BG all           agree

Item   60   Docket      No     2009 0273 PST              E     Consideration         of an Agreed Order          assessing      administrative

            penalties against Star Fuels                  Inc dba Crosstimbers Citgo                  in Harris       County TCEQ ID             No
            RNI00606276             fOr petroleum storage tank vio1ations                pursuant to       Tex Water Code cbs 7            and   26
            Tex   Health        Safety         Code en 382 and              the rules of the Texas         Commision        on Envirornnental
            Quality including         specifically        30 Tex Admin Code ch 60                     LaurenciaFasoyiro Lena Roberts

Approve the Agreed Order              CRlBG an            agree

Item 6l     Docket      No     2009 1358 PST              E                           of an Agreed Order assessing administrative
                                      N
                                                                Consideration

            penalties    against           l   Airline     Center Inc           dba    1 Airline Food Store               in   Harris    County
            RNI01432367             for petroleum         storage tank villations        pursuant to       Tex HeaTh           Safety Code       ell

            382 Tex Wafer Code ch                  7     and the    rules    ofthe Texas    Commission on Erwironmental Quality
            inc1uding    specifically          30 Texas Administrative Code cn                     60       Judy Kluge         CariMichel        La
            Caille

Approve the Agreed Order              CR BG all           agree

            PETROLEUM STORAGE TANKS ENFORCEMENT                                               DEFAULT ORDER

Item   62   Docket      No     2009 0970 PST               E      Consideration       of a Default Order assessing               administrative

            penalties   and requiring certa in            actions    of James       Kaufman in Jefferson County TCEQ ID No
            RNI01835395             for   petro um storage          tank    violations pursuant to Tex Water Code cbs 7 and 26

            and the   rules   of the Texas Conrrni3sion on Envirornnental                    Quality including            specifically     30 Tex
            Admin     Code cn 60               Phillip    M    Goodwin       PG    Lena Roberts

Approve the Default Order             CRlBG         all   agree

            PUBLIC      WATER SYSTEM ENFORCEMENT AGREED ORDERS

                                                                                                                                         VODA_AR_00051137
Item 63     Docket      No       2009 0355           PWS E            Consideration         of an Agreed Order             assessing     administrative

            penalties      and requiring         certain        actions      of River Bend             Vater Services            Inc    in   Matagorda
            County TCEQ                ID    No RNI02681467                  fur   public      drinkilg     water violations        pursuant       to   Tex
            Health         Sarety Code         ch     341 and the rules of the Texas Connnission                        on EnvirornnentalQuality
             Barham        A Richard         Lena Roberts

Approve the Agreed Order                 CRlBG an            agree

Item   64   Docket     No        2009 OS36 PWS                 E      Consideration         of an Agreed Order             assessing    administrative

            pena1t s        and    requiring           certan        actions       of   the     City       of    Slaton    in    Lubbock          County
            RNI01202604            for      public    drinking        water violations         pursuant to       Tex HeaTh             Safety Code        ch
            341    and the    rules      of the Texas           Commission on Envirornnental                      Quality        Stephen     Thompson
            CariMichel La Caine

Approve the Agreed Order                 CRlBG an            agree

Item 65     Docket     No        2009 0S04 PWS                 E      Consideration         of an Agreed Order assessing administrative
            penalties      and requiring        certa in actions          ofMardoche            Abdelhak         dba Big Trees         Trailer City        in

            Bexar County RNI01652048                            for public     drinking water          violations       pursuant to     Tex      Health

            Safety    Code       ell   341      Tex       Water       Code     ell      5   and the    rules      of the    Texas      Commission         on
            Enviromnental Quality                    Stephen Thompson                CariMichel La Caine

Approve the Agreed Order                CRlBG          all   agree

Item   66   Docket     No        2009 0952           PWS E           Consideration          of an Agreed Order assessing administrative
            penalties      and requiring certan                actions    of Mirando          City   Water Supply Corporation in'Vebb
            County RN101195360                       fur public drinking           water violations         pursuant to         Tex Hea1t    h      Sa futy
            Code     cll   341    and the       rules        of the Texas          Commission on Envirornnental                   Quality          Andrea

            Linson Mgbeoduru CariMichel                         La Caille

Approve the Agreed Order                CRlBG          all   agree

Item 67     Docket     No 200S 14SS PWS E                            Consideration          ofan Agreed Order              assessing    administrative

            penalties      and    requiring          certain     actions     of High1and             Park       Water     Supply    Corporation           in

            Bosque County              TCEQ      ID     No      RNI01254407             for   public drinking        water violations        pursuant to

            Tex Health            Sa futy Code           cll    341    and the rules of the Texas                Commilsion on Envirornnental
            Quality        KariL       Gilbreth Lena Roberts

Approve the Agreed Order                CRlBG all            agree

Item   68   Docket     No        2009 0S17 P VS                E     Consideration          of an Agreed Order assessing                administrative

            penalties      and    requiring          certain       actions     of the         City    of   Palestine       in    Anderson        COWlty
            RNI01384576            for      public    drinking       water violations          pursuant to       Tex    Hea1t h        Safety Code        ch
            341   and the     rules      of the Texas Commissimon Envirolmlental Quality                                        Rebecca      Clausewitz

            CariMichel La Caine

Approve     the Agreed Order            CRlBG an             agree

                                                                                                                                                 VODA_AR_00051138
Item   69   Docket       No      2009 1242 P'VS         E          Consideration   of an Agreed Order assessing administrative

            penalties     and requiring      certain actions          of Brandon Irene       Water Supply        Corporation          in Hill
            County RN101437325                 for    public drinking        water violat ions   pursuant to    Tex Heahh             Safety

            Code   ch     341 and the       rules    of the Texas Conmrission on Erwiromnental                 Quality       Tel Croston

            Cari MichelLa          Caille

Approve the Agreed Order             CRBG an agree

Item   70   Docket       No 2009 0369 PWS E                    Consideration       of an Agreed Order assessing administrative
            penalties     and     requiring       certain     actions       of Barranca     Cotporation        in   EI   Paso        County

            LinsonMgbeoduru
            RN101268043            for public drinking water violations              pursuant to    Tex HeaTh            Safety Code      ch

            341    and    the    rules   of the     Texas      Commission on Enviromnental              Quality          Andrea
                                CariMichel La CaiTh

Approve the Agreed Order             CRlBG          an agree

Item   71   Docket       No 2009 1260 PWS E                    Consideration       of an Agreed Order assessing administrative
            penalties and        requiring   certain    actilns       of Fort Gates Water Supply Corporation                    in   Coryell

            County RN101216257                 for public drinking           water violations    pursuant to    Tex Heath             Safety

            Code    ch    341     and the    rules    of the Texas Connnission              on Erwronmental Quality                  Amanda
            Henry CariMichel La CaiTh

Approve the Agreed Order             CR BG          an agree

Item   72   Docket       No     2009 1268      PWS E           Consideration       of an Agreed Order assessing administrative
            penalties and requiring          certain actions         of Lake Palo Pinto Area Water Supply                Corporation in
            Palo Pinto County RN10 1456911                         for public drinking   water violations      pursuant to   Tex      Health

               Safety     Code     ch 341 and          the    rules    of the Texas      Commission on Environmental                 Quality

             AmandaHemy Cari MichelLa                       Caille

Approve the Agreed Order             CRBG an agree

Item   73   Docket    No        2009 1589 PWS           E      Consideration       of an Agreed Order assessing administrative
            penalties     and requiring certain              actions    of Texas    Conference      Association      of Seventh Day
            Adventists in Harris           County RN104387543                  fur public   drinking   water    violations   pursuant to

            Tex    Health         Safety    Code      ch 341 and the            s ofthe     Texas   Commission      on Environmental
            Quality       Amanda Henry CariMichel La                     Caille

Approve the Agreed Order             CRlBG          an agree

Item   74   Docket    No        2009 1125 P'VS          E      Considerat ion of an Agreed          Order assessing administrative
            penalties    and requiring certain         actions       ofHa Van Nguyen dba Austin Aqua System in Burnet
            County RN101197986                 fur   public drinking         water violat ions pursuant to      Tex Heahh             Safety

            Code    ch    341     and the    rules    of     the    Texas   Commission on Enviromnental             Quality           Andrea
            Linson Mgbeoduru CariMichel La Caille

Approve the Agreed Order             CRlBG          an agree

                                                                                                                                     VODA_AR_00051139
Item   75   Docket       No          2009 1065     P VS E             Consideration      of an Agreed Order assessing administrative
            penalties       and requiring         certain actions           of Texas Parks      and    Wilcllife   Department         in   Hamilton

            County RN101255545                     for    public      drinking     water violations        pursuant to   Tex Heahh              Safety

            Code       ch      341     and the    rules       of the Texas         COnmllssim on Environmental                Quality           Yuliya

            Dunaway            CariMichelLa CaiRe

Approve the Agreed Order                  CRBG an agree

            PUBLIC          WATER SYSTEM ENFORCEMENT DEFAULT ORDER

Item   76   Docket       No          2009 0917        PWS E           Consideration       of a Default       Order assessing       administrative

            penalties         and requiring       certain       actions       of Moore's    Water System of Beaver                 Lake        Inc    in

            McLennan County TCEQ ID                            No RNI02682291             for   public drinking     water violations          pursuant

            to   Tex     Health          Safety   Code ch        341 and the ru1es of the Texas Commission on Enviromnental

            Quality           Stephanie       J Frazee Lena Roberts

Approve the Default Order                 CRlBG         all   agree

            SLUDGE ENFORCEMENT AGREED ORDER

Item   77   Docket       No 2009 0938 SLG E                        Consideratim of an Agreed Order assessing                       administrative

            penalties         and    requiring     certain      actions       of Leonard     D    Olivares        dba   Olivares      Pumping
            Septic     Tank Cleaning               in   Bee County RNI03147559                     for     m1U1 ipal     solid   waste     violations

            pursuant        to   Tex     Health         Safety Code            ch 361 Tex Water Code ch                 7   and the   rules      of the
            Texas Commission on Environmental Quality including                                    specifically     30 Texas Administrative
            Code ch 60               Jeremy Escobar            CariMichelLa Caine

Approve the Agreed Order                  CR BG         an agree

            WATER QUALITY ENFORCEMENT AGREED ORDERS

Item 78     Docket       No          2009 1241        WO E         Consideratim of an Agreed Order assessing                       administrative

            penalties       and requiring        certa in actions           of Draper Construction             Land Development LLC                  in

            Harrison County RNI05324099                               fur   water quality violations       pursuant to   Tex Water Code cbs
            7    and     26      and    the   rules     of the     Texas        Commission on Environmental                  Quality          includ ing

            specifically         30 Texas Administrative Code ch                    60    Thomas Jecha CariMichelLa Caine

Approve     the Agreed Order              CR BG an agree

Item 79     Docket       No          2009 0056        WO E         Consideratim of an Agreed Order assessing                       administrative

            penalties         aga inst    Kimbn           Hill     Homes         Au tin     LP        in   Hays    County        TCEQ         ID   No
            RNI05519490                for water quality violations              pursuant to     Tex Water Code chs 7 and                26    and the

            rules   of   the     Texas Commission on Enviromnental                       Quality including        SpeciflCany 30      Tex Admm
            Code ch         60       Jenn ifer Cook Lena Roberts

Approve the Agreed Order                 CRBG an              agree

                                                                                                                                            VODA_AR_00051140
Item   80   Docket     No         2007    1634 VQ E                  Consideratim of an Agreed Order                                assessillg      administrative

            penalties       and     requiring         certain          actions         of       Micah         Mosonyi           dba     Shenandoah               Corp
            International         in Tarrant          County TCEQ ID                       No RN104990445                     for   water     quality     violations

            pursuant    to     Tex       Water       Code        chs      7 and        26 and          the    rules     of the       Texas     Connnissim on
            Erwiromnental Quality inc1udIDg                           spec     IT aDy       30     Tex Admin Code                     ch     60       Barham         A
            Richard     Lena Roberts

Approve the Agreed Order                CRlBG         an agree

Item 81     Docket     No      2009 1165 WQ                    E     Consideratim of an Agreed Order                                assessillg      administrative

            penalties   and requring certain                   actions    of Adrian Gomez                     in   Palo Pinto County RNI05670137
            for water quality violations pursuant to                          Tex    Water Code cbs 7 and 26 and the                         rules   of the Texas
            Commission on Erwiromnental Quality nclud ing                                        specifically        30 Texas Administrative Code ch
            60     Harvey Wilson CariMichel La CaiRe

Approve     the   Agreed Order          CR BG an agree

            STATE IMPLEMENTATION PLANS AND RULE MATTERS

Item 82     Docket      No         2008 0335 SIP                     Consideration               of    the     adoption        of    revisions       to    the   state

            inplementation p1an to imp1ement revEDns                                  of the federal Clean Air Interstate Rule                               CAIR
            and Senate Bill             SB   1672 of the 80th Texas Legislature Regular Session 2007                                                The    revisions

            incorporate federal changes                  to   the   CAIR        program methodology for                       allocation     ofCAIR         nitrogen

            oxides    NOX         allowances as specified                     by SB 1672       non substantive
                                                                                                   and                               administrative         changes
             Melissa Kuskie             Teny Sa1em              Project       No    2007 051 SIP NR

Adopt the proposed amendments                  to   30    TAC       Sections        101.502 101.504 and 101.506 and                          the    corresponding

mod IT1Cation     of the SIP      BG CR        all   agree

Item 83     Docket     No         2008 0334 RUL                     Consideration           of the        adoption          of amendments            to   30 Texas
            Administrative              Code        rAC            Chapter          101         General        Air     Quality       Rules         Subchapter        H
            Emissions       Bankillg         and    Tradillg         Division          7    Clean Air              Interstate    Rule        Sections       101.502
            101.504     and       101.506           and       corresponding           revisions          to    the    state     implementation            plan      The
            adoption    will      implement revisions                    to    Texas       Health       and        Safety     Code     Section       382.0173        as

            required by Senate Bill 1672 from the 80th Legislature                                      2007 Reguhr Session which                         revises   the

            nonsubstantive
            methodology           for   allocation            of C1ean         Air   Interstate          Rule        nitrogen       oxiles    allowances            The

            adoption will      also      incorporate           federal        changes      to    the   Cean Air         Interstate      Rule       and make

                             administrative           changes            The proposed             rules       were published          in the       September        25
            2009    issue    ofthe Texas Register                   34 TexReg          6599            Brandon Greulich               Amy     Browning           Rule

            Project   No     2007 053 101 EN

Adopt the proposed amendments                  to   30    TAC       Sections       101.502 101.504                  and 101.506       and the corresponding

mod ITlCationofthe SIP            BG CR all          agree

Item   84   Docket     No      2009 0845            RUL          Consideration             for   adoption          of the repeal of30              TAC     Chapter
            101 General        Air Quality Rules                    Subchapter          H       Emissions          Bankillg      and Trading          Division       8
            Clean Air Mercury            Rule Sections               101.601         and 101.602              the amendments           to    30    TAC     Chapter

            122    Federal Operating            Permits Subchapter                     A    Definitions              Sections       122.10     and 122.12           and

                                                                                                                                                            VODA_AR_00051141
           Subchapter           B     Pennit    Requirements                 Section     122.120          and the          repeal of Chapter                  122     Federal

           Operating           Pennits        Subchapter          E     Acid        Rain Permits            Clean          Ai      Interstate         Rule         C'Can Air
           Mercury            Rule       Sections          122.440            122.442          122.444           122.446             and        122.448              and      the

           corresponding              repeal    of the          Texas       State    Plan for the           Control of Designated                            Facilities       and

           Pollutants          Plan fur Control of Mercury                      Emissions from              Coal Fied               Electric      Steam Generating
           Units        Clean Air Mercury Rule                        The     adoption        will   repeal the             state    Clean Air Mercury                      Rule

           requirements           that   incorporated            by rererence the              federal      C'Can          Ai     Mercury          Rule        The federal
           C1eanAir Mercury Rule                     cited      in   Texas    Health and Sarety              Code           Section 382.0173                  promlligated

           by House           Bill    2481     79th Legislature                2005 was          vacated         by        the    cotn1s       and      is   no     longer     an
           enforceab'C           federal   requirement Also a Ctter from the Commission will notifY the United                                                             States

           Etwiromnental Protection                    Agency           EPA of          the    wthdrawal              from consideration                     of the Texas
           State    Plan for the Control of Designated                          Facilities       and Pollutants                  Plan    for   Control of Mercury
           Emissions           from Coal Fired             Electric         Steam Generating Units                     C'Can        Ai     Merctny            Rule which

           was previous1y              adopted       by    the    Commission on July 12 2006 Because                                        the    rule       is    no longer
           enforceable          and is being repealed                  the Texas        State    Plan for merctny must                         also     be repealed and
           withdrawn           from consideration                of approval by the              EPA The               proposed           repealed           and amended

           sections      were published              in the       September          25 2009             issue    of the Te xas Register                          34 TexReg
           6607          Brandon Greulich              Amy Browning                    Rule Project         No 2007 054 101 EN

Adopt   the     proposed        repeal     of Sections               101.601        101.602          122.440           122.442            122.444             122.446         and

122.448    Adopt        the    proposed        amendments               to    Sections        122.10        122.12           and     122.120            and        Adopt      the

proposed repeal of the Texas State Plan for the Control ofDes ignated                                                 Facilities         and Pollutants              Phn      fur

ControlofMerctny          Emissions from               Coal Fired           Electric    Steam Generating Units Clean                              Ai MerctnyRule
BG CR     all   agree

Item 85    Docket        No           2009 0744 SIP                   Consideration           fur    the     adoption             of a revision               to     the    state

           mplementation plan                  SIP     concerning            repeal    of the Texas          portable fuel container                               PFC rule
           This    adoption of the Texas                  PFC        Rule    Repeal SIP Revision                 will remove              Texas         PFC        regulations

           from the control strategy                 fur   the State of Texas Air Quality Implementation                                       Plan for the Control

           of Ozone Air Pollution for                     all   affected      1997 eight hour ozone standard nonatta innent and near
           nonattaimnent              areas    in Texas          This       adoption     to    the    SIP    revision will               incorporate              ru1emaking

           repealing          state   PFC      rules    and       demonstrate that             federal       PFC           standards       pronrulgated               in 2007

           provide      replacement emission reductions                          Because those emission reductions                                are    estimated to be

           equal to or greater than those derived from the state regulations the repeal of the Texas                                                                 PFC     rule

           will not negatively             impact the State of Texas                   Air Quality Implementation                          Plan fur the Control of

           Ozone Air Pollution                  Lisa Shuvalov                ChrissieAngeletti              Project          No 2009 024 SIP NR

Adopt the repeal of30 Texas                   Admin Code               Sections        115.620            115.622           115.626         115.627           and 115.629
concerning      portable fuel containers               and the corresponding                   revisions         to   the State Implementation                        Pl'll    as

recommended by          the    Executive       Director          CRlBG         allagree

Item 86    Docket       No 2008 1401 RUL                         Consideration          ofthe adoption of30                       TAC      Chapter 116 Control
           of Air Pollution by Permits fur                        New        Construction        or Modificatim                    Subchapter            A     Definitions

           new     Section        116.20       Portable          Facilities     Defi trtions          and    Subchapter               B     New         Source        Review
           Permits new Division                  8   Portable Facilities               new     Section 116.178                    Relocations           and       Changes of

           Location       of Portable          Facilities         and corresponding                 revisions         to    the    state    inplementation plan

           The      adoption          of new         sections          in     Subchapters            A     and        B     and      the       corresponding                state

              implementation           plan    revision          would       provide      guiiance          regarding              the    proper         procedures           for

                                                                                                                                                                     VODA_AR_00051142
           movement of portable               facilities             The new         rules    would     a   rect   the public notice requirements for

           the rebcation or change                 oflocation ofa portable mcility                           The new       rules      would    also   incorporate

           existing      guidance       issued by the                Air Permits        DNision        into    the    TCEQ's rules             Some of EPA's
           comments            resulted in changes to requirements and rule references                                   within the rule            The proposed
           rules    were published            in   the September             11,2009          issue   of the Texas Register                 34 TexReg         6281
             Becky Southard Booker Harrison                             Rule Project          No 2008 031 116 PR

Adopt 30     TAC     Sections       116.20         and    116.178        and     corresponding              revi ions      to   the    State   Implementation

PJan   BG CR       all   agree

Item 87    Docket        No       2009 0542         RUL              Consideration            for the   adoption          to    repeal Sections        115.620

           115.622 115.626              115.627 and 115.629                    of30        TAC     Chapter 115 ControlofAirPollutimfrom
           Volatile Organic            Compounds               and corresponding revisions                    to   the state implementation            pian The

           proposed        adoption      will      address       adopted        federal standards             for Portable Fuel Containers                    PFC
           Specifically the United                 States      Enviromnental            Protection      Agency           adopted      a federalPFC rule          72

           Federal Register            8432     February             26 2007         that    set   a national standard for gasoline                   d esel    and

           kerosene       PFCs      An    PFCs manufactLD ed on or                      after      January    1 2009           are required to comply with

           the federal standards            The federal standards promulgated are more                                   strilgent     than the ctnTent state

           PFC     regulations TherefOre                  it    is    necessary       to     repeal the      state    PFC       regulations The         proposed

           repealed       sections      were published                in the    September           11 2009          issue      of the Te xas Register           34
           TexReg        6279          Lisa Slruvalov           Chrissie Angeletti                  Rule Project         No     2008 032 115 EN

Adopt the repeal 30 Texas                Admin Code                  Sections        115.620          115.622         115.626         115.627       and 115.629

concerning   portable fuel contailers and the corresponding                                    revisions      to   the    State   Implementation          Plan    as

recommended by the Executive Director                           CRJBG          all   agree

           EXECUTIVE               MEETING

Item 88    Docket        No 2010 0001 EXE                      The Commission will conduct                         a closed meetilg to deliberate                the

           appointment            empbyment               evaluation           reassignment             dut es        discipline       or   dismissal of the

           Cormnission's          Executive         Director          and General Couns el              as    pemritted         by Section 551.074            of the

           Texas     Open Meetings Act                   Chapter 551            of the       Goverrnnent           Code        The Commission may               also

           meet     in   open meetilg to take actim on                       this     matter as required by Section 551.102 of the Texas

           Open     Meetings       Act    Chapter 551 of the Govermnent                             Code

No actim taken

Item 89    Docket        No 2010 0002 EXE                       The Commission will conduct                          a closed meeting          to   receive    legal

           advice        and    will    discuss         pending         or   contemplated             litigation         sett1ement       offers      andlor     the

           appointment            employment evaluation                      reassigrnnent            duties       discipline     or dismissal of specific

           Commission employees                    as    pennitted       by    Sections        551.071       and 551.074 the Open Meetings Act

           codified       as    Chapter 551         of the Govermnent                      Code      TIle   CommEsion may alo meet                       in open

           meeting to take action             on    legal      or personnel matters considered                       in the closed meeting as required

           by Section 551.102 of the Texas Open Meetings Act Chapter 551 ofthe Goverrnnent Code

No   actim taken

                                                                                                                                                        VODA_AR_00051143
Item   90   Docket     No 2010 0003 EXE                The Commission will conduct        a closed meeting to discuss the ir

            duties    ro1es   and   responsibilities    as    Cormnissioners of the   TCEQ   pursuant   to   Section 551.074   of
            the    Open Meetings Act Codif ted               as   Chapter 551   of the Government Code        The Commission
            may     also meet in open meeting to take               action on this matter as required by Section 551.102       of
            the Texas OpenMeetings           Act   Chapter 551 ofthe Government           Code

No   actDn taken

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            lsi   John Sedberry                                                 2 17 10
            Assistant General Counsel                                        Date

            Jolm Sedberry

                                                                                                                       VODA_AR_00051144
                      APP. K

Texas Commission on Environmental. Quality v. City of
        Waco, 413 S.W.3d 409 (Tex. 2013)
                                                                                           Page 1

413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

                           Supreme Court of Texas.
           TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, Petitioner,
                                    v.
                         CITY OF WACO, Respondent.

                                          No. 11–0729.
                                     Argued Feb. 28, 2013.
                                     Decided Aug. 23, 2013.
                                 Rehearing Denied Nov. 22, 2013.

Background: Dairy that was upriver from city applied for a major amendment to its concentrated
animal feed operation (CAFO) permit to expand operations. City sought a contested case hearing.
The Commission on Environmental Quality (CEQ) denied city's request. City petitioned for ju-
dicial review. The 201st Judicial District Court, Travis County, Darlene Byrne, J., affirmed. City
appealed. On rehearing, the Court of Appeals, Bob Pemberton, J., 346 S.W.3d 781, reversed and
remanded. CEQ sought review which was granted.

Holding: The Supreme Court, Devine, J., held that CEQ did not abuse its discretion in denying
city's request for a contested case hearing.

   Reversed; rehearing denied.

                                          West Headnotes

[1] Environmental Law 149E          381

149E Environmental Law
   149EVIII Waste Disposal and Management
      149Ek377 Administrative and Local Agencies and Proceedings
        149Ek381 k. Hearing and determination. Most Cited Cases

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                                                                                               Page 2

413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

    Likely effects of proposed amended concentrated animal feeding operations (CAFO) permit
for dairy that purported to provide greater protection for water quality was a relevant consideration
when evaluating the need for a public, contested case hearing under provision of administrative
code that limited the right to contested case hearing where applicant was not applying to increase
significantly the quantity of waste discharged or materially change the pattern or place of dis-
charge, among other considerations. 30 TAC § 55.201(i)(1).

[2] Administrative Law and Procedure 15A                470

15A Administrative Law and Procedure
   15AIV Powers and Proceedings of Administrative Agencies, Officers and Agents
      15AIV(D) Hearings and Adjudications
        15Ak469 Hearing
           15Ak470 k. Necessity and purpose in general. Most Cited Cases

    Although the Administrative Procedure Act (APA) defines “contested case” and sets the
procedural framework, the agency's enabling act determines whether rights are to be determined
after an opportunity for adjudicative hearing, and agency rules may decide whether that oppor-
tunity may include a contested case hearing. V.T.C.A., Government Code § 2001.003.

[3] Environmental Law 149E                381

149E Environmental Law
   149EVIII Waste Disposal and Management
      149Ek377 Administrative and Local Agencies and Proceedings
        149Ek381 k. Hearing and determination. Most Cited Cases

    Commission on Environmental Quality (CEQ) did not abuse its discretion, under provision of
administrative code that limited the right to contested case hearing to when applicant was applying
to increase significantly the quantity of waste discharged or materially change the pattern or place
of discharge, among other considerations, in denying city's request for a contested case hearing on
application by dairy for an amended concentrated animal feed operation (CAFO) permit, where
there was evidence in the record to support the CEQ's determination that the proposed permit did
not seek to significantly increase or materially change the authorized discharge of waste or oth-
erwise foreclose CEQ discretion to consider the amended application at a regular meeting. 30 TAC
§ 55.201(i)(1).

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

*410 Ron Beal, Professor & Attorney at Law, Waco, TX, for Amicus Curiae Ron Beal

P.M. Schenkkan, Graves Dougherty Hearon & Moody PC, Austin, TX, for Amicus Curiae Coastal
Conservation Association.

Julia Brooks Jurgensen, Beard Kultgen Brophy Bostwick, Waco, TX, for Amicus Curiae Greater
Waco Chamber.

Rosemarie Kanusky, Beard Kultgen Brophy Bostwick Dickson & Squires LLP, Waco, TX, for
Amicus Curiae Mont Belvieu Caverns, LLC.

Hugh Rice Kelly, Texans for Lawsuit Reformfor, Austin, TX, Amicus CuriaeTexans for Lawsuit
Reform.

Carlos Romo, Evan Andrew Young, Thomas R. Phillips, Baker Botts LLP, Austin, TX, for
Amicus Curiae Texas Association of Business.

Emily Willms Rogers, Bickerstaff Heath Smiley Pollan Kever & McDaniel, Austin, TX, for
Amicus Curiae Texas Farm Bureau.

Anthony C. Grigsby, Mark Lewis Walters, Nancy Olinger, Office of the Attorney General, En-
vironmental Protection & Adm. Law Div., Barbara Bryant Deane, Assistant Attorney General,
Daniel T. Hodge, First Asst. Attorney General, David C. Mattax, Director of Defense Litigation
Office of the Attorney General, David Preister, John Barrett Scott, William J. “Bill” Cobb III,
Office of the Attorney General, Elaine M. Lucas, TCEQ—Office of General Counsel, Greg W.
Abbott, Attorney General of Texas, Jonathan Karl Niermann, Chief of Environmental Protection
Div. Office of the Texas Attorney General, Robert Davis Brush, TCEQ—Envtl. Law Div., Austin,
TX, for Petitioner Texas Commission on Environmental Quality.

Enid Allyn Patterson Wade, Scott & White Healthcare, Temple, TX, Greg White, Attorney at
Law, Kerry L. Haliburton, Naman Howll Smith & Lee PLLC, Wesley David Lloyd, Naman
Howell Smith & Lee PLLC, Waco, TX, for Respondent City of Waco.

Justice DEVINE delivered the opinion of the Court.
    Dairies that feed large numbers of cattle for extended periods in confined areas are termed

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

“concentrated animal feeding operations” (CAFOs). Because these operations often impact their
environment, they generally must obtain water-quality permits from the Texas Commission on
Environmental Quality (the “TCEQ” or “Commission”). These permits are designed to control the
waste produced at such facilities and through regulation prevent it from polluting nearby water
sources.

    When a CAFO applies for a permit, interested parties may object to the proposed permit during
a comment period. These parties may also seek to intervene and request a public hearing on the
proposed permit. But before granting a contested case hearing—a trial-like proceeding with at-
tendant expense and delay—a threshold determination must be made as to whether the party is an
“affected person” with standing to request such a hearing.

    *411 In this appeal, the TCEQ granted an amendment to a dairy CAFO's water-quality permit
over objections from a downstream city, which claimed that the dairy's operations under the
amended permit would adversely affect the quality of the municipal water supply. The city sought
to intervene in the permit process and obtain a contested case hearing. After a period for public
comment and meeting, the Commission granted the amended permit without a contested case
hearing, and the city sought judicial review, complaining that it was entitled to a contested case
hearing because it was an “affected person.” By rule, an affected person may request a contested
case hearing, “when authorized by law.” 30 Tex. Admin. Code § 55.201(b)(4).

    The court of appeals agreed that the city was an affected person and held that the Commission
abused its discretion in denying the city's request for a contested case hearing. 346 S.W.3d 781,
827 (Tex.App.-Austin 2011). The court accordingly reversed the district court's judgment, which
had affirmed the Commission's decision, and remanded the matter to the TCEQ. Because we do
not agree that the Commission abused its discretion in denying the hearing request, we reverse and
render judgment for the Commission.

                                                 I
    Waste water discharges are generally regulated and permitted through the federal Clean Water
Act and the delegation of the federal National Pollutant Discharge Elimination System
(“NPDES”) Program to the State of Texas.FN1 The Clean Water Act requires states to prepare
reports every two years on the quality of water in the state and to make recommendations for re-
ducing pollution. 33 U.S.C. § 1315. The federal act further requires states to update water-quality
standards every three years. The standards are then used to set effluent limitations in water-quality
permits. Id. § 1313(c)(1).

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

        FN1. At one time, water quality protection was left largely to the states, but with the en-
        actment of the Federal Pollution Control Act Amendments of 1972, commonly known as
        the Clean Water Act, the federal government took on this responsibility. See 33 U.S.C. §§
        1251–1387. The Clean Water Act created a federal permitting system (the NPDES) that
        requires a permit of any person discharging pollutants into a surface water body.

    In Texas, the TCEQ has the primary authority to establish surface water quality standards,
which it implements, in part, in its permitting actions. See 33 U.S.C. § 1313(a), (d); TEX. WATER
CODE § 26.023; see also id. § 5.013(a)(3) (granting the TCEQ general jurisdiction over “the
state's water quality program including issuance of permits, enforcement of water quality rules,
standards, orders, and permits, and water quality planning”). The agency continually monitors and
evaluates the state's water quality as part of its primary responsibility to preserve and conserve the
state's natural resources. TEX. WATER CODE § 5.012. Over the past fifteen years, the TCEQ has
devoted particular attention to the water quality of the North Bosque River.

   The North Bosque River extends from its headwaters in Erath County, through Hamilton and
Bosque Counties, and into McLennan County where it joins two other branches of the Bosque to
form Lake Waco. Lake Waco serves as the municipal water supply for the City of Waco. The City
owns all adjudicated and permitted rights to the water impounded in the lake, which is the sole
source of drinking water for approximately 160,000 people.

   In recent decades, the dairy industry in the North Bosque watershed has experienced signifi-
cant growth. This, in turn, *412 has raised concerns over the increasing volumes of animal waste
produced by these dairies and the possibilities for such waste to damage the water quality of the
North Bosque and, ultimately, Lake Waco.

    The drinking water in Waco has historically had taste and odor problems. For many years, the
City has attributed these problems to algae blooms in Lake Waco, which the City believes to be
exacerbated by the proliferation of animal waste in the North Bosque watershed. As a result, the
City and others have sought to impose stricter regulatory limits on dairies in the North Bosque
watershed.

   The Clean Water Act requires Texas and the other states to identify water bodies that do not
meet, or are not expected to meet, water-quality standards. 33 U.S.C. § 1313(d)(1). In 1998, the
Commission determined that two segments FN2 (Segments 1255 and 1226) of the North Bosque

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

River above Lake Waco were “impaired” under “narrative” water-quality standards “related to
nutrients and aquatic plant growth.” FN3 Segment 1255 extends from the North Bosque's head-
waters to a point just downstream from Stephenville, and Segment 1226 extends from that point to
where the river flows into Lake Waco. Lake Waco itself, however, was not determined to be an
“impaired” water body.

        FN2. For purposes of water quality management, the TCEQ segments the state's major
        surface waters.

        FN3. The court of appeals defined a “narrative” water-quality standard as “qualitative,
        somewhat subjective assessments of ‘too much,’ in contrast to quantitative or numeric
        measures.” 346 S.W.3d at 793.

    Once a water body is identified as impaired, the state must determine a “total maximum daily
load” or TMDL for the water body. The TMDL serves to budget the maximum amount of a pol-
lutant that a water body can receive and still meet the applicable water-quality standard. See id. §
1313(d)(1)(C). Following study and public comment from the City and others, the Commission
determined that soluble phosphorus, which it attributed primarily to dairies' waste application
fields and municipal water-treatment plants, was the key variable that could be controlled to limit
algal plant growth in the North Bosque River. The Commission accordingly approved TMDLs that
proposed a fifty-percent reduction in soluble phosphorus loading over time. After further study
and comment (including comments from the City), the Commission in 2002 proposed an imple-
mentation plan through which dairies and cities could reduce phosphorus loadings. In 2004, the
Commission amended its rules, making parts of the plan legally enforceable. See 30 Tex. Admin.
Code §§ 321.31–321.47.

    Meanwhile, in 2001, the Legislature, at the City's urging, imposed new environmental re-
strictions on dairy CAFOs located in a “major sole source impairment zone” (MSSIZ). See gen-
erally TEX. WATER CODE §§ 26.501–.504. At the time of enactment, the North Bosque wa-
tershed was the only area to which the MSSIZ legislation applied. See id. § 26.502 (defining major
sole source impairment zone). The legislation required that new or expanded CAFOs located
within a MSSIZ obtain an individual water-quality permit—a permit tailored to the dairy's par-
ticular circumstances. See id. § 26.503(a). Before this legislation, CAFOs in the North Bosque
watershed could operate under general permits, a permit type exempted from the contest-
ed-case-hearing process. See 30 Tex. Admin. Code § 55.201(i)(7). The MSSIZ legislation thus
effectively removed that exemption for CAFOs covered by the statute, opening their permit pro-

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

ceedings*413 to the potential for contested-case hearings.

    The Commission thereafter amended its rules to incorporate the legislative changes for CAFOs
in the North Bosque River impairment zone. See 30 TEX. ADMIN. CODE §§ 321.32–.35, .39,
.48, .49. The amended rules required dairy CAFOs in the watershed to obtain individual permits
when their current permits expired. Id. The amended rules also imposed stricter requirements on
the management and disposal of wastewater and manure by the CAFOs.

    About this same time, the Environmental Protection Agency adopted new rules and guidelines
governing CAFOs. 40 C.F.R. §§ 122, 123, 412. The federal changes expanded the federal defini-
tion of CAFOs and imposed stricter nutrient-management and record-keeping requirements on the
facilities. See id. In response, the Commission again rewrote its rules in 2004 to mirror the federal
changes, imposing more stringent controls on CAFOs, especially those in the North Bosque wa-
tershed. See 30 Tex. Admin. Code §§ 321.31–.47. The rules provided, however, that CAFOs
needing individual permits could continue to operate under their old authorizations so long as the
operator applied for an individual permit by July 27, 2004. 30 Tex. Admin. Code § 321.33(g). In
March 2004, the operators of the O–Kee Dairy applied to amend their water-quality permit.

    The O–Kee Dairy is in Hamilton County about 80 miles upstream from Lake Waco. It is sit-
uated a few miles from the North Bosque River but within its watershed. Under the new regula-
tions, O–Kee needed to convert from a general to an individual permit. In its application, the dairy
also sought to expand its herd from 690 to 999 cows and its total waste-application acreage from
261 to 285.4 acres.

     The Commission's executive director declared the O–Kee Dairy permit application adminis-
tratively complete, conducted technical review, prepared a draft permit, and issued a preliminary
decision that the draft permit met all statutory and regulatory requirements. The draft permit
proposed to increase the dairy's maximum herd size and total waste application acreage as re-
quested. The draft also proposed several new measures to strengthen the overall water-quality
protections at the facility, even with the increase in the number of cows. These measures included
reducing the possibility of discharges from the dairy's retention control structures (RCSs) FN4 by,
among other things, more than doubling their total storage capacity and improving monitoring of
sludge and water levels. There were also new restrictions aimed at reducing the risk of waste
runoff from the waste application fields. The dairy was further required to expand the size of
non-vegetative buffer zones around the waste application fields and to transport excess waste
off-site. The new measures purported to conform to the numerous regulatory changes imposed on

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

Texas dairy CAFOs since the issuance of the dairy's previous water-quality permit.

        FN4. Retention control structures are ponds used to collect runoff of manure and
        wastewater from areas where cows are confined.

    The executive director's preliminary decision that the draft permit met all statutory and regu-
latory requirements triggered a period of public notice and comment. See TEX. WATER CODE §
5.553(b), (c). The City submitted public comments and requested a public meeting, which was
granted. See id. § 5.554. At the conclusion of the public comment period, the executive *414 di-
rector responded to the City's public comments, agreeing to make some changes to permit provi-
sions governing waste application in the dairy's waste application fields or off-site, but otherwise
rejecting the City's complaints. See id. § 5.555.

    The City next filed a written request for a contested case hearing that incorporated its prior
comments, replied to the executive director's responses, and identified the legal and factual issues
it considered to be in dispute. See id. § 5.556; 30 Tex. Admin. Code § 55.201 (Texas Comm'n on
Envtl. Quality, Requests for Reconsideration or Contested Case Hearing). In its request, the City
asserted it was an “affected person” with a personal justiciable interest in the O–Kee permit ap-
plication process. The City attached two affidavits to its hearing request—one from a professional
engineer, Bruce L. Wiland, whom the City presented as an expert in water-quality analysis, the
other from the City's water-utility director, Richard L. Garrett, also an engineer. The City's claim
to affected-party status rested on the assertions and opinions of these two experts, which the court
of appeals summarized as follows:

  • The City possesses a personal justiciable interest in the quality of the water in Lake Waco
  because it owns all adjudicated and permitted rights to the water impounded in the lake and uses
  the water as its sole source of supply for its municipal water utility, exclusive of emergency
  connections. The City must treat the water to ensure that it is safe for uses that include drinking
  and bathing and that it will be regarded as palatable by the customers to whom the City sells the
  water, including 113,000 City residents, approximately 45,000 residents of surrounding mu-
  nicipalities, and major industrial customers “that place a premium on the quality of the water
  they use.” Otherwise, the City is placed at a competitive disadvantage in preserving and growing
  its water-utility customer base and, ultimately, its broader economic health.

  • For many years, the City has received complaints about offensive taste and odor in its drinking
  water. The source of these problems has proven to be a geosmin (earthy odor) produced by de-

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

  caying algae that grows in Lake Waco during warm weather. Beginning in the 1980s, Lake
  Waco began to experience more frequent and longer durations of algal blooms, with corre-
  spondingly more taste and odor problems in the City's drinking water. To counter these prob-
  lems, the City has incurred escalating costs in attempting to treat the water. Despite these addi-
  tional expenditures, current treatment methods (chiefly, the use of powdered activated carbon)
  have repeatedly fallen short of eliminating the geosmin, necessitating that the City deliver of-
  fensive smelling and tasting water to customers for the time being and that it plan and budget to
  install different and more expensive water-treatment systems in the future.

  • There is a causal linkage between the increasing algal growths in Lake Waco (and resultant
  taste and odor problems in the City's drinking water) and phosphorus loading from dairies up-
  stream in the North Bosque watershed. The North Bosque contributes approximately 64 percent
  of the total flow into Lake Waco and over 72 percent of the total phosphorus loading to the lake.
  Between 30 to 40 percent of the lake's total phosphorus load is attributable to dairy operations in
  the North Bosque watershed, most of which stems from runoff and discharges that occur during
  heavy rainstorms. This phosphorus loading attributable to dairies in the North Bosque*415
  watershed, in turn, is the primary cause of the lake's heavy algal growth.

  • In addition to contributing nutrients that lead to algal growth and, ultimately, to taste and odor
  problems in drinking water, CAFOs in the North Bosque watershed are also a source of bacteria
  and other pathogens entering Lake Waco. In addition to driving up water treatment costs, the
  presence of these pathogens in the lake endanger the health and enjoyment of the City's many
  citizens who swim, fish, sail, ski, and engage in other water recreation there.

  • If the problems with the proposed O–Kee Dairy permit identified in the City's comments are
  not remedied to any greater extent than described in the executive director's response, the in-
  creases in the dairy's herd size from 690 to 999 will increase the amounts of phosphorus and
  bacteria transmitted from the dairy, its waste application fields, and third-party fields into the
  North Bosque and downstream to Lake Waco, where it will contribute to increased algal growth,
  more bacteria, and the problems that follow. Although Lake Waco is approximately eighty miles
  downstream from the O—Kee Dairy, the distance does not substantially reduce these adverse
  effects because the primary mechanism through which these pollutants are transported are heavy
  rains, which can deliver the pollutants downstream in as little as 3–5 days.

    346 S.W.3d at 795–96. Anyone may publicly comment on a pending water-quality permit, but
only those commentators who are also “affected persons” may obtain a public hearing. TEX.

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
(Cite as: 413 S.W.3d 409)

WATER CODE § 26.028(c); 30 Tex. Admin. Code § 55.201(b).

    After analyzing a non-exclusive list of factors prescribed by agency rule for making this de-
termination, the executive director concluded that the City was not entitled to a hearing because it
did not meet the requirement of an “affected person” with regard to the O–Kee Dairy permit. See
id. § 55.203(c). The executive director accordingly recommended that the Commission deny the
City's request for a contested case hearing. 30 Tex. Admin. Code § 55.209(d), (e). The City re-
plied, filing a supplemental affidavit from its expert Wiland, who disputed the executive director's
analysis and elaborated on his opinion of the causal link between claimed deficiencies in the
proposed permit and water-quality problems in Lake Waco. See id. § 55.209(g).

    After a public meeting at which the Commission considered the City's hearing request and the
O–Kee Dairy permit application, see id. § 55.209(g), the City's hearing request was denied. See id.
§ 55.211(b). The Commission also adopted the executive director's response to public comment,
approved the permit amendment, and issued the permit as the executive director proposed. Alt-
hough the City was denied a contested case hearing, it was afforded several opportunities to make
a record in the agency, including during the public comment period, at two public meetings, in a
written request for contested case hearing, and in responses to the executive director's written
comments and analysis. There is no indication that the Commission prevented the City from filing
any evidence it deemed relevant to the proposed amended permit.

    The City sought judicial review of the Commission's order in district court. See TEX. WATER
CODE §§ 5.351, .354. The district court affirmed the Commission's decision. The City next ap-
pealed to the court of appeals, which reversed and remanded the case to the Commission. 346
S.W.3d 781, 827. The court of appeals concluded that the City was an affected person that *416
was entitled to a contested case hearing and that “the Commission acted arbitrarily and abused its
discretion in concluding” otherwise. Id. The Commission has appealed that decision to this Court.

                                                 II
    Chapter 26 of the Texas Water Code governs CAFO water-quality permits, authorizing the
TCEQ to “issue permits and amendments to permits for the discharge of waste or pollutants into or
adjacent to waters in the state.” TEX. WATER CODE § 26.027(a). Under this chapter, the
Commission is required to give public notice of a permit application and, when requested by a
commissioner, the executive director, or “any affected person,” hold a “public hearing” on the
application. Id. § 26.028(a),(c), (h). Exempt from the “public hearing” requirement, however, are
applications to amend or renew a water-quality permit that do not seek either to “increase signif-

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
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icantly the quantity of waste authorized to be discharged” or “change materially the pattern or
place of discharge,” if “the activities to be authorized ... will maintain or improve the quality of
waste authorized to be discharged,” and meet certain other requirements. Id. § 26.028(d).

    The term “public hearing” is not defined in chapter 26, see id. § 26.001 (Definitions), but in
context can refer either to a hearing before the Commission or a contested case hearing before the
State Office of Administrative Hearings. See id. § 26.020 (authorizing the Commission to hold
hearings “with respect to administering the provisions of this chapter”); id. § 26.01 (authorizing
the Commission to delegate any hearing to the State Office of Administrative Hearings). Public
hearings under chapter 26 can be expansive, such as a public hearing on water quality standards at
which “any person may appear and present evidence” or limited, such as a public hearing on a
particular application for a water quality permit. Compare id. § 26.024 (pertaining to public
hearings on standards) with id. § 26.028(c) (pertaining to public hearings on permit applications).
In the permit application context, the Code indicates that a public hearing means a contested case
hearing under the Texas Administrative Procedure Act. See TEX. WATER CODE § 5.551 (re-
ferring to “an opportunity for public hearing under Subchapters C–H, Chapter 2001, Government
Code, regarding commission actions relating to a permit issued under Chapter 26 [of the Water
Code]”). Chapter 5, subchapter M, of the Water Code makes that connection while laying out the
procedure for notice and opportunities for public comment, public meetings, and contested case
hearings in the environmental permitting process. See id. at §§ 5.551–.559.

    As part of that procedure, subchapter M provides that interested parties, who have filed
comments during the process, may request a contested case hearing. Id. § 5.556(c). The Com-
mission may not grant the request, however, without first determining that the requestor is an
“affected person,” id., which subchapter M defines as:

  [A] person who has a personal justiciable interest related to a legal right, duty, privilege, power,
  or economic interest affected by the administrative hearing. An interest common to members of
  the general public does not qualify as a personal justiciable interest.

    TEX. WATER CODE § 5.115(a); see also 30 Tex. Admin. Code § 55.103 (Agency rule in-
corporating same definition of “affected person”). The Commission is further delegated the au-
thority to promulgate “rules specifying factors which must be considered in determining whether a
person is *417 an affected person.” TEX. WATER CODE § 5.115(a). Pursuant to that authority,
the Commission has drafted the following rule:
  (c) In determining whether a person is an affected person, all factors shall be considered, in-

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413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931
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  cluding, but not limited to, the following:

  (1) whether the interest claimed is one protected by the law under which the application will be
  considered;

  (2) distance restrictions or other limitations imposed by law on the affected interest;

  (3) whether a reasonable relationship exists between the interest claimed and the activity regu-
  lated;

  (4) likely impact of the regulated activity on the health and safety of the person, and on the use of
  property of the person;

  (5) likely impact of the regulated activity on use of the impacted natural resource by the person;
  and

  (6) for governmental entities, their statutory authority over or interest in the issues relevant to the
  application.

    30 Tex. Admin. Code § 55.203(c)(1)–(6).

    In addition to being an affected person, the requestor must timely file a written request for a
contested case hearing, “identify[ing] the person's personal justiciable interest affected by the
[permit] application” and “list [ing] all relevant and material disputed issues of fact that were
raised during the public comment period and that are the basis of the hearing request.” 30 Tex.
Admin. Code § 55.201(a), (c), (d)(2), (4); see also TEX. WATER CODE § 5.556(d).

    After a request is filed, the executive director, the public interest counsel, or the applicant for
the permit can file a response to the request. 30 Tex. Admin. Code § 55.209(d). The response must
address whether the requestor is an affected person and which issues raised in the request are
disputed. The Commission then “evaluates” the request and must grant it if it is made by an “af-
fected person” and is (1) timely filed, (2) “is pursuant to a right to hearing authorized by law,” (3)
complies with the form and content requirements of rule section 55.201, and (4) “raises disputed
issues of fact that were raised during the [public] comment period, that were not withdrawn ... and
that are relevant and material to the commission's decision on the application.” See 30 Tex. Admin.
Code §§ 55.211(b)(3), (c).FN5 The Commission's evaluation of the request is thus a threshold de-

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termination of whether the party is an “affected person” but by rule that determination “is not itself
a contested case subject to the APA.” See id. § 55.211(a).

        FN5. The Commission may also: (1) find the request deficient and proceed to act on the
        permit application without a hearing; (2) refer the request itself to State Office of Admin-
        istrative Hearings for a contested case hearing on the sole question of whether the requestor
        is an “affected person”; or (3) grant a hearing request in the “public interest.” 30 Tex.
        Admin. Code § 55.211(b)–(d).

    As a matter of statutory interpretation, the court of appeals concluded that section 5.115's af-
fected-person definition embodied the constitutional principles of standing. See 346 S.W.3d at 801
(observing that the “cornerstone” of the definition “denotes the constitutionally minimal re-
quirements for litigants to have standing to challenge governmental actions in court”). The court
explained that those principles required the City to establish a concrete and particularized injury in
fact, not common to the general public, that is: (1) actual or imminent; (2) fairly traceable to the
issuance of the permit as proposed; and (3) likely to be redressed by a favorable decision on its
complaint. Id. at 801, 810–11.

    *418 The court concluded that the City possessed a legally protected interest in Lake Waco's
water quality, distinct from that of the general public, but that the City's personal justiciable in-
terest in the O–Kee Dairy permit application—its status as an affected party—depended on the
resolution of disputed fact issues. Id. at 811. The court further acknowledged that the Commission
had weighed the evidence and found these disputed facts against the City, reasoning that the City
had failed to establish “the requisite ‘concrete and particularized,’ imminent injury ‘fairly tracea-
ble’ to the issuance of the O–Kee Dairy permit and likely redressed by denying the permit or
imposing additional conditions.” Id. The court summarized the Commission's factual determina-
tions, bearing on the City's status as an affected party, in its opinion, writing:

  • the amended O–Kee Dairy permit would not increase but reduce the risk and amount of
  phosphorus or pathogens being contributed by the dairy to the North Bosque River;

  • any phosphorus or pollutants the dairy did contribute would be “assimilated” or “diluted” as
  they washed downstream so as to have no ultimate impact on Lake Waco;

  • assuming any phosphorus from the dairy actually reached Lake Waco, whether it would con-
  tribute to algal growth would be, at best, speculative because (a) myriad other sources also

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  contribute phosphorus to Lake Waco (e.g., other dairies, municipal water treatment plants), (b)
  other nutrients also contribute to algal growth (e.g., nitrogen from row-crop farms along the
  other rivers that flow into Lake Waco), and (c) many factors other than nutrients, such as sun-
  light and climate, influence algal growth;

  • in any event, there is no connection between algal growth and episodes of taste and odor
  problems in Lake Waco drinking water, which predate the growth of the dairy industry in the
  North Bosque watershed; and

  • bacteria is not an issue in Lake Waco, which meets regulatory standards for contact recreation,
  and is not among the water bodies deemed “impaired” by bacteria. Nor has North Bosque
  segment 1226—the segment immediately north of Lake Waco that includes the O–Kee
  Dairy—been deemed impaired by bacteria since 2002.

    Id. at 811. Although not determined in a contested case hearing, the court found no reason to
foreclose the Commission's discretion to consider evidence when determining “whether a ‘request
was filed by an affected person as defined by Section 5.115.’ ” Id. at 813 (quoting TEX. WATER
CODE § 5.556(c)).

    The court, however, rejected the Commission's thesis that the City could not show any con-
crete or imminent adverse effect or injury if the amended permit were approved simply because the
amended permit was designed to be more protective of the North Bosque's water quality than the
current one. The court reasoned that the relative protectiveness of the amended permit was,
standing alone, irrelevant because it was an “acknowledged certainty” that there would be some
discharge or runoff into the North Bosque under the amended permit. Id. at 822. And, if that
discharge were to “harm Lake Waco's water quality and the City's legally protected interest in it,
the City would have a personal justiciable interest in ensuring that the permitted activities comply
with current legal requirements.” Id. The court then concluded that “to the extent that the Com-
mission denied the City's hearing request based on the premise that *419 the amended O–Kee
Dairy permit would be ‘more protective’ of the environment than the current one, it acted arbi-
trarily by relying on a factor that is irrelevant to the City's standing to obtain a hearing.” Id. at
822–23.FN6 Finally, the court suggested that the Commission had conceded the City's entitlement
to a contested case hearing by classifying the O–Kee Dairy permit as a “major amendment,” be-
cause the City otherwise met the definition of an “affected person.” Id. at 825.

        FN6. Alternatively, assuming that the more protective features of the amended permit

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        might be considered relevant to the City's standing, the court concluded that the Commis-
        sion nevertheless abused its discretion in not referring the issue for a contested case hearing
        because of the overlap of disputed fact issues on standing and the merits of the permit
        application. 346 S.W.3d at 823. Concluding that the water code and Commission rules
        create an entitlement to a contested case hearing that is analogous to a civil claimant's right
        to have disputed material fact issues determined at trial, the court held that the Commission
        could not resolve disputed, merit-based issues relevant to standing without a contested case
        hearing. Id. at 824–25 (citing Tex. Dep't of Parks and Wildlife v. Miranda, 133 S.W.3d 217
        (Tex.2004)).

                                                   III
    The Commission complains that its classification of the O–Kee permit application as a major
amendment was not a concession that the City (or for that matter an affected person) was entitled
to a contested case hearing. A major amendment is defined by rule as one that “changes a sub-
stantive term ... or a limiting parameter of a permit.” 30 Tex. Admin. Code § 305.62(c)(1). A minor
amendment, on the other hand, is one that “improve[s] or maintain[s] the permitted quality or
method of disposal of waste” (among other things). Id. The Commission submits that the terms are
not mutually exclusive. An application to amend a permit may fit both definitions. For example, an
amendment that changes a substantive term and improves the quality of the waste discharge, the
Commission submits, is both major and minor.

    The distinction is significant in the first instance because a contested case hearing is not
available for a minor amendment to an existing permit. 30 Tex. Admin. Code § 55.201(i)(1). But
there is also no express right to a contested case hearing merely because the applicant seeks a
major amendment. See 30 Tex. Admin. Code § 55.201(i)(5) (limiting right to contested case
hearing where applicant is not applying to increase significantly the quantity of waste discharged
or materially change the pattern or place of discharge, among other considerations).

    [1] Although the Water Code generally grants a person affected by a permit application a right
to a public hearing, the Code also provides exceptions to this general rule. TEX. WATER CODE §
26.028(c), (d). Exempt from this public hearing requirement is an application to amend or renew a
water-quality permit that does not seek either to “increase significantly the quantity of waste au-
thorized to be discharged” or “change materially the pattern or place of discharge,” if “the activi-
ties to be authorized ... will maintain or improve the quality of waste authorized to be discharged,”
and meet certain other requirements. Id. § 26.028(d); see also 30 Tex. Admin. Code § 55.201(i)(5).
Relying on this exemption, the Commission argued in the court of appeals that it could “consider a

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permit's likely effects in determining whether a hearing requestor is an affected person.” 346
S.W.3d at 825. As noted, the court of appeals viewed the inquiry as irrelevant to the issue of the
party's status as an affected person, and, in any event, conceded by *420 the Commission as not
exempt from the hearing requirement because of the “major amendment” label it attached to the
application. Id. at 822–25. In light of the discretion the statute confers on the Commission in de-
termining the need for a public hearing, however, we cannot agree that a proposed amended permit
that purports to provide greater protection for water quality is an irrelevant consideration when
evaluating the need for a public hearing.

    The Commission asserts that the more protective nature of the amended permit is a relevant
factor in its determination of whether the City will be affected by the permit. But whether we
accept this as part of the affected person analysis, as the Commission urges, or follow the court of
appeals' analysis of “affected person” as merely a codification of the constitutional principal of
standing does not ultimately determine the City's right to a hearing in this case. Under either ap-
proach, we must account for the Commission's discretion to limit or deny public hearings on
amended permits that maintain or improve the quality of any discharge and that neither increase
significantly the quantity of waste authorized to be discharged nor change materially the pattern or
place of discharge. TEX. WATER CODE § 26.028(d). Thus, even assuming the City might oth-
erwise qualify as an affected person under the statute's definition, it may still not be entitled to a
public hearing if section 26.028(d)'s exception reasonably applies.

    The Commission's list of factors to be considered in determining affected person status and the
public hearing exemption expressed in section 26.028(d) overlap to some degree. Compare 30
Tex. Admin.Code § 55.203(c) with TEX. WATER CODE § 26.028. For example, one of the
Commission's factors focuses on the “likely impact of the regulated activity on use of the impacted
natural resource by the person.” 30 Tex. Admin. Code § 55.203(c)(5). During the comment period,
the City argued that the increase in the size of the O–Kee herd authorized by the amended permit
would naturally lead to more waste and inevitably to more phosphorous and other nutrients and
pathogens making their way into the North Bosque and eventually into Lake Waco, which, in turn,
would increase the City's water treatment costs. The City supported its argument with expert
opinion in affidavit form. One of the City's experts attested to a causal link between the increasing
algal growths in Lake Waco and phosphorus loading from dairies upstream in the North Bosque
watershed. This expert estimated that the North Bosque contributed about 64 percent of the total
flow into Lake Waco. He further attributed about 30 to 40 percent of the lake's total phosphorus
load to dairy operations in the North Bosque, stemming from runoff and waste discharges during
heavy rainstorms. This source of phosphorus loading was in his opinion the primary cause of the

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lake's heavy algal growth and resulting taste and odor problems in the City's drinking water. The
executive director, however, did not agree that the proposed amendment to the O–Kee permit
would have an adverse affect on Lake Waco or the City.

    Relying on the sworn application, attached expert reports, the analysis and opinions of pro-
fessionals on its staff, and reports, opinions and data about the North Bosque watershed gathered
and analyzed by the TCEQ for nearly a decade, the executive director recommended that the
Commission issue O–Kee's amended permit without a hearing. With this recommendation, he
included a map and fact sheet, the draft permit, his response to public comments, and the dairy's
compliance history. The fact sheet discussed the water-quality inventory for Segments 1226 and
1255, the TMDLs, the TDML implementation*421 plan, the “White Paper” (which was also
submitted by the City), and interoffice memos of the professional staff documenting their analysis
of the application.

    The Commission points out that a permit application to the TCEQ amounts to an affidavit with
expert reports attached. The applicant must verify that the information submitted is true, accurate,
and complete. 30 Tex. Admin. Code §§ 305.44(b), 321.34(b). Maps and technical reports must be
prepared by a licensed professional engineer, a licensed professional geoscientist, or other quali-
fied person. 30 Tex. Admin. Code §§ 305.45(a)(6), (8), 321.34(f). The applications are then re-
viewed by the executive director's professional staff.

    The Commission submits that the O–Kee permit was drafted by an engineer on the executive
director's staff and reviewed by several other professionals. A geoscientist on the executive di-
rector's Water Quality Assessment Team evaluated the proposed permit, as did a soil conserva-
tionist and an engineer at the National Resource Conservation Service and the Texas Soil & Water
Conservation Board. The draft permit incorporated their comments. The Land Application Team
concluded that the permit application proposed adequate buffer zones, and the Water Quality
Assessment Team determined that the permit terms “are expected to preclude a permitted increase
in pollutant loadings from [the dairy].”

    The Commission had before it evidence that the proposed permit's modifications to the dairy's
management of its wastewater and manure would reduce the pollutants from the dairy that were
likely to be discharged into the watershed. There was also evidence that the more stringent waste
application requirements imposed by the proposed permit would reduce the amount of phosphorus
runoff from waste application fields. Indeed, the proposed permit implemented the new regula-
tions promulgated by the Commission to comply with Environmental Protection Agency rules and

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guidelines governing CAFOs. See 40 C.F.R. §§ 122, 123, 412. These new requirements were
categorized by their intended goals: reduce the potential for discharges, minimize the nutrient
loading to land and surface water, and increase Commission oversight of the dairy's operational
activities.

    The proposed permit thus requires the dairy to bring its operations into compliance with the
new rules regulating CAFOs. This includes increasing its wastewater and manure retention control
structure capacity by approximately 13 acre feet. The increased storage capacity is designed to
reduce the number of discharges from the dairy during heavy rainfall events, and reflects that,
under the new rules, CAFOs may only discharge during a 25 year/10 day rainfall event as opposed
to a 25 year/24 hour rainfall event. The existing retention structures were designed to capture and
retain runoff from a 7.3 inch rainfall; the new structures must capture and retain runoff from a 12.2
inch rainfall. The dairy is also required to implement a retained control structure management plan
to assure that it maintains wastewater volumes within the designed operating capacity of the
structures, except during chronic or catastrophic rainfall events, and maintain sludge at or below
the design sludge volume. These management tools reduce the likelihood of discharge during
smaller rainfall events and reduce overflows associated with insufficient wastewater storage ca-
pacity.

    The proposed permit also requires changes in the land application of manure and wastewater
from the dairy, imposing a nutrient management plan designed to *422 minimize nutrient loading
to land and surface water through measurement of soil and waste phosphorus levels. This meas-
urement, known as a risk potential assessment,FN7 ensures that phosphorus levels remain in a
proper balance, which, in turn, reduces runoff risk. Further, in order to minimize nutrient loading,
the land application rate of manure and wastewater must be based on the crop's phosphorus re-
quirements rather than its nitrogen requirements as under the old permit. For a coastal bermuda
crop, all other things being equal, the result is a 40% decrease in the application rate. Manure,
sludge, or wastewater in excess of that permitted to be applied to the land must be delivered to a
composting facility, delivered to a permitted landfill, beneficially used by land application outside
the watershed, or provided to operators of third-party fields for beneficial use in a manner con-
sistent with Commission rules. The regulations on manure disposal contained in the proposed
permit limit the unregulated disposal of manure and wastewater in the watershed.

        FN7. Risk potential is determined by measuring, among other things, the current phos-
        phorus levels in the soil, the proposed phosphorus application rate, and dairy's proximity to
        the nearest water body—here the Bosque. Application rates are then adjusted according to

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        the risk potential—i.e. the higher the risk, the lower the application rate. In addition, the
        application rate is determined by the amount of nutrients needed for optimal crop produc-
        tion and then balances that need between the nutrients in the soil and the nutrient
        source—manure and wastewater. Once the nutrients are in balance, it is very unlikely that
        excess nutrients will leave the site and affect water quality.

    Any waste stored temporarily on-site must be stockpiled in well-drained areas and adequately
sloped to ensure proper drainage and prevent ponding of water. To protect against discharge,
stockpiles must generally be kept beneath impermeable roofs to ensure that waste does not leave
the storage area. Waste may also be composted on-site so long as it is done in accordance with
Commission rules. See 30 Tex. Admin. Code § 332.

    Excess waste that cannot be used on site must be removed. See TEX. WATER CODE
26.503(b)(2). Most removal methods require delivery of the waste to locations outside of the North
Bosque watershed, but the Code also allows delivery of waste to third-party fields—areas of land
in the watershed not owned, operated or otherwise controlled by the permitee. The City objected to
this aspect of the permit, but the Commission found it to be in compliance with the rules, which
require all transferred waste to be applied to those fields at the proper agronomic rate based on the
soil's existing phosphorus content. 30 Tex. Admin. Code §§ 321.36, 321.40. The dairy is further
prohibited from delivering manure or wastewater to a third-party field once the soil test phos-
phorus analysis shows a level equal to or greater than 200 ppm. Moreover, the third-party fields
must be identified in the dairy's pollution prevention plan, and quarterly reports with the name,
locations, and amounts of manure and wastewater transferred to operators of third party fields
must be submitted. To ensure compliance with all the new requirements, the permit implements
increased oversight of operational activities by the Commission. These measures require O–Kee to
submit reports to the Commission concerning, among other things, land application records, an-
nual soil samples, and chronic rainfall discharges.

    The Commission considered these management tools and found that although there will be
more cows at the dairy, the overall impact of the permit's requirements will be to reduce the like-
lihood that phosphorus from the dairy will enter the *423 watershed. The Commission concluded
that the proposed permit would effectively decrease, rather than increase, the amount of phos-
phorus discharged into the watershed and thus have an overall beneficial environmental impact. It
therefore rejected the City's argument that the City would be adversely affected by its granting the
permit.

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    The City questions whether the proposed permit will improve the water quality in the North
Bosque and argues that, in any event, it has a justiciable interest in the proposed permit because it
authorizes the discharge of waste that ultimately affects its interests in Lake Waco. The City thus
focuses on potential harm rather than any relative environmental improvement under the proposed
permit. The issue, however, is whether the City has a statutory right to intervene in the permitting
process and obtain a contested case hearing under the Administrative Procedure Act.

    [2] Although the APA defines “contested case” and sets the procedural framework, the
agency's enabling act here sets out whether rights are to be determined after an opportunity for
adjudicative hearing, and agency rules may decide whether that opportunity may include a con-
tested case hearing. For example, this court of appeals has previously affirmed the TCEQ's rule
that a request for a contested case hearing is not itself a contested case hearing, concluding that a
hearing request may be decided through a less formal proceeding before the Commission. Collins
v. Tex. Natural Res. Conservation Comm'n, 94 S.W.3d 876, 884–85 (Tex.App.–Austin 2002, no
pet.).

     Collins involved a poultry farm that applied for an individual water quality permit to change
from a dry waste management system to a system that generated wastewater to be stored in lined
lagoons and irrigated onto crop land. A neighbor to the poultry operation protested the application
and requested a contested case hearing. After briefing and a limited hearing before the State Office
of Administrative Hearings to determine the neighbor's proximity, the TCEQ denied the neigh-
bor's hearing request. Construing Water Code § 5.115, as it existed before the statute's amendment
in 1999, the court found that the Commission's denial of the hearing request was supported by
substantial evidence. Id. at 885.

    The Collins court also rejected the neighbor's claim that he was denied due process. The court
reasoned that the issuance of a permit in itself does not deprive a neighboring landowner of any
concrete liberty or property interest. Id. at 884–85. The court observed that the Commission's rules
seek to protect such interests and expressly state that “the issuance of a permit does not authorize
any injury to persons or property or an invasion of any other property rights.” Id. at 884 (quoting
30 Tex. Admin. Code § 305.122(c)). The court further concluded that even if a private property
interest were at issue, “due process never requires all the trial-like procedures of a statutory con-
tested case hearing.” Id. at 885. The court of appeals accordingly upheld the Commission's denial
of the neighbor's hearing request, concluding that the Commission's process for evaluating hearing
requests by persons who claimed to be affected, satisfied procedural due process requirements. Id.

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    Focusing on its “affected party” analysis, the court of appeals concludes that the case here is
controlled by other decisions which hold “that it is the existence of some impact from a permitted
activity, and not necessarily the extent or amount of impact, that is relevant to standing.” 346
S.W.3d at 822 (citing *424United Copper Indus., Inc. v. Grissom, 17 S.W.3d 797, 802– 04
(Tex.App.–Austin 2000, pet. dism'd) and Heat Energy Advanced Tech., Inc. v. West Dall. Coal. for
Envtl. Justice, 962 S.W.2d 288, 295 (Tex.App.–Austin 1998, pet. denied)). United Copper and
Heat Energy likewise focus on the requestor's status as an affected person and do not otherwise
consider the person's statutory right to a hearing or statutory exceptions to that right.

    In Heat Energy, the owner of a hazardous and industrial waste storage and processing facility
sought to renew its permit to conduct its business. 962 S.W.2d at 289. A coalition of nearby res-
idents asked the Commission to conduct a contested case hearing on the renewal application. Id.
The request was filed pursuant to section 361.088 of the Solid Waste Disposal Act, which requires
the Commission to “provide an opportunity for a hearing to the applicant and persons affected”
before a permit is issued, amended, extended or renewed. TEX. HEALTH & SAFETY CODE §
361.088(c). The requirement for a contested case hearing does not apply, however, when the ap-
plication is to renew a permit for the storage or processing of hazardous waste that was generated
on-site and not mixed with waste generated elsewhere, and the Commission has complied with the
notice and comment requirements of the Water Code. Id. § 361.088(e); see also TEX. WATER
CODE §§ 5.552–.555. This hearing-requirement exemption was not at issue in Heat Energy.
Similarly, no hearing-requirement exemption was discussed, or even asserted, in United Copper.

    The Commission complains that the court of appeals has misread the statutory exemption and
agency rules that define hearing rights under chapter 26 of the Water Code. Agency rules provide
that an affected person may request a contested case hearing “when authorized by law.” 30 Tex.
Admin. Code § 55.201(b)(4). But no right to a contested case hearing exists for “an application,
under Texas Water Code, Chapter 26, to renew or amend a permit” under certain circumstances.
Id. § 55.201(i)(5). Thus, a person affected by a proposed water-quality permit has the right to
request a hearing (if the person meets the statutory definition of “affected person” in section 5.115
of the Water Code), but the Commission has discretion to deny the request when the proposed
permit is an amendment or renewal and (1) the applicant is not applying to significantly increase
the discharge of waste or materially change the pattern or place of discharge, (2) the authorization
under the permit will maintain or improve the quality of the discharge, (3) when required, the
Commission has given notice, the opportunity for a public meeting, and considered and responded
to all timely public comments, and (4) applicant's compliance history raises no additional con-
cerns. TEX. WATER CODE § 26.028(d); Tex. Admin. Code § 55.201(i)(5). And again, the court

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of appeals has held that that determination is not itself a contested case hearing but may be made
through a less formal proceeding before the Commission. Collins, 94 S.W.3d at 884–85. The
statute similarly supports a less formal determination when section 26.028(d) applies, stating that
the Commission may under these circumstances approve an application to renew or amend a
permit “at a regular meeting without the necessity of holding a public hearing.” TEX. WATER
CODE § 26.028(d).

    [3] We conclude that there is evidence in the record to support the Commission's determination
that the proposed amended permit here did not seek to significantly increase or materially change
the authorized discharge of waste or otherwise foreclose Commission discretion to consider the
amended application at a regular meeting*425 rather than after a contested case hearing. The
Commission therefore did not abuse its discretion in denying the City's request for a contested case
hearing on O–Kee's application for an amended permit.

   The court of appeals' judgment remanding the matter to the Commission for a contested case
hearing is accordingly reversed and judgment is rendered affirming the Commission's decision to
deny the hearing request.

Tex.,2013.
Texas Com'n on Environmental Quality v. City of Waco
413 S.W.3d 409, 56 Tex. Sup. Ct. J. 931

END OF DOCUMENT

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