Texas Environmental Quality Commission Implements Changes to Compliance History Rules | Pillsbury Winthrop Shaw Pittman LLP


Currently, TCEQ annually calculates a compliance history score for regulated entities based on the past five years. The current classifications are Poor, Satisfactory, or Performing – or unclassified if no compliance information is available for the site. However, annual compliance history calculations may not reflect emergency events in a timely manner.

The new rule, to be included in 30 Texas Administrative Code, Chapter 60, gives the ED the authority to immediately mark the classification of the site’s compliance history as “under review” in the wake of an emergency event. The ED may then reclassify the course as suspended between 30 and 90 days after being flagged as “under review”. A “suspended” designation may be given when the ED determines that “dangerous circumstances” exist due to the occurrence of a significant emergency event, such as a major explosion or fire. Such circumstances include:

  • An event that has a significant impact on the surrounding community and environment;
  • An event that results in emergency response by a federal or state agency to clean up a pollutant, contaminant, or other material that is regulated by that agency; and
  • An event that has certain urgent or serious consequences.

A “suspended” designation means that this site is treated as “unsatisfactory performance” for the purposes of relevant regulatory decisions and will remain in place for a minimum of one year and a maximum of three years. This rule describes an appeal process upon application for a TCEQ review.

TCEQ’s rationale for the rulemaking is that “several major emergencies at industrial facilities in recent years have had significant public health and environmental impacts, prompting a review of the compliance history of the regulated entities involved in these incidents.”

This rulemaking could have a significant impact on facilities affected by emergencies, subjecting them to increased scrutiny by the agency. A classification as “suspended” or “unsatisfactory performer” could result in stricter enforcement by TCEQ, additional oversight of environmental compliance, and the potential for higher administrative penalties. However, the proposed rules indicate that TCEQ does not intend to reclassify to change the underlying numerical points of compliance history associated with location.

The rule could also impact facilities beyond the emergency event in question. (See 30 TAC § 60.3(a)(3)(B)(i) authorizing the use of compliance histories by the agency in regulatory action). In addition, TCEQ may, without prior notice, conduct investigations into “unsatisfactory performance” sites and may request additional environmental compliance reports. This designation may also adversely affect a facility’s approval activities, which are subject to a review of compliance history. Therefore, pending applications or those submitted during the period in which the facility was rated as “suspended” or “unsatisfactory”, whether for issuance, renewal, modification or supplementation, could be affected.

The rule was published in the December 31, 2021 issue of the Texas Register under 46 Tex. Reg. published. 9183. TCEQ has scheduled a virtual public hearing on the proposed rule for January 27, 2022 and written comments will be accepted through February 1, 2022. While the proposed rule received general acclaim and TCEQ was commended there for taking on the task, several remain, affecting multiple aspects of the rule.

Many submitted comments recommending that TCEQ exclude extreme weather events from consideration and that regulated entities should be able to demonstrate that any event or urgency in question arose as a result of a natural disaster, extreme weather or catastrophic event , which was inevitable. TCEQ clarified that such extreme weather conditions will not result in an understatement and that the proposed rule is relevant only if caused by an actual, unauthorized release of pollutants, contaminants or other agency regulated materials. In addition, TCEQ will continue to encourage regulated entities to provide context and information to the ED to show how or why a Significant Event should be attributed to unavoidable causes.

TCEQ opposed a proposed change to allow regulated entities to provide the ED with information about an emergency event and any resulting urgent circumstances prior to an initial classification as under review. Rather, it is recommended that such demonstrations be conducted at any time prior to filing an application for a TCEQ review that may immediately follow the event, or prior to being classified as “under review”. TCEQ viewed the requested change as a potential procedural delay of designations under review. By allowing the ED to immediately flag a site’s compliance history as “under review,” both the public and agency staff can be promptly notified of a qualifying significant event at the site that warrants review.

As an alternative to the proposed rule, TCEQ was asked to consider using the traditional assessment and classification system for compliance history, but to remove it from the annual process as needed to avoid creating an entirely new process. TCEQ denied the request, stating that using the traditional scoring and classification system for compliance history was not an option. The system is dependent on the existence of compliance history components, and where such component is a final enforcement order or court judgment, the component may not exist months or years after the urgent circumstances, thereby affecting the website’s compliance history remains. The rule closes this time gap by immediately marking a location as verified and allowing for reclassification if necessary. TCEQ changed the time limit on the ED’s authority to designate a site’s compliance history as under review to no later than 90 days from the onset of the urgent circumstances.

While no changes were made, many comments called for clarification of the definition of “significant community disruption” and “active emergency response” required by federal or state agencies. TCEQ explained that what qualifies as “significant community disturbance” will be decided on a case-by-case basis, which will include an assessment of impacts on local, surrounding communities. TCEQ stated that by accepting the change, it does not want to inadvertently limit whether community disruption can be considered a result of the site event.

Some regulated bodies feared that the evacuations were qualified to preclude evacuations from sites where the emergency events are occurring, as those sites often conduct partial or full evacuations as a precautionary measure, and requested that the evacuations be limited to “off-site” places of employment. TCEQ approved the change to distinguish between any evacuation and evacuation of people off-site.

Several commenters were concerned about the inclusion of “existing accommodation” as a condition of the proposed rule, stating that this could discourage regulated entities from issuing it where there is only a potential risk of exposure to a community from a minor incident. They also requested that if this remains a criterion for defining urgent circumstances, existing emergency shelter be limited to locations where the emergencies occurred and be limited by a minimum time frame. While TCEQ denied the minimum period, TCEQ amended to qualify relevant off-site accommodations for individuals, which will be distinct from those occurring on-site without significant community impact.

Requests have been made to change the period during which the ED must decide whether to issue a Note of Decision to Reclassification after it has already designated the classification to be reviewed, to 90 days after designation. TCEQ opposed the change and elected to maintain the originally proposed timeline for notifying the reclassification decision to be no sooner than 30 days and no later than 90 days after the classification as “under review”. According to TCEQ, this is to ensure that the compliance history program provides a better and more accurate measurement of how such websites are performing in the face of significant events, making it a more effective tool for ensuring oversight and regulatory consistency.

Finally, commenters were concerned that sites classified as exposed might be subject to various restrictions for the duration of the reclassification, such as . To address these concerns, TCEQ amended the proposed rule to allow the owner or operator of a reclassified or banned website to demonstrate to the ED that such permissions should be granted or kept available. This allows the ED to use its discretion to decide whether the evidence is sufficient to justify allowing the permits to remain available.

TCEQ approved the proposed rule on June 1, 2022 during the Commissioners’ Meeting and will come into effect on June 23, 2022.


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