[Federal Register Volume 63, Number 118 (Friday, June 19, 1998)]
[Notices]
[Pages 33655-33665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16249]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-6111-6]


State Program Requirements; Application To Administer the 
National Pollutant Discharge Elimination System (NPDES) Program; Texas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Application for approval of Texas Pollutant Discharge 
Elimination System.

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SUMMARY: The State of Texas has submitted a request for approval of the 
Texas Pollutant Discharge Elimination System (TPDES) program pursuant 
to section 402(b) of the Clean Water Act (CWA or ``the Act''). With 
this request, the Texas Natural Resource Conservation Commission 
(TNRCC) seeks approval to administer a major category partial permit 
program for all discharges of pollutants into waters of the United 
States under its jurisdiction. Today, EPA Region 6 is providing public 
notice of Texas' request for TPDES program approval and of both a 
public hearing and public comment period on the State's program 
approval submission. EPA will either approve or disapprove the State's 
request after considering all comments it receives.

ADDRESSES FOR VIEWING/OBTAINING COPIES OF DOCUMENTS: Copies of Texas' 
TPDES program approval submission

[[Page 33656]]

(referred to throughout this notice as Texas' ``application'') and all 
other documents in the official record (Docket No. 6WQ-98-1) are 
available for inspection from 9 am to 4 pm, Monday through Friday, 
excluding legal holidays, at EPA Region 6, 12th Floor Library, 1445 
Ross Ave., Dallas, Texas 75202.
    A copy of Texas' TPDES application is also available for inspection 
from 8 am to 5 pm, Monday through Friday, excluding State holidays, at 
Record Services, Room 1301, Building F, TNRCC, 12100 Park 35 Circle, 
Austin, Texas 78753. You may contact Records Services at (512) 239-
0966.
    Chapters 1-8 of Texas' TPDES application are available for review, 
but not copying, at the following TNRCC Regional Offices:

Region 1 (Amarillo): 3918 Canyon Dr., Amarillo, TX 79109-4996, (806) 
353-9251, FAX (806) 358-9545
Region 2 (Lubbock): 4630 50th St., Suite 600, Lubbock, TX 79414-3509, 
(806) 796-7092, FAX (806) 796-7107
Region 3 (Abilene): 209 S. Danville, Suite B200, Abilene, TX 79605-
1451, (915) 698-9674, FAX (915) 692-5869
Region 4 (Arlington): 1101 E. Arkansas Ln., Arlington, TX 76010-6499, 
(817) 469-6750, FAX (817) 795-2519
Region 5 (Tyler): 2916 Teague Dr., Tyler, TX 75701-3756, (903) 535-
5100, FAX (903) 595-1562
Region 6 (El Paso): 7500 Viscount Blvd., Suite 147, El Paso, TX 79925-
5633, (915) 778-9634, FAX (915) 778-4576
Region 7 (Midland): 3300 North A St., Bldg. 4, Suite 107, Midland, TX 
79705-5421, (915) 570-1359, FAX (915) 570-4795
Region 8 (San Angelo): 301 W. Beauregard Ave., Suite 202, San Angelo, 
TX 76903-6326, (915) 655-9479, FAX (915) 658-5431
Region 9 (Waco): 6801 Sanger Ave., Suite 2500, Waco, TX 76710-7807, 
(254) 751-0335, FAX (254) 772-9241
Region 10 (Beaumont): 3870 Eastex Fwy., Suite 110, Beaumont, TX 77703-
1892, (409) 898-3838, FAX (409) 892-2119
Region 11 (Austin): 1921 Cedar Bend, Suite 150, Austin, TX 78758-5336, 
(512) 339-2929, FAX (512) 339-3795
Region 12 (Houston): 5425 Polk Ave., Suite H, Houston, TX 77023-1486, 
(713) 767-3500, FAX (713) 767-3520
Region 13 (San Antonio): 140 Heimer Rd., Suite 360, San Antonio, TX 
78232-5042, (210) 490-3096, FAX (210) 545-4329
Region 14 (Corpus Christi): 6300 Ocean Dr., Suite 1200, Corpus Christi, 
TX 78412-5503, (512) 980-3100, FAX (512) 980-3101
Region 15 (Harlingen): 134 E. Van Buren, Suite 301, Harlingen, TX 
78550-6807, (956) 425-6010, FAX (956) 412-5059

    Copies of the entire State TPDES application are available in paper 
format. Copies of most documents are also available in electronic 
format.
    Part or all of the State's application (which comprises 
approximately 4106 pages) may be copied at the TNRCC office in Austin, 
or EPA's office in Dallas, at a minimal cost per page. A paper copy of 
the entire application may be obtained from the TNRCC office in Austin 
for a $510.00 fee. The cost of the principal documents, i.e the 
Attorney General's Statement, Memorandum of Agreement, Program 
Description, water quality Continuing Planning Process (Continuing 
Planning Process + Implementation Procedures) and the Enforcement 
Management System (Enforcement Guidelines + Compliance Procedures 
Manual) all without their other associated appendices is $152.00.
    Copies of the following portions of the TPDES application are 
available in both paper and electronic format:

Chapter 1--Memorandum of Agreement Between TNRCC and EPA
Chapter 2--Overview of the TNRCC
Chapter 3--Permitting Program Description
Chapter 4--Pretreatment Program Description
Chapter 5--Sewage Sludge Program Description
Chapter 6--Enforcement Program Description
Chapter 7--Program Cost and Funding Description
Chapter 8--Attorney General's Statement of Legal Authority
Table 1  TPDES Estimated Program Costs (Existing Employees)
Table 2  TPDES Estimated Program Costs (New Employees)
Appendix 2-A Facilities Permitted by the TNRCC Having Oil & Gas Related 
Activities
Appendix 3-C TNRCC Continuing Planning Process
Appendix 3-D Implementation of the TNRCC Standards Via Permitting
Appendix 3-E TNRCC Playa Policy
Appendix 3-I Standard Permit Provisions
Appendix 3-J Sewage Sludge Provisions
Appendix 6-A Enforcement Guidelines
Appendix 6-B Water Quality Inspection Procedures
Appendix 6-C Water Quality Inspection/Audit Forms
Appendix 6-D Water Quality Inspection Letters
Appendix 6-G Compliance Procedures Manual

    The following portions of the TPDES application are only available 
in paper format:

Figure 2-1  TNRCC Organization
Figure 2-2  Organization of Office of Chief Clerk
Figure 2-3  Organization of Legal Division
Figure 2-4  Organization of Field Operations Division
Figure 2-5  Organization of Enforcement Division
Figure 2-6  Organization of Water Quality Division
Figure 3-1  Wastewater Permitting Process Flow Chart
Figure 5-1  Sewage Sludge Application Registration Procedure
Figure 5-2  Sewage Sludge Application Permitting Procedure
Table 3  Organizational Structure and Resources for the TPDES Program
Appendix 3-A  Industrial and Municipal Wastewater Permit Application 
Forms
Appendix 3-B  Miscellaneous Permit Application Forms
Appendix 3-F  Designation of Major and Minor Discharges
Appendix 3-G  Temporary and Emergency Order Application Forms/Shell 
Documents
Appendix 3-H  Implementation of the Basin Permitting Rule
Appendix 3-K  CAFO Permit Application Form
Appendix 5-A  Sewage Sludge Permit and Beneficial Land Use Registration 
Applications
Appendix 5-B  Sewage Sludge Annual Reporting Form
Appendix 5-C  SSI: Beneficial Land Use Registrants and Sludge Only 
Permittees
Appendix 5-D  SSI: POTWs and Other Treatment Works Treating Sewage 
Sludge in Texas
Appendix 6-E  Complaints Handling
Appendix 6-F  Noncompliance Reports
Appendix 7-A  Position Descriptions for TPDES Functions
Appendix 7-B  State Job Classifications for all TPDES Positions
Texas Rules (30 TAC)
Memorandums of Understanding
Texas Statutes

    Copies of the documents available in electronic format are 
accessible on the Internet at the EPA Region 6 web page http://
www.epa.gov/region6/6wq/npdes/publicnotice.htm and the TNRCC web page 
http://www.tnrcc.state.tx.us.
    Every effort has been made to include each document relevant to 
EPA's decision on this matter in the official record for Docket No. 
6WQ-98-1. However, because the documents associated with Texas' request 
for

[[Page 33657]]

TPDES program approval are voluminous and have come from many sources, 
EPA invites input from the public on any document that the public feels 
should have been included in the official record, but has not been.

DATES FOR THE PUBLIC COMMENT PERIOD AND PUBLIC HEARING: The public 
comment period on the State's request for approval to administer the 
proposed TPDES program will be from the date of publication until 
August 3, 1998. Comments must be received or post-marked by no later 
than midnight on August 3, 1998.
    Both an informal public meeting and a public hearing will be held 
in Austin, Texas on July 27, 1998. The public meeting will include a 
presentation on the TPDES program approval request, a brief update on 
the status of the ongoing Endangered Species Act Sec. 7 consultation, 
and a question and answer session. Written, but not oral, comments for 
the official record will be accepted at the public meeting. The public 
hearing will be conducted in accordance with 40 CFR 124.12, and will 
provide interested parties with the opportunity to provide written and/
or oral comments for the official record. The public meeting will begin 
at 1:00 pm. The public hearing will begin at 7:00 pm. Both the public 
meeting and the public hearing will be held at the Holiday Inn-South, 
3401 South IH 35, Austin, Texas 78741 (IH-35 and Woodward Dr.).
    All public comments should reference Docket No. 6WQ-98-1 and may be 
in either paper or electronic format. If submitting comments in paper 
format, please submit the original and three copies of your comments 
and enclosures (including references). To ensure that EPA can read, 
understand and therefore properly respond to comments, the Agency would 
prefer that comments be typed or legibly written and that commentors 
cite the paragraph(s) or sections in the notice or supporting documents 
to which each comment refers. Commentors who want EPA to acknowledge 
receipt of their comments should enclose a self-addressed stamped 
envelope.
    Send all paper copy comments to: Ms. Wilma Turner (6WQ-O), Water 
Quality Protection Division, EPA Region 6, 1445 Ross Avenue, Dallas, 
Texas 75202. Comments may also be submitted electronically to the 
following e-mail address: ``[email protected]''.
    Electronic comments must be submitted as an ASCII file or in 
WordPerfect 6.0 format, avoiding the use of special characters and 
forms of encryption. Electronic comments should be identified by the 
docket number 6WQ-98-1. EPA requests that electronic comments also 
include the commentor's postal mailing address. No Confidential 
Business Information (CBI) should be submitted through e-mail. Comments 
and data will also be accepted on disks in WordPerfect 6.0 format or 
ASCII file format. For those without regular access to an e-mail 
system, electronic comments on this notice may be filed online at many 
Federal Depository Libraries.
    A copy of each comment should be submitted to: Mr. Thomas W. Weber, 
Water Quality Division, Texas Natural Resource Conservation Commission, 
P.O. Box 13087, Austin, Texas 78711-3087.

FOR FURTHER INFORMATION CONTACT: Ms. Wilma Turner at the EPA address 
listed above or by calling (214) 665-7516, FAX (214) 665-6490, e-mail: 
[email protected] or Mr. Tom Weber at the TNRCC address listed above 
or by calling (512) 239-4576, Fax: (512) 239-4420).

SUPPLEMENTARY INFORMATION: Section 402 of the CWA created the NPDES 
program under which EPA may issue permits for the point source 
discharge of pollutants to waters of the United States under conditions 
required by the Act. Section 402(b) requires EPA to authorize a State 
to administer an equivalent state program, upon the Governor's request, 
provided the State has appropriate legal authority and a program 
sufficient to meet the Act's requirements.
    The regulatory requirements for state program approval are set 
forth in 40 CFR part 123. 40 CFR 123.21 lists the basic elements of an 
approvable application. EPA Region 6 considers the documents submitted 
by the State of Texas administratively complete at the time of this 
document. EPA will not make a final decision on TPDES program approval 
until after (1) considering all public comments provided during the 
public comment period or at the public hearing, (2) completion of the 
ongoing consultations with the U.S. Fish and Wildlife Service and the 
National Marine Fisheries Service on effects program approval may have 
on endangered or threatened species and their designated critical 
habitat, and (3) completion of ongoing consultations with the State 
Historic Preservation Officer on effects program approval may have on 
historic properties or sites listed or eligible for listing in the 
National Register of Historic Places.
    On February 5, 1998, the Governor of Texas requested NPDES major 
category partial permit program approval 1 and submitted a 
program description (including funding, personnel requirements and 
organization, and enforcement procedures), an Attorney General's 
statement, copies of applicable State statutes and regulations, and a 
Memorandum of Agreement (MOA) to be executed by the Regional 
Administrator of EPA Region 6 and the Executive Director of TNRCC. 
Supplements to the State application were received by EPA Region 6 on 
February 12, March 16, April 15, and May 4, 1998. EPA Region 6 
determined that Texas' February 5, 1998, approval request, supplemented 
by this additional information, constituted a complete package under 40 
CFR 123.21, and a letter of completeness was sent to the Chairman of 
the TNRCC on May 7, 1998.
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    \1\ Major category partial permit program approval is provided 
for under section 402(n)(3) of the CWA. Pursuant to that section, 
EPA may approve a partial permit program covering a major category 
of discharges if the program represents a complete permit program 
and covers all of the discharges under the jurisdiction of the 
agency seeking approval, and if EPA determines the program 
represents a significant and identifiable part of the State program 
required by section 402(b) of the Act. As discussed below under 
``Scope of the Partial Program,'' TNRCC seeks permitting authority 
for all facilities that have discharges within its jurisdiction. 
However, TNRCC does not have jurisdiction over all discharges within 
the State of Texas. A small portion of the State's discharges fall 
under the jurisdiction of the Texas Railroad Commission.
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    EPA is required to approve the submitted program within 90 days of 
submission of the complete information unless it does not meet the 
requirements of section 402(b) of the Act and EPA regulations, or EPA 
and TNRCC jointly agree to extend this deadline. (See 40 CFR 
123.21(d)). To obtain such approval, the State must show, among other 
things, that it has authority to issue permits which comply with the 
Act, authority to impose civil and criminal penalties for permit 
violations, and authority to ensure that the public is given notice and 
opportunity for a hearing on each proposed permit. After close of the 
comment period and completion of the required consultations with other 
federal agencies, the Regional Administrator for EPA Region 6 will make 
a decision to approve or disapprove the TPDES program for 
implementation by the State.
    EPA's final decision to approve or disapprove the TPDES program 
will be based on the requirements of section 402 of the CWA and 40 CFR 
part 123. EPA is also required by the Endangered Species Act (ESA), the 
National Historic Preservation Act and the Coastal Zone

[[Page 33658]]

Management Act, to consult with other federal agencies before making a 
final decision in this matter. For example, the ESA requires federal 
agencies to consult with the U.S. Fish and Wildlife Service and the 
National Marine Fisheries Service on the effects of federal actions 
(including NPDES state program approvals) on endangered species. 
Section 7(a)(2) of the ESA places a statutory requirement (separate and 
distinct from CWA Sec. 402(b)) for EPA to ``* * * insure that any 
action authorized, funded or carried out * * * is not likely to 
jeopardize the continued existence of any endangered species or 
threatened species or result in the destruction or adverse modification 
of habitat * * * determined to be critical * * * '' EPA Region 6 
initiated formal consultation under section 7 of the ESA on January 29, 
1998. EPA's responsibilities under ESA, as well as under the National 
Historic Preservation Act and the Coastal Zone Management Act are 
discussed in more detail later in this notice. Under federal law, EPA 
may not make a final decision on TPDES program approval until 
consultation under these acts are completed, and it may be necessary to 
seek TNRCC's agreement on an extension of the 90 day approval deadline.
    If EPA approves the Texas partial program, the Regional 
Administrator will so notify the State and will sign the proposed MOA. 
Notice will be published in the Federal Register and, as of the date of 
program approval, EPA will transfer to the TNRCC NPDES permitting 
authority and primary enforcement responsibility for those discharges 
subject to the TPDES program, with certain exceptions, which are 
discussed below under Scope, Transfer of NPDES Authority, and Summary 
of the TPDES Permitting Program. If EPA's Regional Administrator 
disapproves the TPDES program, the TNRCC will be notified of the 
reasons for disapproval and of any revisions or modifications to the 
program which are necessary to obtain approval.

Public Hearing Procedures

    The following procedures will be used at the public hearing:
    1. The Presiding Officer shall conduct the hearing in a manner 
which will allow all interested persons wishing to make oral statements 
an opportunity to do so; however, the Presiding Officer may inform 
attendees of any time limits during the opening statement of the 
hearing.
    2. Any person may submit written statements or documents for the 
record.
    3. The Presiding Officer may, in his discretion, exclude oral 
testimony if such testimony is overly repetitious of previous testimony 
or is not relevant to the decision to approve or require revision of 
the submitted State program.
    4. The transcript taken at the hearing, together with copies of all 
submitted statements and documents, shall become a part of the record 
submitted to the Regional Administrator.
    5. The hearing record shall be left open until the deadline for 
receipt of comments specified at the beginning of this Notice to allow 
any person time to submit additional written statement or to present 
views or evidence tending to rebut testimony presented at the public 
hearing.
    6. Hearing statements may be oral or written. Written copies of 
oral statements are urged for accuracy of the record and for use of the 
Hearing Panel and other interested persons. Persons wishing to make 
oral testimony supporting their written comments are encouraged to 
summarize their points rather than reading lengthy written comments 
verbatim into the record. All comments received by EPA Region 6 by the 
deadline for receipt of comments, or presented at the public hearing, 
will be considered by EPA before taking final action on the Texas 
request for NPDES program approval.

Scope, Transfer of NPDES Authority, and Summary of the TPDES 
Permitting Program

A. Scope of the Partial Program

    The proposed TPDES program is a partial program which conforms to 
the requirements of section 402(n)(3) of the CWA. TNRCC's application 
for program approval applies to all discharges covered by the authority 
of that agency. This includes most discharges of pollutants subject to 
the federal NPDES program (e.g. municipal wastewater and storm water 
point source discharges, pretreatment, most industrial wastewater and 
storm water point source discharges, and point source discharges from 
federal facilities), including the disposal of sewage sludge (in 
accordance with section 405 of the Act and 40 CFR part 503).
    The TNRCC has authority to regulate discharges from industrial 
facilities covered by all Standard Industrial Classification (SIC) 
codes except for those facilities classified as 1311, 1321, 1381, 1382, 
1389, 4922, and 4925, which are regulated by the Texas Railroad 
Commission. Some activities at facilities within these SIC codes are 
regulated by the TNRCC, and a list of the ten facilities currently 
affected is included in Appendix 2-A of the TPDES application. EPA will 
retain NPDES permitting authority and primary responsibility for 
enforcement over all discharges not under the jurisdiction of TNRCC and 
therefore not subject to the TPDES program, including those within the 
jurisdiction of the Texas Railroad Commission. The TNRCC has authority 
to regulate discharges of storm water associated with industrial 
activity and discharges of storm water from municipal separate storm 
sewer systems, except at facilities regulated by the Texas Railroad 
Commission (see above). The TNRCC has primary responsibility for 
implementing a Pretreatment Program and a Sewage Sludge Program. The 
TNRCC has authority to regulate discharges from publicly owned and 
privately owned treatment works and for discharges from concentrated 
animal feeding operations (CAFOs) within the TNRCC's jurisdiction.
    EPA would retain permitting authority and primary enforcement 
responsibility over discharges from CAFOs not subject to TNRCC 
jurisdiction. Pursuant to state statute, CAFOs authorized by TNRCC to 
use, and that have actually used, a playa lake that does not feed into 
any other surface water in the state as a wastewater retention facility 
before July 10, 1991 (the effective date of TNRCC's adoption of related 
revisions to the Texas Surface Water Quality Standards, 30 TAC Chapter 
307) are not subject to water quality standards or other requirements 
for discharges to waters in the state. These discharges, however, if to 
waters of the United States, are subject to federal CWA requirements. 
Because TNRCC would not have jurisdiction under the TPDES program to 
require compliance with water quality standards for these discharges, 
EPA would retain permitting authority and primary enforcement 
responsibility over discharges into playa lakes that are waters of the 
United States by CAFOs that received authorization to discharge and 
commenced operation prior to July 10, 1991, and that are therefore not 
subject to TNRCC jurisdiction.
    TNRCC does not have, and is not seeking, the authority to regulate 
discharges in Indian Country (as defined in 18 U.S.C. 1151). EPA will 
retain NPDES permitting authority and primary enforcement 
responsibility over Indian Country in Texas.

B. Transfer of NPDES Authority and Pending Actions

    Upon approval of the TPDES program, authority for all NPDES 
permitting activities, as well as primary

[[Page 33659]]

responsibility for NPDES enforcement activities, within the scope of 
TNRCC's jurisdiction, would be transferred to the State, with some 
exceptions. These exceptions would be agreed to by EPA and the State 
under the MOA that would be signed upon program approval, and are 
explained below. In addition to the exceptions listed below, EPA would 
retain on a permanent basis its authority under section 402(d) of the 
CWA to object to TPDES permits proposed by TNRCC, and if the objections 
are not resolved, to issue federal NPDES permits for those discharges. 
EPA would also retain on a permanent basis its authority under sections 
402(I) and 309 of the CWA to file federal enforcement actions in those 
instances in which it determines the State has not taken timely or 
appropriate enforcement action.
1. Permits Already Issued by EPA
    40 CFR 123.1(d)(1) provides that EPA retains jurisdiction over any 
permit that it has issued unless the State and EPA have reached 
agreement in the MOA for the State to assume responsibility for that 
permit. The proposed MOA between EPA and the TNRCC provides that the 
TNRCC would assume at the time of program approval permitting authority 
and primary enforcement responsibility over all NPDES permits issued by 
EPA prior to program approval, with the following exceptions:
    a. Jurisdiction over those discharges covered by permits already 
issued by EPA, but for which variances or evidentiary hearings have 
been requested prior to TPDES program approval. Jurisdiction over these 
discharges, including primary enforcement responsibility (except as 
provided by paragraph 3 below--Facilities With Outstanding Compliance 
Issues), would be transferred to the State once the variance or 
evidentiary hearing request has been resolved and a final effective 
permit has been issued.
    b. Jurisdiction over all existing discharges of storm water 
associated with industrial or construction activity (40 CFR 
122.26(b)(14)), including allowable non-storm water, authorized to 
discharge as of the date of program approval under one of the NPDES 
storm water general permits issued by EPA prior to approval of the 
TPDES program. The storm water general permits affected are: Baseline 
Construction storm water general permit (57 FR 41209), NPDES permit 
numbers TXR10*###; Baseline Non-construction storm water general permit 
(57 FR 41297), NPDES permit numbers TXR00*###; and Multi-sector storm 
water general permit (60 FR 51108), NPDES permit numbers TXR05*###. 
(For an individual facility's permit number, the * is a letter and the 
#'s are numbers--e.g. TXR00Z999). Jurisdiction over these storm water 
discharges, including primary enforcement responsibility (except as 
provided by paragraph 3 below--Facilities With Outstanding Compliance 
Issues), would be transferred to TNRCC at the earlier of the time the 
EPA-issued general permit expires or TNRCC issues a replacement TPDES 
permit, whether general or individual.

    Note: EPA Region 6 is in the process of modifying the Multi-
sector storm water general permit and this action is expected to be 
completed prior to the time a final decision on TPDES program 
approval is made. However, because permit modification does not 
trigger the transfer of permit jurisdiction under this section, the 
Multi-sector storm water general permit would remain under EPA's 
jurisdiction until it expires or is replaced by a TNRCC permit 
regardless of whether it is modified prior to program approval.

    In addition, EPA Region 6 is in the process of reissuing the 
Baseline Construction storm water general permit. This action is also 
expected to be completed prior to a final decision on program approval. 
If the Baseline Construction storm water general permit is reissued 
prior to program approval, the permit would temporarily remain under 
EPA jurisdiction pursuant to this section. However, even if the permit 
is not reissued prior to program approval, EPA would temporarily retain 
jurisdiction over the permit under paragraph 2 below (Permits Proposed 
for Public Comment but Not Yet Final). The Baseline construction storm 
water general permit was proposed for public comment by EPA on June 2, 
1997, and has not yet been finalized.
    c. Jurisdiction over new discharges of storm water associated with 
industrial or construction activity, including allowable non-storm 
water, eligible for coverage under one of the NPDES storm water general 
permits issued by EPA prior to TPDES approval and listed above. 
Facilities eligible for but not currently covered by one of these 
general permits would continue to apply to EPA for coverage. 
Jurisdiction over these storm water discharges, including primary 
enforcement responsibility (except as provided by paragraph 3 below--
Facilities With Outstanding Compliance Issues), would be transferred to 
TNRCC at the earlier of the time the EPA-issued general permit expires 
or TNRCC issues a replacement TPDES permit, whether general or 
individual.
    Except as provided in paragraphs 2 and 3 below, EPA would not 
retain, even on a temporary basis, jurisdiction over discharges from 
individual storm water permits; storm water outfalls in waste water 
permits; and storm water discharges designated by the State in 
accordance with 40 CFR 123.26(g)(1)(I). The State would have 
jurisdiction and permitting authority, including primary enforcement 
responsibility, over these discharges immediately upon TPDES program 
approval.
    d. Jurisdiction over all discharges covered by large and medium 
Municipal Separate Storm Sewer System (MS4) permits issued by EPA prior 
to TPDES program approval. Jurisdiction over EPA-issued MS4 permits, 
including primary enforcement responsibility (except as provided by 
paragraph 3 below--Facilities With Outstanding Compliance Issues), 
would be transferred to TNRCC at the earlier of the time the EPA-issued 
permit expires or TNRCC issues a renewed, amended or replacement TPDES 
permit.
2. Permits Proposed for Public Comment but Not Yet Final
    EPA would temporarily retain NPDES permitting authority, as well as 
primary enforcement responsibility (except as provided by paragraph 3 
below--Facilities With Outstanding Compliance Issues), over all 
discharges covered by general or individual NPDES permits that have 
been proposed for public comment by EPA but have not been issued as 
final at the time of program approval. Although section 402(c)(1) of 
the Act establishes a 90 day deadline for EPA approval or disapproval 
of a proposed State program and, if the program is approved, for the 
transfer of permit issuing authority over those discharges subject to 
the program from EPA to the State, this provision was intended to 
benefit States seeking NPDES program approval. As a result, and in the 
interest of an orderly and smooth transition from federal to State 
regulation, the time frame for transfer of permitting authority may be 
extended by agreement of EPA and the State. See, for example, 40 CFR 
123.21(d), which allows a State and EPA to extend by agreement the 
period of time allotted for formal EPA review of a proposed State 
program. In order to render programmatic transition more efficient and 
less confusing for permit applicants and the public, the State of Texas 
and EPA have agreed to enter into an MOA that extends the time frame 
for transfer of permit issuing authority over those permits that EPA 
has already proposed for public comment, but which are not yet final at 
the time of program

[[Page 33660]]

approval. Permitting authority and primary enforcement responsibility 
would be transferred to the State as the permits are finalized.
3. Facilities With Outstanding Compliance Issues
    EPA would temporarily retain primary NPDES enforcement 
responsibility for those facilities which have any outstanding 
compliance issues. EPA would retain jurisdiction of these facilities 
until resolution of these issues is accomplished in cooperation with 
the State. Files retained by EPA for the reasons given above would be 
transferred to the State as the actions are finalized. Facilities would 
be notified of this retained jurisdiction and again when the file is 
transferred to the State. Permitting authority over these facilities 
would transfer to the State at the time of program approval.
    A list of existing Permittees that would temporarily remain under 
EPA permitting jurisdiction/authority is included as part of the public 
record and available for review. Texas would continue to provide State-
only permits for those dischargers over which EPA temporarily retains 
permitting authority, and which need State authorization to discharge.

C. Summary of the Application Documents

    The TPDES program is fully described in documents the State has 
submitted in accordance with 40 CFR 123.21, i.e., a letter from the 
Governor requesting program approval; a Memorandum of Agreement (MOA) 
for execution by TNRCC and EPA; a Program Description, including an 
Enforcement Management System, outlining the procedures, personnel and 
protocols that would be relied on to run the State's permitting and 
enforcement programs; and a Statement signed by the Attorney General 
that describes the legal authority which the State has to administer a 
program equivalent to the federal NPDES program. The State's TPDES 
application consists of a letter from the Governor of Texas, enclosing 
eight chapters and associated appendices. The content of those 
documents is summarized below.
1. A Letter from the Governor
    Texas' application for program approval includes a letter dated 
February 5, 1998, from Governor George W. Bush, officially requesting 
NPDES program approval.
2. The EPA/TNRCC MOA (Chapter 1)
    The requirements for MOAs are found in 40 CFR 123.24. A Memorandum 
of Agreement is a document signed by each agency, committing them to 
specific responsibilities relevant to the administration and 
enforcement of the State's regulatory program. A MOA specifies these 
responsibilities and provides structure for the State's program 
management and EPA's program oversight.
    The MOA submitted by the State of Texas has been signed by Dan 
Pearson, Executive Director of the Texas Natural Resource Conservation 
Commission. The Regional Administrator of U.S. EPA Region 6 would sign 
the document only if the program has been determined approvable after 
all comments received during the comment period (including comments 
received at the public hearing) have been considered. The MOA submitted 
by TNRCC includes the following items:
    Section I--General: This section contains general statements 
describing the purpose of the MOA.
    Section II--Scope of Authorization: This section contains the 
statement of the scope of the NPDES program (pretreatment, storm water, 
sewage sludge disposal programs) TNRCC would be administering.
    Section III--State and Federal Responsibilities: Lists the 
responsibilities of TNRCC and EPA in maintaining an effective program. 
Also outlines the procedures for transfer of authority over discharges 
over which EPA would be temporarily retaining authority and gives 
timing for the transition.
    Section IV--Permit Processing, Review and Issuance: describes all 
agreements on the review and issuance of TPDES permits. It covers 
TNRCC's responsibilities to issue permits, the transfer of EPA files to 
the State, and the State's application review and permit development 
process. Included are such things as procedures for permit modification 
or reissuance, and EPA's review of TPDES drafted individual and general 
permits. This section includes the State's commitment for responding to 
public concerns and providing public participation in connection with 
public hearings, evidentiary hearings, and administrative and judicial 
enforcement actions.
    Section V--Compliance Monitoring and Permit Enforcement: Describes 
summary agreements between EPA and TNRCC regarding EPA oversight of the 
TPDES enforcement program. These include those commitments on TNRCC's 
compliance monitoring, reviews, pretreatment audits, and inspections.
    Section VI--Pretreatment Program: Describes summary agreements 
between EPA and TNRCC regarding EPA oversight of TPDES's implementation 
of the industrial pretreatment program regulating industrial users of 
municipal wastewater treatment plants.
    Section VII--Sludge Management Program: Describes summary 
agreements between EPA and TNRCC regarding EPA oversight of TPDES's 
regulation of the disposal of biosolids (sewage sludge) generated by 
wastewater treatment systems.
    Section VIII--Transmittal of Information: This section describes 
how reports and requests for information would be handled; and how 
information is transferred between the two agencies.
    Section IX--TPDES Program Review by EPA: Explains how EPA would 
periodically review the TPDES program for implementation and continued 
consistency with Clean Water Act requirements.
    Section X--Amendments To Be Approved by EPA: This section describes 
procedures to insure that EPA is given an opportunity to review any 
proposed amendment, recision or repeal of any State statute or 
regulation that could affect the continued viability of the TPDES 
program.
    Section XI--Approval, Effective Date And Term Of the MOA: Describes 
how the MOA can be modified by EPA and TNRCC. Also establishes a 
commitment to review the MOA within five years and make any necessary 
changes. The MOA would become effective on the date of program 
approval.
3. Program Description (Chapters 2-7)
    A program description submitted by a State seeking program approval 
must meet the minimum requirements of 40 CFR 123.22. It must provide a 
narrative description of the scope, structure, coverage and processes 
of the State program; a description of the organization, staffing and 
position descriptions for the lead State agency; and itemized costs and 
funding sources for the program for the first two years after program 
approval. It must describe all applicable State procedures (including 
administrative procedures for the issuance of permits and 
administrative or judicial procedures for their review) and include 
copies of forms used in the program. It must further contain a complete 
description of the State's compliance and enforcement tracking program. 
The program description submitted by TNRCC includes the following 
items:
    Chapter 2--Overview of the TNRCC: This chapter gives an overview of 
the history, authority, and organization of the TNRCC.
    Chapter 3--Permitting Program Description: Describes how TNRCC 
staff

[[Page 33661]]

would develop effluent limitations; the permitting process, including 
procedures for public participation in decision making process; and the 
process for determining the Total Maximum Daily Load a surface water 
can assimilate and still support its designated beneficial uses (e.g., 
swimming, fishing, public water supply, etc.).
    The Continuing Planning Process (CPP) and its associated 
Implementation Procedures (IP) used by the TNRCC to develop and 
implement water quality standards and assess the condition of surface 
waters of the State are found in two appendixes to Chapter 3 (Appendix 
3-C: ``TNRCC Continuing Planning Process'' and Appendix 3-D: 
``Implementation of the TNRCC Standards Via Permitting''). Portions of 
the CPP and IP previously approved by EPA when TNRCC was not proposed 
to be the NPDES permitting authority would be superseded by agreements 
found in the section IV.B. of the proposed MOA between TNRCC and EPA. 
The issues addressed by these superseding agreements include: 
suspension of the use of biological surveys in the Implementation 
Procedures; determining cessation of lethality in biomonitoring; use of 
alternate test species for biomonitoring; calculation of Dioxin/Furan 
permit limits; development of water quality-based effluent limitations 
for discharges into the Rio Grande; ensuring all final limitations in a 
TPDES permit would be consistent with the EPA-approved Water Quality 
Management Plan (including any applicable Total Maximum Daily Loads); 
ensuring variance from water quality standards would not be used to 
establish an effluent limitation for a TPDES permit until the standards 
variance has been reviewed and approved by EPA; and ensuring 
appropriate limitations would be included in general permits to ensure 
compliance with water quality requirements. Texas has committed to 
incorporating the MOA agreements into the CPP and IP during the next 
update to the CPP and IP. Taken together, these three documents 
constitute the CPP required under 40 CFR 130.5(c) for the 
Administrator's approval of a state program.
    Chapter 4--Pretreatment Program Description: This chapter gives the 
authority for the TNRCC pretreatment program; and the components of the 
program such as, the establishment of limits for indirect users, 
fundamentally different factors, categorical determination requests, 
reporting requirements, inspections and enforcement.
    Chapter 5--Sewage Sludge Program Description: This Chapter gives a 
brief description of the TNRCC sewage sludge program, its history, and 
statutory framework. It describes sludge permits and reports required.
    Chapter 6--Enforcement Program Description: This chapter gives the 
legal authority for TNRCC enforcement actions, outlines TNRCC policies 
related to compliance and enforcement and provides a description of 
State enforcement actions. It also gives a brief overview of compliance 
review activities for inspections, Discharge Monitoring Reports and 
other required reports to be submitted by the permittee, and describes 
the Permits Compliance System and the types of data tracked by it.
    States seeking approval of their permitting and enforcement program 
under NPDES have the option of adopting EPA's enforcement policies, 
procedures, and guidance; or providing in their program package a 
complete description of their own enforcement authority and compliance 
evaluation program (40 CFR 123.26 and 123.27). Texas submitted its own 
enforcement management system (EMS) (Appendices 6-A through 6-G). An 
EMS outlines the way the State systematically and efficiently 
identifies instances of noncompliance and provides timely and 
appropriate enforcement actions to achieve the final objective of full 
compliance by the permittee with the Clean Water Act. An EPA memo dated 
October 2, 1989, titled ``Final Version of the Revised Enforcement 
Management System,'' describes seven basic principles that are common 
to an effective EMS:

--Maintain a source inventory that is complete and accurate;
--Handle and assess the flow of information available in a systematic 
and timely basis;
--Accomplish a pre-enforcement screening by reviewing the flow of 
information as soon as possible after it is received;
--Perform a more formal enforcement evaluation where appropriate, using 
systematic evaluation screening criteria;
--Institute a formal enforcement action and follow-up whenever 
necessary;
--Initiate field investigations based on a systematic plan; and
--Use internal management controls to provide adequate enforcement 
information to all levels of organization.

    The TNRCC's Enforcement Management System (EMS) is a written 
outline or guide which discusses the procedures that would be followed 
to ensure that both federal and State regulatory requirements and goals 
are accomplished in a timely and appropriate manner. For the purpose of 
review, EPA considers the TNRCC EMS to consist of the seven appendices 
to Chapter 6.
    The inspection and enforcement functions of the TNRCC reside in the 
Field Operations Division, Compliance Support Division, and Enforcement 
Division of the Office of Compliance & Enforcement. The Field 
Operations Division, with 16 regional offices across the State, is 
responsible for inspecting all permitted and unpermitted facilities 
which have or are believed to have a surface water discharge and is 
primarily responsible for the investigation and resolution of all 
citizen complaints involving waters of the State. The Compliance 
Support Division provides agency sponsored or administered training 
courses and technical assistance aimed at development of environmental 
expertise by agency staff and those regulated by the TNRCC. The 
Enforcement Division, in coordination with the Field Operations 
Division, is responsible for addressing non-compliance with the 
agency's regulations through enforcement actions.
    The TNRCC has not adopted EPA's civil penalty policy, but uses 
their own policy to assess and collect administrative penalties. The 
penalty policy is discussed in detail in Appendix VI.
    Chapter 7--Program Cost and Funding: This chapter gives a budget 
summary on the projected costs and funding sources for the TPDES 
program for the first two years after program approval.
4. Attorney General's Statement (Chapter 8)
    An Attorney General's Statement is required and described in 
regulations found at 40 CFR 123.23. The State Attorney General must 
certify that the State has lawfully adopted statutes and regulations 
which provide the State agency with the legal authority to administer a 
permitting program in compliance with 40 CFR part 123. The Texas 
Attorney General's Statement describes and cites State legal authority 
it believes adequate to administer the TPDES program; and certifies 
that the State has the legal authority to administer the TPDES program 
in accordance with the regulations in 40 CFR part 123. Chapter 8 
entitled ``Authority for the Texas National Pollutant Discharge 
Elimination System Program,'' which was submitted by the

[[Page 33662]]

State of Texas on February 5, 1998, and the supplemental March 16, 
1998, letter from Texas Attorney General Dan Morales to Acting EPA 
Region 6 Regional Administrator Jerry Clifford, taken together, 
constitute the Attorney General's Statement required by section 402(b) 
of the CWA and 40 CFR 123.23 for purposes of the State's TPDES 
application. All references to the ``Attorney General's Statement'' or 
``statement of legal authority'' made in this document refer to the 
combination of these two documents.

Public Comment on the Described Program

    The program submitted by the State of Texas has been determined by 
EPA to be complete in accordance with the regulations found at 40 CFR 
part 123. EPA and TNRCC want the citizens of Texas to understand the 
proposed TPDES program and encourage public participation in the 
decision making process. Therefore, EPA requests that the public review 
the program that TNRCC has submitted and provide any comments they feel 
are appropriate. EPA will consider all comments on the TPDES program 
and/or its approval in its decision.
    EPA is specifically seeking public input on the following aspects 
of the proposed TPDES program:

Public Participation

    In discussions with the State of Texas over the last couple of 
years concerning the possibility of federal approval of a Texas NPDES 
program, EPA expressed various concerns regarding the opportunity for 
public participation in the State permitting and enforcement processes. 
For example, EPA raised concerns that notice and opportunity for 
comment should be provided on proposed settlements of administrative 
enforcement actions; that Texas notices should notify the public that 
it may request a hearing on permit applications and that a hearing 
would be granted if there was a significant degree of public interest; 
that Texas should provide for permissive intervention in administrative 
penalty actions; and over restrictions placed by the State on the 
participation of citizens in formal evidentiary contested case hearings 
and the implications of those restrictions on the ability of citizens 
to establish standing to obtain judicial review of permits. In response 
to these discussions, the State of Texas has implemented various 
regulatory and statutory changes to enhance the opportunity for public 
participation under the State program, and the Texas Attorney General 
has stated that the law governing individual standing in Texas judicial 
proceedings is substantially equivalent to current requirements for 
standing under federal law. Through these statutory and regulatory 
changes and the Texas Attorney General's statement, Texas has worked to 
address EPA's concerns in this area. The results of the various 
discussions between EPA and TNRCC regarding public participation issues 
are reflected in an exchange of letters between TNRCC Commissioner 
Barry McBee and Acting Region 6 Regional Administrator Jerry Clifford 
dated June 16, 1997 (McBee to Clifford), June 19, 1997 (Jerry Clifford 
to Barry McBee) and November 25, 1997 (Barry McBee to Jerry Clifford). 
These three letters are included as part of the official record for 
this matter.2
---------------------------------------------------------------------------

    \2\ Also included in the record and of interest on this issue is 
an exchange of letters between Mr. Richard Lowerre of Henry, 
Lowerre, Johnson, Hess, & Frederick and the TNRCC dated November 19, 
1997 (Lowerre to TNRCC Chairman Barry McBee) and January 6, 1998 
(Jim Phillips, Deputy Director of the Office of Legal Services, 
TNRCC to Lowerre).
---------------------------------------------------------------------------

Texas' Regulatory Flexibility Under Texas Water Code 5.123

    The Texas Legislature added section 5.123 to the Texas Water Code 
in 1997 (implementing Senate Bill 1591). This section gives the TNRCC 
flexibility to exempt from State statutory or regulatory requirements 
an applicant proposing an alternative method or alternative standard to 
control or abate pollution. EPA raised questions concerning the effect 
of the statute on TNRCC's obligations under the TPDES program. In 
response, the Texas Attorney General stated that Texas Water Code 5.123 
does not subtract from the TNRCC's authority required as a condition of 
program approval under the CWA or EPA regulations since the statute 
does not authorize the TNRCC to grant an exemption that is inconsistent 
with the environmental requirements of any federally approved program. 
In a letter from TNRCC Commissioner Ralph Marquez to Acting Region 6 
Regional Administrator Jerry Clifford dated March 16, 1998, 
Commissioner Marquez clarified TNRCC's position that section 5.123 does 
not authorize TNRCC to grant permits that vary from applicable federal 
requirements. To further clarify this position, Commissioner Marquez 
committed to include the following language in the proposed MOA between 
EPA and the TNRCC:

    The regulatory flexibility authority in Senate Bill 1591 will 
not be used by TNRCC to approve an application to vary a federal 
requirement or a State requirement which implements a federal 
program requirement under Sec. 402(b) of the Clean Water Act, EPA 
regulations implementing that Section, or this MOA, including but 
not limited to inspection, monitoring or information collection 
requirements that are required under Sec. 402(b) of the Clean Water 
Act, EPA regulations implementing that Section or this MOA to carry 
out implementation of the approved federal program.

This language is included on page 8 of the proposed MOA.

Texas' Defense to Liability for Acts of God, War, Strike, Riot, or 
Other Catastrophe

    Section 7.251 of the Texas Water Code provides that if an event 
that would otherwise be a violation of a statute, rule, order or permit 
was caused solely by an act of God, war, strike, riot, or other 
catastrophe, the event is not a violation of that statute, rule, order, 
or permit. This statute and its effect on the TPDES program are 
discussed in detail in the Attorney General's Statement provided by the 
State of Texas as part of its application. However, EPA wishes to also 
clarify its understanding of this statute and its role in the federally 
authorized program.
    It is important to first note that section 7.251 of the Texas Water 
Code creates a defense to liability not provided for under the federal 
CWA. Should EPA authorize the TPDES program, EPA would still retain its 
authority to bring enforcement actions for violations of the Act, and 
this authority would not be affected by section 7.251. Both EPA and the 
courts have consistently interpreted the CWA as a strict liability 
statute. The only defense to liability recognized under federal law is 
the federal upset defense found at 40 CFR 122.41(n), which is a very 
narrow affirmative defense for violations of technology-based effluent 
limitations. Although both Texas Water Code section 7.251 and 40 CFR 
122.41(n) provide for affirmative defenses that must be pled and proven 
by the asserting party, the defenses are not analogous.
    The Attorney General's Statement provided by the State of Texas 
acknowledges that the defenses are not analogous. However, in his 
effort to clarify the scope of the State statute, the Attorney General 
compares section 7.251 to ``a federal defense that CWA Sec. 301(a) only 
applies to any person causing an unauthorized discharge.'' It is EPA's 
belief that no such federal defense exists. EPA has consistently taken 
the position, which it believes is supported by available case law, 
that any unauthorized discharge of pollutants is unlawful regardless of 
the cause, and that a facility owner or operator is responsible for any 
unlawful

[[Page 33663]]

discharge occurring at his facility. Therefore, although Texas Water 
Code section 7.251 creates an affirmative defense to liability for 
actions brought by Texas under State law, section 7.251 is not a 
defense to enforcement actions brought by EPA pursuant to the federal 
CWA.
    As interpreted by the Texas Attorney General, section 7.251 
provides an affirmative defense to unauthorized discharges under State 
law only if the event causing the discharge is completely outside the 
control of the person otherwise responsible for the discharge and only 
if the discharge could not have been avoided by the exercise of due 
care, foresight, or proper planning, maintenance or operation. Section 
7.251 does not shield a party from liability if that party's action or 
inaction contributed to the violation. Based on this interpretation, it 
is EPA's understanding that if a facility owner or operator could have 
reasonably anticipated a discharge, and could have taken steps to 
prevent it by care and foresight, proper planning, or maintenance, then 
the affirmative defense is unavailable. For example, if a heavy 
rainfall, a strike, or a riot is reasonably foreseeable, or the 
facility is not designed, operated, or maintained properly, then any 
discharge resulting from such an event would not be solely caused by 
the event, and the facility owner or operator would be unable to claim 
the defense for such a discharge.
    The Attorney General also states that section 7.251 would not 
preclude the imposition of penalties for a violation that persists 
after the original force majeure event ceases to be the sole cause of a 
discharge, whether the persisting violation was a continuing discharge 
or a failure to comply with a rule, order, or permit requirements. EPA 
understands this to mean that even if a discharge at a facility were 
initially caused by an act of God, and the facility owner or operator 
in no way contributed to the discharge, either through his action or 
inaction, if the facility owner or operator could have taken steps to 
stop the discharge from continuing, but failed to do so, the facility 
operator would be liable for the continuing discharge.
    As discussed in the Attorney General's Statement, the main impact 
of section 7.251 is to insulate a party from penalties; the statute's 
effect on the TNRCC's injunctive authority is minimal in that it does 
not affect a court's authority to issue an injunction to enforce any 
Code requirement or prohibition, including the requirement that a party 
comply with any permit, rule or order issued by the TNRCC. EPA 
understands the Texas Attorney General's statement to conclude that the 
TNRCC can enjoin by suit in State court any violation or threat of 
violation of a statute, rule or permit under the TPDES program. Based 
on this understanding, TNRCC appears to have injunctive authority 
equivalent to EPA's authority under federal law despite the existence 
of section 7.251.
    In regard to the insulation of parties from penalties under section 
7.251, EPA would rarely seek penalties for violations of the Act that 
were completely beyond the control of a party, and in regard to which 
that party had exercised due care, foresight, proper planning and 
maintenance.
    Therefore, based on the Texas Attorney General's Statement and 
EPA's understanding of TNRCC's broad injunctive authority, the statute 
does not appear to prevent TNRCC from demonstrating adequate authority 
to meet its obligations under section 402(b) of the CWA.

Inspections

    The federal regulations (40 CFR 123.26(e)(5)) require State NPDES 
compliance evaluation programs to have the procedures and ability for 
inspecting the facilities of all major dischargers and all Class I 
sludge facilities where applicable at least annually. In the proposed 
MOA between EPA and the TNRCC, the TNRCC states that it has the 
procedures and ability for inspecting the facilities of all major 
dischargers and all Class I sludge facilities where applicable at least 
annually, and that it will inspect 100% of the majors and Class I 
sludge facilities on an annual basis, or a universe of majors/minors 
agreed upon annually by EPA and the TNRCC. The agreement to allow TNRCC 
to substitute the inspection of a mutually agreed-upon universe of 
majors/minors for inspection of 100% of the majors and Class I sludge 
facilities is based on EPA's and TNRCC's commitment to a process for 
targeting inspections according to the priorities established by TNRCC 
to protect the waters of Texas. Under the terms of the proposed MOA, 
the TNRCC will develop an annual inspection plan that establishes 
priorities, lists the major and minor dischargers to be inspected, and 
demonstrates that the plan is substantially equivalent to the annual 
inspection of all major dischargers and Class I sludge management 
facilities where applicable. The TNRCC will have to inspect majors at 
some regular interval while expending resources on minors equivalent to 
100% of the majors annually. The TNRCC will also have to demonstrate 
water quality improvement as a result of the trade-off. Under the 
proposed MOA, if EPA and the TNRCC are unable to reach agreement on the 
universe of majors/minors to be inspected under the annual inspection 
plan by the beginning of the following fiscal year, TNRCC agrees to 
inspect 100% of the majors and all Class I sludge management facilities 
where applicable.

Timely and Appropriate Enforcement

    Section 402(b) of the Act requires that a State have adequate 
authority to abate violations of the permit or the permit program. 
Because the ability to take timely and appropriate enforcement action 
is fundamental to an adequate enforcement program, EPA's Oversight 
Guidance states that by the time a facility appears on the second 
Quarterly Noncompliance Report, a formal enforcement action should have 
been taken. Chapter 6 of Texas' application (Enforcement Program 
Description) outlines the time frames for TNRCC issuance of enforcement 
actions. The average time for TNRCC enforcement action issuance is 255 
days. As a result, in implementing the TPDES program, TNRCC would not 
in all cases be able to meet the timely and appropriate criteria 
contained in EPA's Oversight Guidance. In cases where TNRCC cannot meet 
this criteria, TNRCC has agreed in the proposed MOA to notify EPA 45 
days prior to a facility appearing on the Exception List. EPA will then 
initiate formal enforcement action in order to ensure that the 
violations are addressed in a timely and appropriate manner.

Penalty Policy

    The TNRCC proposes to use its own Penalty Policy in administering 
the TPDES program, and the TNRCC policy differs in some respects from 
the EPA penalty policy. It is EPA policy that penalties generally 
should, at a minimum, collect the economic benefit accruing to the 
violator as a result of violating the law. EPA's policy also states 
that every effort should be made to calculate and recover an additional 
amount, over and above economic benefit, to ensure that the violator 
does not gain economically by violating the law. (EPA's February 1984 
``Policy on Civil Penalties'' (#GM-21) as implemented in EPA's March 1, 
1995 ``Interim CWA Settlement Penalty Policy''). TNRCC's policy will 
not ensure that economic benefit will be collected, at a minimum, in 
all cases, and TNRCC's policy allows for mitigation of penalties to 
zero in some instances. Neither the CWA nor 40 CFR part 123 require a 
State seeking NPDES

[[Page 33664]]

authority to adopt EPA's penalty policy verbatim. However, 402(b) of 
the Act and 40 CFR 123.27 require that States have enforcement 
authority, including civil and criminal penalties, adequate to abate 
violations of a permit or the permit program. If the TPDES program were 
approved, EPA would be required to over-file in certain instances in 
order to ensure consistency with the Federal penalty policy that no 
party be allowed to garner an unfair economic advantage through 
avoiding the cost of compliance with environmental protection 
requirements. Any penalties collected by EPA go to the federal, not the 
State, treasury.

Applicability of Water-Quality Based Limits in the Absence of 
Technology-Based Effluent Guidelines

    In a brief filed February 12, 1998, in the U.S. Court of Appeals 
for the Fifth Circuit on behalf of the State of Texas and the Texas 
Railroad Commission in Texas Mid-Continental Oil & Gas Association v. 
EPA (No. 97-60042 and Consolidated Cases), the Texas Attorney General 
took the position that EPA did not have the authority to include water 
quality-based effluent limitations in an NPDES permit unless 
technology-based effluent guidelines had been developed. EPA vigorously 
disagrees with this position and continues to maintain that under the 
CWA, technology-based and water quality-based effluent limitations are 
independently applicable in determining appropriate effluent 
limitations for an NPDES permit.
    While confident that the Texas Attorney General's position on EPA's 
authority to independently require compliance with water quality 
standards will not be upheld by the courts, EPA also believes it is not 
necessary to wait for a final ruling by the courts before acting on the 
TPDES program proposed by TNRCC. The Texas Attorney General's statement 
confirms that TNRCC has full authority under state law to impose 
effluent limitations for any discharge as necessary to insure 
compliance with approved water quality standards. In addition, in a 
March 16, 1998, letter to EPA Region 6 Acting Regional Administrator 
Jerry Clifford from TNRCC Commissioner Ralph Marquez, Commissioner 
Marquez committed to add additional language to the MOA to clarify that 
in implementing the TPDES program, TNRCC would use water quality-based 
effluent limits in permits wherever necessary to insure compliance with 
water quality standards. As a result of Commissioner Marquez' 
commitment, the following language is now included on page 24 of the 
proposed MOA:

    Water quality based effluent limitations will be included in 
TPDES permits for all discharges to ensure compliance with approved 
water quality standards. Water quality based effluent limitations 
are part of the federally approved program and the State will impose 
such limitations in TPDES permits unless technology-based effluent 
limitations are more stringent.

Therefore, the proposed TPDES program would appear to function in a 
manner consistent with EPA's interpretation of the requirements of the 
CWA and its implementing regulations.

TPDES Resource Needs

    The CWA and EPA regulations require States seeking approval of 
State NPDES programs to demonstrate adequate resources, including 
qualified personnel and sufficient funding, to operate the proposed 
program if approved. Section 304(I)(2) of the CWA requires EPA to 
promulgate guidelines establishing the minimum procedural and other 
elements of State programs, including among other things, funding, 
personnel qualifications, and manpower requirements. 40 CFR 123.22 
requires a state seeking NPDES approval to provide as part of its 
program submission a description of the staff who will carry out the 
proposed State program and an itemization of the estimated costs of 
establishing and administering the proposed program for the first two 
years after approval. As required by 40 CFR 123.22, the State included 
a description of the cost of establishing and administering the 
proposed TPDES program for the first two years after program approval 
in Chapter 7 of its application. However, information provided to EPA 
by two public interest groups, the Texas Center for Policy Studies 
(letter to Samuel Coleman and Steven A. Herman dated May 7, 1998) and 
People Organized in Defense of Earth and her Resources (letter to Carol 
Browner and Jerry Clifford dated April 29, 1998), has raised questions 
concerning whether the available information indicates that the State, 
if authorized, will have sufficient funding to adequately implement the 
program. The answers to these questions will be important to EPA's 
final decision on TPDES program approval. To that end, EPA intends to 
seek clarification from the TNRCC regarding certain aspects of the 
information provided. Any additional comments by the public will also 
be considered by the Regional Administrator in making his final 
decision.
    It is also important to note that under the proposed TPDES program, 
authority over storm water general permits (approximately 20,000 
permittees) and municipal separate storm sewer permits (approximately 
30 permits) already issued by EPA would not be transferred to TNRCC 
until the federal permits expire or are replaced by a TPDES permit. 
Therefore, permitting authority and primary enforcement responsibility 
over a significant portion of the NPDES universe would not transfer to 
TNRCC until after the period covered by the financial capability 
information included in the program approval request. In addition, the 
State would be required to begin administering Phase II of the NPDES 
storm water program (expected to require permitting of numerous smaller 
municipalities and construction sites) starting around 2001. As a 
result of these anticipated increases in TNRCC responsibility in the 
years following program approval, resources needed to run the program 
would also increase. If the TPDES program were approved, TNRCC would be 
expected to increase its resources commensurate with program growth, 
and if it were unable to do so, the program would be subject to 
withdrawal by EPA under 40 CFR 123.64(b).

Funding Sources Available for the TPDES Program

    Under 40 CFR 123.22(b)(3), the program description must include an 
itemization of the sources and amounts of funding, including Federal 
grant money, expected to be available to TNRCC for the first two years 
after approval to meet the costs of establishing and administering the 
proposed TPDES program. However, since EPA cannot guarantee the level 
of Federal funding Congress will make available in future years, a 
State seeking program approval must be able to run its program with or 
without the assistance of Federal funding.
    Chapter 7 of the TPDES application contains both the expected 
program costs and the required breakdown on funding sources. The 
funding sources TNRCC would rely on for the first two years of the 
proposed TPDES program includes federal grants totaling $7,224,305 per 
year. Approximately 49% of the proposed TPDES budget would therefore be 
dependent on the continued availability of Federal grants. The Texas 
Legislature has already authorized TNRCC to increase the maximum annual 
permit fee to $25,000 and to collect additional fees to recover the 
costs of an authorized program.3 If

[[Page 33665]]

current levels of available Federal grant funds decline, TNRCC would 
need to further increase fee revenue or seek additional funds from the 
Texas Legislature to fund the TPDES program.
---------------------------------------------------------------------------

    \3\ Under Texas' proposed funding plan, the TNRCC will charge 
fees for storm water permittees. As a result, many industrial 
facilities, construction development projects and municipal separate 
storm sewer systems not currently regulated by the TNRCC will become 
subject to the TPDES fee system as storm water permitting authority 
transfers from EPA to the TNRCC.
---------------------------------------------------------------------------

Environmental Justice

    EPA encourages States to include environmental justice provisions 
in their environmental programs in furtherance of environmental justice 
policies, and to help ensure compliance with non-discrimination 
provisions of Title 6 of the Civil Rights Act. EPA wrote to TNRCC in 
December of 1997, recommending that the State include an environmental 
justice program as part of its proposed TPDES program. Under the 
current regulations for State program approval, Texas is not required 
to submit a description of program procedures to ensure environmental 
justice issues are taken into consideration in TNRCC's permitting and 
enforcement decisions. In a letter dated February 6, 1998, TNRCC 
indicated it does have an environmental justice program. However, the 
State did not make that program a part of the TPDES application.

Other Federal Statutes

A. National Historic Preservation Act

    Section 106 of the National Historic Preservation Act requires that 
all federal agencies must consult with the State Historic Preservation 
Officer and the Advisory Council on Historic Preservation on all 
federal undertakings which may affect historic properties or sites 
listed or eligible for listing in the National Register of Historic 
Places. Regulations outlining the requirements of a section 106 
consultation on a federal undertaking are found at 36 CFR part 800. EPA 
has initiated section 106 consultation on the State's request for 
approval of the TPDES program.

B. Endangered Species Act

    Section 7 of the Endangered Species Act (ESA) requires that all 
federal agencies consult on federal actions which may affect federally 
listed species to insure they are unlikely to jeopardize the continued 
existence of those species or adversely modify their critical habitat. 
Regulations controlling consultation under ESA section 7 are codified 
at 50 CFR part 402. The approval of the State permitting program under 
section 402 of the Clean Water Act is a federal action subject to this 
requirement, but the State's subsequent TPDES permit actions are not. 
EPA Region 6 initiated formal consultation with the U.S. Fish and 
Wildlife Service on January 29, 1998.

C. Coastal Zone Management Act

    Pursuant to section 307(c)(1)(C) of the Coastal Zone Management 
Act, Federal agencies carrying out an activity which affects any land 
or water use or natural resource within the Coastal Zone of a state 
with an approved Coastal Zone Management Plan must determine whether 
that activity is, to the maximum extent practicable, consistent with 
the enforceable requirements of the Plan and provide its determination 
to the State agency responsible for implementation of the Plan for 
review. Texas' approved Coastal Zone Management Plan is administered by 
the General Land Office and, more particularly, by its Coastal 
Coordination Council. TNRCC permit actions are themselves subject to 
consistency review under 31 TAC Sec. 505(11)(a)(6); thus approval of 
TNRCC's TPDES program would not affect Texas' coastal zone and would be 
consistent with the enforceable requirements of Texas' Coastal Zone 
Management Plan.

D. Regulatory Flexibility Act

    Based on General Counsel Opinion 78-7 (April 18, 1978), EPA has 
long considered a determination to approve or deny a State NPDES 
program submission to constitute an adjudication because an 
``approval'', within the meaning of the APA, constitutes a ``license,'' 
which, in turn, is the product of an ``adjudication''. For this reason, 
the statutes and Executive Orders that apply to rulemaking action are 
not applicable here. Among these are provisions of the Regulatory 
Flexibility Act (RFA), 5 U.S.C. 601 et seq. Under the RFA, whenever a 
Federal agency proposes or promulgates a rule under section 553 of the 
Administrative Procedure Act (APA), after being required by that 
section or any other law to publish a general notice of proposed 
rulemaking, the Agency must prepare a regulatory flexibility analysis 
for the rule, unless the Agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
If the Agency does not certify the rule, the regulatory flexibility 
analysis must describe and assess the impact of a rule on small 
entities affected by the rule.
    Even if the NPDES program approval were a rule subject to the RFA, 
the Agency would certify that approval of the State's proposed TPDES 
program would not have a significant economic impact on a substantial 
number of small entities. EPA's action to approve an NPDES program 
merely recognizes that the necessary elements of an NPDES program have 
already been enacted as a matter of State law; it would, therefore, 
impose no additional obligations upon those subject to the State's 
program. Accordingly, the Regional Administrator would certify that 
this program, even if a rule, would not have a significant economic 
impact on a substantial number of small entities.
    I hereby provide public notice of the application by the State of 
Texas for approval to administer, in accordance with 40 CFR part 123, 
the TPDES program.

    Dated: June 11, 1998.
Gregg A. Cooke,
Regional Administrator.
[FR Doc. 98-16249 Filed 6-18-98; 8:45 am]
BILLING CODE 6560-50-P