1. Compliance History Karen Berryman Texas Commission on Environmental Quality (TCEQ) Austin, Texas October 17, 2002

2. Compliance History: 30 TAC Chapter 60 A Brief History House Bill (HB) 2912 (or the Sunset Bill) Two Phases of CH rulemaking – Phase I: Components of CH, Effective 2/1/02 – Phase II: Classification and Use of CH, Effective 9/1/02

3. Compliance History: 30 TAC Chapter 60 A Brief Overview Components Include: – Positives: environmental Audits, EMSs, voluntary compliance assessments, voluntary pollution reduction programs, early compliance – Negatives: NOVs, enforcement orders, court judgments, consent decrees, criminal convictions, environmental enforcement actions in other states

4. Compliance History: 30 TAC Chapter 60 A Brief Overview CH and Classifications of sites and persons – As needed for agency decisions beginning 9/01/02 – Annually, for all sites and persons, beginning 9/01/03 Classifications include High, Average, and Poor Inadequate Information: Average by Default Violations Designated as Major, Moderate, or Minor

5. Compliance History: 30 TAC Chapter 60 A Brief Overview Repeat Violator Designation (by site) – Based on four criteria Complexity of site (types of permits) Number of sites in Texas Size of site (FINs, WQ Outfalls, AHWMUs) Location of site (in non-attainment area) – Determined by number of: criteria points; and Major Violations during CH period

6. Compliance History: 30 TAC Chapter 60 A Brief Overview Repeat Violator: – Major Violation does not have to be the same violation; rather, any violations designated Major – There is an exemption provision

7. Compliance History: Site Rating Formula: (Violation pts 1 ) + (RV pts 2 ) - (Env Audit pts 3 )  (No. of investigations 4 + 1)  X (0.9 if Cert. EMS 5 ) 1 Points for maj/mod/min violations in NOVs, orders, etc, as per §60.2(e)(1)(A) - (H), as totaled in §60.2(e)(1)(I). 2 500 points if the site is designated a repeat violator (RV) under §60.2(d); otherwise, 0 points, per §60.2(e)(1)(J) 3 If the total in §60.2(e)(1)(J) > 0, then subtract any applicable points for environmental audits, per §60.2(e)(1)(K) 4 Per §60.2(e)(1)(L), which provides def. of "investigation" (excludes those initiated through citizen complaints) 5 If the person receives certification of an EMS under Chapter 90 (relating to Reg. Flex. and EMSs) and has implemented the EMS at the site > one year, then multiply total by 0.9, per §60.2(e)(1)(M)

8. Compliance History: 30 TAC Chapter 60 A Brief Overview Point Ranges: – Fewer than 0.10 points – High Performer – 0.10 points to 45 points – Average Performer – More than 45 points – Poor Performer

9. Compliance History: 30 TAC Chapter 60 A Brief Overview Mitigating Factors: – Only considered for sites classified as “poor performer” based on the formula The Executive Director shall consider The Executive Director may reclassify based upon

10. Compliance History: 30 TAC Chapter 60 A Brief Overview Mitigating Factors Include: – compliance history components in §60.1(c)(10) - (12) Voluntary on-site compliance assessments conducted by the ED under a special assistance program participation in a voluntary pollution reduction program a description of early compliance with or offer of a product that meets future state or federal government environmental requirements – EMSs not certified under Chapter 90

11. Compliance History: 30 TAC Chapter 60 A Brief Overview Mitigating Factors Include (cont.): – a person all of whose other sites have a high or average performer classification purchased a site with a poor performer classification or became permitted to operate a site with a poor performer classification if the person entered into a compliance agreement with the ED regarding actions to be taken to bring the site into compliance prior to 9/1/02

12. Compliance History: 30 TAC Chapter 60 A Brief Overview Mitigating Factors Include (cont.): – voluntarily reporting violations not otherwise required to be reported (other than under the Environmental Audit Act), or reporting under the Environmental Audit Act but not being granted immunity from an administrative or civil penalty for that violation(s) by the agency.

13. Compliance History: 30 TAC Chapter 60 A Brief Overview Mitigating Factors Include (cont.): When a person – all of whose other sites are high or average – purchased a site with a poor classification – contemporaneously entered into CA with ED regarding actions to be taken to bring the site into compliance, the ED: shall reclassify site from poor to average with 45 points until next annual CH classification performed; and may, in subsequent CH classifications, reclassify the site from poor to average with 45 points based upon evaluation of compliance with terms of CA.

14. Compliance History: 30 TAC Chapter 60 A Brief Overview Person Classification – Determined by averaging the site ratings for all sites owned or operated by a person in Texas – Note: When a site is classified as Average Performer by Default, the site rating assigned is 3.01 points.

15. Compliance History: 30 TAC Chapter 60 A Brief Overview Notice of Classification: – Shall be posted on TCEQ website within 30 days after completion of the classification

16. Compliance History: 30 TAC Chapter 60 A Brief Overview Use of Compliance History: – Permitting Decisions – Enforcement (modifications to Penalty Policy, eff. 9/1/02) – Investigations (unannounced for poor performers) – Innovative Programs (poor performers cannot participate in regulatory flexibility programs or receive EMS incentives)

17. Compliance History: 30 TAC Chapter 60 A Brief Overview Penalty Policy Revision Considers: – Compliance History components (for the site under enforcement - positives and negatives) – Repeat Violator designation (for the site) – Person Classification (can get upward or downward adjustment to base penalty amount)

18. Compliance History: 30 TAC Chapter 60 A Brief Overview Appeal of Classification: – A person or site classification may be appealed only if the person or site is classified as either a poor performer or average performer with 30 points or more. – The appeal process is outlined in the rule. – The ED’s decision constitutes final and appealable action. – Any appeal of the ED’s decision must go to district court.

19. Compliance History: 30 TAC Chapter 60 A Brief Overview During the pendency of an appeal to the ED or judicial review of the ED's decision under this subsection, the agency shall not, for the person or site for which the classification is under appeal or judicial review: – conduct an announced investigation; – grant or renew a flexible permit under THSC, Chapter 382; – allow participation in the regulatory flexibility program under TWC, §5.758; or – grant authority to discharge under a general permit under TWC, §26.040(h).

20. Compliance History: 30 TAC Chapter 60 A Brief Overview Corrections of Classifications: – The ED, on his own motion or the request of any person, at any time may correct any clerical errors in person or site classifications. – Clerical errors include typographical errors and mathematical errors.

21. Compliance History: TCEQ Perspective Developed Rule based upon: – Directives given (legislation) – Examples (other states - nothing similar) – Limited time frame in which to develop – Resources and information available TCEQ will modify the rule, if/as needed.

22. Compliance History: TCEQ Perspective Key Issues: – Implementation of the rule – “The Button” (automated system: CCEDS) – Correction of errors – Working with Poor Performers – Monitoring implementation of rule – Resources

23. Compliance History: TCEQ Perspective Current Status of Developing CHs and Expected Progress – Database(s) – Who is developing CHs now? – Who will ultimately develop them?

24. Compliance History: TCEQ Perspective QA/QC and Guidance Materials for TCEQ Staff In Classifying Violations as Major/Moderate/Minor And Applying Other Aspects of the Rule – Which Authorizations Require a CH – Major/Moderate/Minor - violation designation – Penalty Policy

25. Compliance History: TCEQ Perspective QA/QC and Guidance Materials – Enforcement Initiation Criteria (EIC) – Major/Moderate/Minor Violations (Ch. 60) – Penalty Policy All are distinct, stand-alone documents.

26. Compliance History: TCEQ Perspective How Can Companies Challenge NOVs Issued in 1999-2001? – Procedure in Phase I Adoption Preamble – Field Operations Division standardization efforts: FODSOP EIC Training on Major/Moderate/Minor re: Violations

27. Compliance History: TCEQ Perspective How Can Companies Challenge Their Classification? Two Avenues: – Corrections (“informal” - TCEQ error/oversight) – Appeals (“formal”)

28. Compliance History: TCEQ Perspective Corrections: Send letter (with accompanying documentation) to: Ann McGinley, Director Enforcement Division TCEQ

29. Compliance History: TCEQ Perspective Appeals: Send letter to the Executive Director: ATTN: Ann McGinley, Director Enforcement Division TCEQ

30. Compliance History: TCEQ Perspective TCEQ Point of Contact: – Karen Berryman (512) 239-2172 kberryma@tceq.state.tx.us OR – See TCEQ CH web page: http://www.tnrcc.state.tx.us/enforcement/ compl_histories.html