[Federal Register Volume 63, Number 185 (Thursday, September 24, 1998)]
[Notices]
[Pages 51164-51201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25314]



[[Page 51163]]

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Part III





Environmental Protection Agency





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State Program Requirements; Approval of Application to Administer the 
National Pollutant Discharge Elimination System (NPDES) Program; Texas; 
Notice

  Federal Register / Vol. 63, No. 185 / Thursday, September 24, 1998 / 
Notices  

[[Page 51164]]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-6166-3]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Approval of the Texas Pollutant Discharge Elimination System 
(TPDES) under the Clean Water Act.

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SUMMARY: On September 14, 1998, the Regional Administrator for the 
Environmental Protection Agency (EPA), Region 6, approved the 
application by the State of Texas to administer and enforce the 
National Pollutant Discharge Elimination System (NPDES) program for 
regulating discharges of pollutants into waters of the State. The 
authority to approve State programs is provided to EPA in Section 
402(b) of the Clean Water Act (CWA). The approved state program, i.e., 
the Texas Pollutant Discharge Elimination System (TPDES) program, is a 
partial program to the extent described in this Notice (see section 
titled ``Scope of the TPDES Program''). The TPDES program will be 
administered by the Texas Natural Resource Conservation Commission 
(TNRCC). In making its decision, EPA has considered all comments and 
issues raised during the public comment periods. Summaries of the 
comments and EPA responses are contained in this notice. The comments 
and public hearing record are contained in the administrative record 
supporting this notice.

EFFECTIVE DATE: Pursuant to 40 CFR 123.61(c), the TPDES program 
authorization was approved and became effective on September 14, 1998.

ADDRESSES FOR VIEWING/OBTAINING COPIES OF DOCUMENTS: The Administrative 
Record (Docket 6WQ-98-1) and copies of the final program documents for 
the TPDES program are available to the public during normal business 
hours, Monday through Friday, excluding holidays, at EPA Region 6's 
12th Floor Library, 1445 Ross Avenue, Dallas, Texas 75202. A copy is 
also available for inspection from 8:00 a.m. to 5:00 p.m., 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.
    Copies of the principal TPDES program documents (MOA, Program 
Description, and Statement of Legal Authority) are accessible on the 
Internet through the EPA Region 6 Water Quality Protection Division's 
web page http://www.epa.gov/earth1r6/6wq/6wq.htm and the TNRCC web page 
http://www.tnrcc.state.tx.us.

FOR FURTHER INFORMATION CONTACT: TNRCC expects to have a toll-free 
number for people to call with questions regarding the TPDES program 
operational by September 21, 1998. The TNRCC number is 1-888-479-7337.

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.
    On February 5, 1998, the Governor of Texas requested NPDES major 
category partial permit program approval 1 for those 
discharges under the authority of the 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. EPA 
then proceeded to consider the approvability of the complete program 
application package.
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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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    The documents were described in the Federal Register Notice of June 
19, 1998, (63 FR 33655) in which EPA requested comments and gave notice 
of public hearing. Further notice was also provided by way of notices 
published in the following nineteen newspapers on various dates from 
June 21-26, 1998: Tyler Morning Telegraph; Austin American Statesman; 
El Paso Times; Lubbock Avalanche Journal; Forth Worth Star Telegram; 
Odessa American; San Antonio Express; Wichita Falls Record-News; 
Abilene Reporter News; 10 San Angelo Standard-Times; Dallas Morning 
News; Amarillo News; Beaumont Enterprise; Houston Chronicle; Corpus 
Christi Caller-Times; Daily Sentinel (Nacogdoches); Brownsville Herald; 
Laredo Morning Times; and Longview News Journal.
    As a part of the public participation process, both a public 
meeting and hearing were held in Austin, Texas, on July 27, 1998. The 
public meeting provided as an informal question and answer session, and 
began at 1:00 p.m. The hearing started at 7:00 p.m. Oral comments were 
recorded during the hearing and are contained in the administrative 
record supporting this action. Comments were accepted by EPA on all 
aspects of the TPDES program authorization through the close of the 
public comment period, which was extended by the Hearing Officer to 
August 10, 1998. EPA also accepted comment through August 24, 1998 on 
some more detailed clarifying information on resources for the TPDES 
program, provided in TNRCC's comments submitted at the July 27, 1998, 
public hearing. All comments presented during the public comment 
process, either at the hearing or in writing, were considered by EPA in 
its decision. EPA's responses to the issues raised during the comment 
period are contained in the Responsiveness Summary provided in this 
notice. A copy of EPA's decision and its Responsiveness Summary has 
been sent to all commenters and interested parties (those persons 
requesting to be on the mailing list for EPA actions in Texas).
    The Regional 6 Administrator notified the State of the program 
approval decision by letter dated September 14, 1998. Notice of EPA's 
final decision is being published in the newspapers in which the public 
notice of the proposed program appeared (listed above). As of September 
14, 1998, EPA suspended issuance of NPDES permits in Texas (except for 
those permits which EPA retained jurisdiction as specified below in the 
section titled ``Scope of the TPDES Program'').2
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    \2\ Had EPA been unable to meet the statutory deadline for 
action on the pending NPDES program authorization request (September 
14, as extended by the TNRCC), then EPA would have had to suspend 
the issuance of NPDES permits on that date (other than for those 
activities retained by EPA via our Memorandum of Agreement). 
However, failure to meet the deadline would not have meant that the 
TNRCC automatically gained NPDES authority. It is EPA's 
interpretation that a State agency would not gain NPDES authority 
unless and until EPA approves the State program, consistent with CWA 
402(b), and 40 CFR 123.1.

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[[Page 51165]]

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

A. Scope of the Partial Program

    The TPDES program is a partial program which conforms to the 
requirements of Section 402(n)(3) of the CWA. The TPDES program applies 
to all discharges covered by the authority of the TNRCC. 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 the 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 
retains 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 retains permitting authority and primary enforcement 
responsibility over discharges from any CAFOs not subject to TNRCC 
jurisdiction. EPA and TNRCC are currently unaware of any CAFOs that are 
not under the jurisdiction of TNRCC. However, there is the potential 
that certain CAFOs that began using playas as waste treatment units 
before July 10, 1991, could claim exemption from State water quality 
standards in limited circumstances--effectively removing them from the 
jurisdiction of the TPDES program. This issue is discussed in detail in 
the response to comments sections of today's notice. EPA is simply 
taking this opportunity to inform the public that the Agency will 
retain NPDES jurisdiction over any such CAFO that falls outside of 
TNRCC's jurisdiction under the TPDES program.
    TNRCC does not have, and did not seek, the authority to regulate 
discharges in Indian Country (as defined in 18 U.S.C. 1151). EPA 
retains NPDES permitting authority and primary enforcement 
responsibility over Indian Country in Texas.

B. Transfer of NPDES Authority and Pending Actions

    Authority for all NPDES permitting activities, as well as primary 
responsibility for NPDES enforcement activities, within the scope of 
TNRCC's jurisdiction, have been transferred to the State, with some 
exceptions. EPA and the State agreed to these exceptions in the MOA 
signed September 14, 1998. In addition to the exceptions listed below, 
EPA retains, 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 also retains, 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 
3 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 MOA between EPA and the TNRCC 
provides that the TNRCC assumes, 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:
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    \3\ 40 CFR 123.1(d)(1) uses the term ``jurisdiction'' to 
describe the fact that EPA may retain administration over any 
permits issued by EPA, and for that reason, the term 
``jurisdiction'' is used in this section. However, use of this term 
does not mean that EPA retains permit issuance authority for new 
permits, or that TNRCC does not have authority to issue TPDES 
permits for discharges covered by the permits over which EPA retains 
administration.
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    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), will 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: 
Construction storm water general permit (63 FR 36490), 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, as modified) 4, 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), will 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.
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    \4\ The Multi-sector general permit was modified on August 7, 
1998, to clarify permit coverage for storm water discharges covered 
under Sector G, Metal Mining. A further modification is currently 
awaiting publication in the Federal Register to expand the scope of 
coverage to all types of facilities previously covered under the 
1992 baseline general permit. However, because permit modification 
does not trigger the transfer of permit jurisdiction under this 
section, the Multi-sector storm water general permit will 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.
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    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

[[Page 51166]]

general permits may 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), will transfer 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 does 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 122.26(a)(1)(v). The state has jurisdiction and 
permitting authority, including primary enforcement responsibility, 
over these discharges.
    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), will 
transfer 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 temporarily retains NPDES permitting authority, (except as 
provided by paragraph 3 below--Facilities with Outstanding Compliance 
Issues), over all 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 entered 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 approval. Permitting authority and primary enforcement 
responsibility will be transferred to the State as the permits are 
finalized.
3. Facilities with Outstanding Compliance Issues
    EPA will temporarily retain primary NPDES enforcement 
responsibility for those facilities which have any outstanding 
compliance issues. EPA will 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 will be 
transferred to the state as the actions are finalized. Facilities will 
be notified of this retained jurisdiction and again when the file is 
transferred to the State. Permitting authority over these facilities 
will transfer to the State at the time of program approval.
    A list of existing Permittees that will temporarily remain under 
EPA permitting jurisdiction/authority is included as part of the public 
record and available for review. Texas will continue to provide state-
only permits for those dischargers over which EPA temporarily retains 
permitting authority, and which need state authorization to discharge.
    No changes were made to the proposed TPDES program documents based 
on information obtained in the public comments received. However, TNRCC 
did provide some updates to its Continuing Planing Process (CPP) prior 
to its approval on September 10, 1998. More information on the CPP and 
these updates are found in comments and responses in the Responsiveness 
Summary section of today's notice.

Responsiveness Summary

    EPA received a large number of comments on this authorization 
request. Many comments expressed the concern that the TNRCC may not be 
able to implement the program as described in their application package 
(e.g., due to possible future resource constraints). While EPA 
appreciates the concerns expressed in these comments, conjecture on 
future actions is not a basis for program disapproval. Texas has made a 
solid commitment to this program and has demonstrated that it meets 
minimum EPA requirements. TNRCC is not required to show that its TPDES 
program will exceed Federal requirements. Because the federal 
requirements are geared to ensure continuous environmental improvement, 
this ensures continues water quality improvement under the TPDES 
program. As part of its oversight role (including quarterly program 
reviews), EPA will review the implementation of the TPDES program to 
ensure that the program is fully and properly administered
    The following is a summary of the issues raised by persons 
commenting on TNRCC's application for authorization of the TPDES 
program and EPA's responses to those issues. Due to the interconnected 
nature of many issues EPA received comment on, a degree of 
repetitiveness was unavoidable in the responses to comments. In an 
attempt to minimize redundancy, while still allowing those interested 
in a particular aspect of an issue to find an answer to their question, 
the responsiveness summary was structured by subject area. This 
resulted in related aspects of several issues being addressed in more 
than one subject area. Unless otherwise noted, all references to 
``MOA,'' ``statement of legal authority,'' ``program description,'' and 
``chapter [1-8]'' refer to the corresponding documents in the TPDES 
program submittal by TNRCC. Likewise, ``TPDES application'' or 
``application'' refers to the TPDES program submittal as a whole. 
Unless otherwise indicated, ``the Federal Register notice'' when used 
without reference to a specific date or citation refers to the June 19, 
1998, notice of Texas's application for NPDES authorization (63 FR 
33655-33665).

Overall Support/Opposition Comments

1. Issue: General Statements of Support or Opposition
    Many industries, trade groups, and regulated entities in the State 
of Texas expressed strong support for approval of the TNRCC application 
to administer the NPDES program in Texas. Most of these letters of 
support looked forward to the opportunity to reduce the additional 
confusion, time and expense of dealing with two regulatory agencies 
with largely duplicative permitting systems. Several citizens and 
public interest groups sent in strong letters of opposition, requesting 
EPA disapprove TNRCC's application. Many of these citizens and 
organizations believe the checks and balances of two permitting 
programs afford the State's ecosystems and waters, and its citizens, a 
greater level of protection than one system run by the State. Many of 
the letters EPA received were form letters from citizens

[[Page 51167]]

opposing the authorization of the TPDES program and highlighting two 
major concerns: (1) adequacy of TNRCC's resources and commitment to 
implement and enforce the program, and (2) concerns about public 
participation under the Texas-run program. Several comments, both for 
and against, related their information and issues directly to EPA's 
specific request in the Federal Register for public input on ten 
aspects of the proposed TPDES program (63 FR 33662).
    Response: EPA agrees with the regulated public that a single 
regulatory agency eliminates duplicative efforts by both the regulated 
public and the governmental agencies trying to provide protection for 
our natural resources. It was clearly Congress' intent that states have 
every opportunity to directly administer the NPDES program and that 
EPA's main role would be providing national consistency and guidelines 
in an oversight role. EPA was only intended to run the NPDES program 
until states could develop programs adequate to protect the waters of 
the U.S. To this end, EPA had never been fully funded to do all the 
jobs required for full direct implementation of the NPDES program. This 
is the responsibility of State-run programs, and provides incentives 
for states to take over the program. States that wish to directly 
ensure protection of its State resources, and equitable treatment of 
its regulated public will take over the responsibilities of the NPDES 
program as Texas has applied to do. EPA does understand the concern 
citizens may have about State agencies replacing the federal presence. 
Some citizens are concerned that states are more easily influenced by 
political pressures. Some enjoy the double opportunity to separately 
participate in the regulatory process at both the State and Federal 
level to ensure protection of the natural resources important to their 
health, livelihood, and recreation.
    EPA believes that the program outlined by the State of Texas will 
provide protection of these resources. EPA intends to work closely with 
the State in an oversight role to ensure the described program is 
implemented in accordance with the requirements of the CWA. EPA's 
continued authority to review and approve water quality standards, the 
Continuing Planning Process (CPP), and Water Quality Management Plans, 
oversee State-issued permits (and object if necessary), directly 
inspect dischargers, and over-file State enforcement actions affords 
the same level of CWA protection to the surface waters in Texas as if 
there were still separate State and EPA permits. EPA appreciates all of 
the input it received on the ten areas it specifically requested 
comments on in the Federal Register Notice. The comments below 
summarize all of the issues, information, and concerns which EPA 
received during the comment period; they include those on these ten 
specific topics and others of concern to the public.
    In addition, EPA has reviewed comments that were submitted during 
the process of reviewing the TPDES program for completeness. Although 
these were sent prior to the official comment period, EPA has reviewed 
the issues and information in those letters, and incorporated all 
relevant issues in this response to comments. EPA has done this to 
ensure the public is provided with all the information germane to EPA's 
decision. This responsiveness summary serves as EPA's response to 
comments on the authorization of the TPDES program.

Issues on Which EPA Specifically Requested Public Input

Public Participation

2. Issue: Limits on Use of Federal Citizen Suits
    One comment argued that provisions in Texas law would limit the 
ability of the public and local governments to use the citizen suit 
provisions of the Clean Water Act. Suggested first is that TNRCC's 
provisions for temporary orders or emergency orders could be used to 
authorize what would otherwise be a violation, in effect immunizing a 
violator from a citizen suit for the violation. The comment asserts 
that orders issued in the past under Chapter 7 of the Texas Water Code 
``often'' authorized discharges of partially-treated or untreated 
wastewater or wastewater with constituent concentrations in excess of 
permit standards.
    Response: Texas SB 1876 consolidated various statutory provisions 
governing emergency and temporary orders under new TWC Chapter 5, 
Subchapter L. Although some categories of orders might have been used 
in the past regarding pre-TPDES permits to provide exemptions under 
State law, Chapter 5 contains specific provisions making this authority 
inapplicable to provisions approved under the federal NPDES program. 
TWC Sec. 5.509. (See also 30 TAC 35.303). Accordingly, the situations 
under which TNRCC will be able to use Chapter 5 emergency orders and 
temporary orders under the TPDES program (see 23 TX Reg 6907) will not 
result in ``authorizations'' pursuant to new or modified permits, nor 
provide a shield to citizen suits. See also specific comment on 
emergency orders and temporary orders. EPA will also be provided a copy 
of draft emergency and temporary orders for review and approval in 
accordance with MOA section IV.C.6.&7. The temporary and emergency 
orders also provide for public notice, public comment, and the ability 
of affected parties to request a public hearing. EPA does not agree 
with the comment's claim that this authority could be used to 
``immunize'' violators.
3. Issue: Defenses Under TWC 7.251 Limit Use of Citizen Suits
    One comment maintained that the defense under Section 7.251 of the 
Texas Water Code limits the use of the federal citizen suit provisions. 
The comment argues that federal law, unlike Texas law, does not provide 
excuses from violations and requires the operator to be prepared for 
reasonable worst case conditions. See also comments on strict 
liability.
    Response: TWC Sec. 7.251 provides only a narrow defense for 
innocent parties. As interpreted by the Texas Attorney General, TWC 
Sec. 7.251 in effect requires the operator to be prepared for 
reasonable worst case conditions, because it does not excuse violations 
that could have been avoided by the exercise of due care, foresight, or 
proper planning, maintenance or operation. In addition, the provision 
does not shield a party from liability if that party's action or 
inaction contributed to the violation. There is a violation where a 
permittee allows a discharge to continue, in cases where the permittee 
could have taken steps to stop the discharge from continuing, but 
failed to do so. There appears to be no reason why the existence of the 
narrow defense in this law would impair citizens' right to bring suit.
    Moreover, CWA Sec. 505(a)(1) allows citizens to bring suit against 
any person alleged to be in violation of an effluent standard or 
limitation. As discussed in the Federal Register notice, EPA and the 
courts have interpreted the CWA as a strict liability statute. The 
defenses outlined in TWC Sec. 7.251 are not recognized in the federal 
law. Accordingly, EPA does not believe that the authority in CWA 
Sec. 505(a)(1) would be affected by TWC Sec. 7.251.
4. Issue: Potential for Use of Penalties Not Recovering Economic 
Benefit to Block Citizen Suits
    One comment suggests that Texas law does not require TNRCC to 
consider economic benefit in determining the

[[Page 51168]]

amount of a penalty. Therefore, the comment concludes, TNRCC can bring 
and has brought civil enforcement actions that seek less than the 
economic benefit and can thereby block civil enforcement actions 
brought by citizens or EPA.
    Response: On page 2 of its July 27, 1998, comments, TNRCC states 
that the TNRCC statutory and regulatory authority as interpreted in its 
policy for penalties (included in its TPDES application as Appendix 6) 
``does consider and account for all the factors required by state and 
federal law, including the economic benefit gained through 
noncompliance.'' TNRCC also asserts that, although the TNRCC does not 
use the same method of penalty calculation as EPA, under its policy, 
the actual penalties assessed will be appropriate, will not be 
generally or consistently less than those assessed by EPA, and will be 
consistent with federal law. EPA believes that the TNRCC's penalty 
authority does not prevent the program from satisfying the requirement 
in 402(b) of the Act and 40 CFR 123.27 that States have enforcement 
authority, including civil and criminal penalties, adequate to abate 
violations of a permit or the permit program.
    As noted in the Federal Register notice (63 FR at 33664), Texas is 
not required to follow EPA's penalty policy. The comment did not argue 
that the statutory and regulatory requirements for approval require 
that TNRCC's statutory and regulatory procedures for assessing 
penalties be identical to EPA's. Accordingly, the comment has not 
provided any specific reasons why the TNRCC's authority imposes an 
inappropriate limitation on citizen access to CWA Sec. 505.
    The same response also applies to the extent that the comment is 
arguing that TNRCC's statutory and regulatory penalty authority imposes 
an inappropriate limitation on EPA ability to bring an enforcement 
action. In addition, as noted in the Federal Register notice, EPA may 
over-file as necessary to assure that appropriate penalties are 
collected nationwide. EPA reserves the right to over-file if a state 
has taken enforcement action but assessed a penalty that EPA believes 
is too low, consistent with CWA Secs. 309 and 402(i).
5. Issue: Texas Audit Privilege Act Limits Access to Audit Documents in 
Citizen Suit Proceedings
    A comment maintained that the Texas Audit-Privilege Law could be 
used to block EPA or a citizen from getting an audit through discovery. 
More generally, the comment noted that there is no case law holding 
that a more restrictive State evidentiary rule would apply in a federal 
action brought under the CWA.
    Response: EPA does not agree that the Texas Audit-Privilege Law may 
apply to EPA enforcement actions or citizen suits that raise federal 
questions under the CWA in federal court. The law is an evidentiary 
rule that applies to administrative and judicial actions under State 
law. EPA believes that this rule would not apply in a federal action, 
brought by EPA or a citizen's group, and that under Federal Rule of 
Evidence 501, federal procedural requirements would be controlling. 
EPA's information-gathering authority under federal law, including CWA 
308, is broad and allows the Agency to obtain information as required 
to carry out the objectives of the Act. There is nothing in section 308 
or 309 of the Act that suggests a State evidentiary rule could be used 
to block EPA's use of this information.
    There is no reason to think that if the issue came before a federal 
court, the court would apply a more restrictive State evidentiary rule 
rather than the federal rule. EPA believes it unlikely that the Texas 
Audit-Privilege Law will be held applicable in federal enforcement 
actions, and the mere ``possibility'' cited by the comment is therefore 
not a sufficient basis upon which to deny authorization of the Texas 
program. If in the future EPA were to receive an adverse decision on 
this issue, the Agency could consider its options at that time, 
including requesting Texas to revise its law.
6. Issue: Public Comment on Inspections
    A comment expressed the concern that by deferring negotiation of 
the annual inspection plan, the public has no opportunity to comment, 
thereby ``deny[ing] Texas citizens due process of law.''
    Response: EPA does not believe that the regulations define, with no 
flexibility, a precise number or type of inspections that must occur. 
Rather, as explained elsewhere, the regulations require States to show 
that they have ``procedures and ability'' to inspect all major 
discharges and all Class I sludge management facilities, where 
applicable. 40 CFR 123.26(e)(5). Thus, the regulations require a 
showing of capacity and a commitment to a level-of-effort for 
inspections, reserving discretion to the two sovereign governments to 
decide what number of inspections to undertake, and the identity of the 
facilities to be inspected. These judgments are matters of enforcement 
discretion, which are not reviewable, and the exercise of which do not 
raise due process issues. (See Heckler v. Chaney, 470 U.S. 821, 832 
(1985))
7. Issue: Overview of Public Participation Issues
    EPA received comments from seven different individuals or groups, 
concerning the public participation aspects of the proposed Texas NPDES 
authorization. Four similar comments expressed the opinion that Texas 
had established regulations and procedures that provided extensive 
public participation and, in fact, provided more opportunity to 
participate than required by the federal rules. One comment stated that 
there were extensive deficiencies in the State's statutes and rules in 
a number of separate areas regarding public participation requirements. 
These included issues regarding State standing not being as broad as 
federal standing, inadequate rules and procedures governing notice and 
comment for permitting and enforcement actions, and the State's 
inability to provide adequate information in a timely manner when 
claimed confidential by a permittee. Two additional comments raised 
concerns about the State failing to adequately address complaints and 
respond to comments, and one was concerned about the adequacy of the 
Texas standing statute and regulations.
    Response: Responses are provided in the sub-issues below.
8. Sub-issue on Public Participation: Inadequate Notice and Comment of 
Permitting Actions
    Several comments expressed concern that Texas' requirements for 
public notice and comment of permitting actions were not adequate for 
program assumption.
    Response: EPA believes that they are adequate. EPA has carefully 
reviewed, based on the issues raised by the comments, Texas' 
requirements for public notice and comment of permitting actions found 
at 30 TAC Chapters 55 and 80. These provisions were enacted to ensure 
that Texas could meet the requirements of 40 CFR 123.25. As several 
comments asserted, TNRCC has enacted several revisions to its notice 
and comment procedures and EPA has found that the Texas regulations in 
this area meet the requirements of 40 CFR 123.25. One comment stated 
that there were differences between EPA's rules and TNRCC' rules 
concerning notice and comment in this area but did not identity what 
those differences were, and EPA in its review of the matter

[[Page 51169]]

could not identify any such differences. One comment also noted that 
TNRCC had streamlined its public participation procedures so as to 
``get government off the back of industry,'' thereby eliminating public 
participation. Once again, there was no specific TNRCC rule or policy 
identified and no statement as to what specific authorization 
requirement of EPA's is not being met. Our review of Texas rules has 
not identified any such conflict and TNRCC's rules, as identified 
above, meet CWA requirements.
9. Sub-issue on Public Participation: TNRCC Consideration of Public 
Comments on Permitting Actions
    Several comments expressed doubt that TNRCC will sincerely consider 
public comments on permitting actions.
    Response: TNRCC is clearly required by Sec. 55.25(c) to consider 
and, where appropriate, make changes to proposed permitting actions 
based on public comments. If an aggrieved party feels that TNRCC does 
not act appropriately, the party can often appeal the decision to the 
appropriate civil court (TWC Sec. 5.351). In addition, EPA will be 
providing oversight of the Texas NPDES program, as it does every 
authorized program, to help ensure compliance with the authorization 
requirements.
10. Sub-issue on Public Participation: Adherence to Federal 
Requirements for Notice and Comment of Permitting Actions
    One comment stated that Texas' program was deficient because the 
Texas program does not strictly adhere to all elements of EPA's policy 
or provisions of 40 CFR Part 25 involving public participation.
    Response: EPA disagrees Texas is deficient in this area. 
Requirements on public participation for authorized programs are 
included in 40 CFR Part 123, State Program Requirements, including 
requirements for permitting, compliance evaluation and enforcement 
efforts. Neither the early 1981 EPA policy statement nor the full 
content of 40 CFR Part 25 cited in the comment constitute requirements 
for state programs.
11. Sub-issue on Public Participation: Opportunities for Public 
Participation in Enforcement Actions
    One comment stated that Texas law does not provide the required 
opportunities for public participation in enforcement actions.
    Response: EPA disagrees. Texas has elected, in accordance with 40 
CFR 123.27, to provide for public participation in enforcement actions 
by providing assurances that it will (1) investigate and provide 
written responses to all citizen complaints, (2) not oppose permissive 
intervention, and (3) provide 30 days' notice and comment on any 
proposed settlement of an enforcement action. (See 40 CFR 123.27) TNRCC 
has procedures and/or enacted regulations to implement all of these 
requirements. (See 30 TAC 80.105, 109, and 254; see also Texas Water 
Code Ann. Sec. 5.177 for complaint process)
12. Sub-issue on Public Participation: Definition of Settlement in 
Enforcement Actions
    One comment stated that the above rules failed to define 
``settlement'' and therefore were too vague to provide effective public 
participation.
    Response: EPA does not find this to be a defect in the Texas 
program. First, it should be noted that the term ``settlement'' is not 
defined in EPA regulations. EPA also notes that both EPA and TNRCC 
regulations state that there will be notice and comment upon 
``settlement of enforcement actions.'' (See, 40 CFR 123.27(d)(2)(iii) 
and 30 TAC 80.254) EPA believes this provides a sufficient definition 
of the type of settlement covered (i.e., any agreement between parties 
resolving an agency enforcement action). Also, TNRCC stated in its 
preamble in adopting 30 TAC 80.254 that, while ``settlement'' was not 
defined in the regulations, it believed that settlement has a well 
known meaning and stated settlement means ``the resolution of issues in 
controversy by agreement instead of adjudication.'' EPA does not find 
this definition to be at odds with the intent of its authorization 
criteria in this area. EPA does note that the comment did not state 
what kind of ``settlement'' of an enforcement action the TNRCC was 
failing to notice and comment, but it is clear the proper regulation is 
in place and TNRCC's interpretation of the rule is acceptable.
13. Sub-issue on Public Participation: Publication of Notices Only in 
the Texas Register
    One comment noted that TNRCC's decision to publish notice and ask 
for comments on proposed settlements of enforcement actions in the 
``Texas Register only'' does not provide effective notice.
    Response: EPA believes that the use of the Texas Register provides 
adequate notice and meets the intent of the authorization criteria. 
While the comment does not explain reasons for this view that the Texas 
Register is not adequate, EPA finds notice in the Texas Register to be 
acceptable and, indeed, EPA and the Department of Justice provide for 
notice of its civil judicial settlements in the Federal Register. 
Registers provide a place where all citizens may go to inform 
themselves of actions proposed by various governmental bodies. TNRCC's 
use of this system is appropriate and provides effective public 
participation by using this statewide method to inform its citizenry of 
its proposed settlements.
14. Sub-issue on Public Participation: Permissive Intervention in 
Enforcement Actions
    Some comments stated that the permissive intervention provision in 
80 TAC 109 was inadequate because the rule stated that intervention 
would not be allowed where it would unduly delay or prejudice the 
adjudication.
    Response: EPA disagrees with this assertion. Rule 24(b) of the 
Federal Rules of Civil Procedure contains the very same language. In 
addition, EPA's own rules on intervention found at 40 CFR 22.11(c) 
contain the very same language. It is important for administrative law 
judges and officers to have the ability to protect the rights of all 
parties and ensure that cases are administrated appropriately. Contrary 
to the comment's assertion, undue delay or prejudice have well-defined 
meanings in the case law. EPA does not feel that the use of these two 
terms creates a public participation problem. EPA fully expects that 
the state administrative law officers will appropriately apply these 
standards.
15. Sub-issue on Public Participation: TNRCC Executive Director's 
Control Over Enforcement Petitions
    A comment expressed concern about the provision in the Texas 
regulation that states only the Executive Director may amend or add to 
the violations alleged in the petition. See 80 TAC 115.
    Response: EPA disagrees with the comment that this prevents 
effective and meaningful public participation. As seen above, 
permissive intervention may have certain justifiable restrictions. It 
would seem that TNRCC seeks to reserve its enforcement discretion in 
determining which violations it will pursue with its enforcement 
resources. In addition, an intervening party has full rights to present 
evidence, especially as to the appropriate penalty amount and, even 
more importantly, the appropriateness of any required compliance or 
corrective action that may be included in a settlement or order issued 
to bring the facility into full compliance with the regulations. In 
addition, CWA Sec. 505 allows a citizen to bring suit in federal court 
with regard to

[[Page 51170]]

any violation of the approved state program which the state is 
diligently prosecuting. This ensures an effective process whereby 
violations not addressed by the state agency may be resolved.
16. Sub-issue on Public Participation: TNRCC Authority to Promulgate 
Regulations Affecting Public Participation in Enforcement Actions
    Two comments also raised the issue that TNRCC did not have 
statutory authority to promulgate the regulations and that there were 
certain procedural defects in the promulgation of some of its 
regulations. There was a specific concern regarding the state 
regulation allowing permissive intervention in enforcement actions.
    Response: TNRCC has broad authority under the Texas Water Code 
Secs. 5.102, 5.103, and 5.112 and Chapter 26 to promulgate rules to 
protect the waters of the State and to provide for public participation 
in carrying out this legislative purpose. Clearly it was TNRCC's 
intent, when it added the permissive intervention rule, to meet EPA's 
requirement for public participation in enforcement actions. The Texas 
Attorney General has issued an opinion stating that TNRCC has the 
authority to implement the federal NPDES program. Promulgations are 
entitled to a presumption of regularity and EPA accepts the state's 
assurances that they were valid. Further, these regulations have been 
fully promulgated and are currently effective, and, therefore, this 
could not be a basis on which to deny authorization. If the State is 
challenged in court on this matter and receives an adverse ruling 
striking down the permissive intervention regulation or any other state 
regulation required to maintain this federally authorized program, the 
State would be required to remedy any defect in order to maintain 
program authorization.
17. Sub-issue on Public Participation: Public's Right to Appeal 
Settlement of an Enforcement Action
    A comment stated the State did not provide a right to appeal a 
settlement of an enforcement action subsequent to the notice and 
comment period.
    Response: EPA does not believe this raises an authorization 
problem. 40 CFR 123.27(d)(2)(iii) does not require the state to provide 
an appeal procedure based on public comment in the settlement of an 
enforcement action. Nor does EPA provide such an appeal right in its 
administrative cases. In fact, EPA does not provide for notice and 
comment on CWA administrative case settlements at all, much less a 
right to appeal a settlement on that basis. EPA believes as a policy 
matter that it is important for the public to be able to raise concerns 
and issues regarding the settlement of enforcement cases so as to give 
the prosecuting agency an opportunity to reconsider its settlement 
decision if new, significant and material facts are brought to light. 
Having said this, an enforcement settlement agreement is significantly 
different from a permitting action. The safeguards to ensure public 
participation also can be different. 40 CFR 123.27(d)(2)(iii) regarding 
administrative enforcement settlements does not require that an appeal 
process be available. In 40 CFR 123.30, EPA specifically requires that 
civil judicial appeals of permitting decisions be provided by 
authorized states. There are other safeguards or public participation 
avenues available such as the right to permissive intervention and 
anyone who intervenes clearly has a right to appeal the settlement 
decision in a case to which he or she is a party. The Agency believes 
that another significant safeguard that provides assurances that 
comments will be properly considered is that prior to final entry of 
the settlement a judge (in a civil action) or the administrative law 
officer or commissioners must approve a settlement. (See TWC 
Sec. 7.075) These officials normally have broad authority to take 
notice of any fact or information, including public comments, to ensure 
that any settlement they recommend or sign is in the public interest 
and not contrary to law or statute. This is certainly the case in the 
federal courts. Citizens for a Better Environment, 718 F.2d 1117, 1128 
(D.C. Cir.) 1983, cert. denied 467 U.S. 1219 (1984).
    It should also be noted that CWA civil judicial settlements are not 
required by statute to be subject to notice and comment, but notice and 
comment is provided for in accordance with 28 CFR 50.7 and this 
Department of Justice regulation does not provide for an appeal 
process.
18. Sub-issue on Public Participation: Texas ``Standing'' Requirements
    Several comments expressed concern that Texas' requirements for 
``standing'' in permitting and enforcement procedures limited public 
participation.
    Response: As one comment pointed out, EPA has been concerned with 
state standing requirements and EPA believes that ``broad standing to 
challenge permits in court to be essential to meaningful public 
participation in NPDES programs.'' (61 FR 20976, May 8, 1996) EPA 
issued a rule providing the standard for States that administer NPDES 
programs regarding ``judicial review of approval or denial of 
permits.'' 40 CFR 123.30, as follows:

    ``States * * * shall provide an opportunity for judicial review 
in State Court of the final approval or denial of permits by the 
State that is sufficient to provide for, encourage, and assist 
public participation in the permitting process. * * * A State will 
meet this standard if State law allows an opportunity for judicial 
review that is the same as that available to obtain judicial review 
in federal court of a federally-issued NPDES permit [see Sec. 509 of 
the Clean Water Act]. A State will not meet this standard if it 
narrowly restricts the class of persons who may challenge the 
approval or denial of permits. * * *''

Id. (emphasis added) EPA was concerned during its review of Texas' 
draft NPDES submissions that the State law governing citizen 
standing in Texas judicial proceedings would not meet the applicable 
standard. In response to issues, the State Attorney General examined 
applicable law and gave his opinion that Texas law is substantially 
equivalent to the federally-prescribed standard. This opinion can be 
found in the Statement of Legal Authority by the Texas Attorney 
General. The Texas Attorney General has stated that civil judicial 
standing in the Texas courts is the same as associational standing 
in the Federal courts and very similar to the federal requirement 
for individual standing. The AG has supported his opinion by 
reviewing the Texas case law in this area. Considering the current 
state of the case law, EPA finds the AG's evaluation sufficient to 
support the Agency's conclusion that the program meets the 
requirements of 40 CFR 123.30, and gives the evaluation deference. 
According to the Attorney General, an Attorney General Opinion 
carries the weight of law unless and until it is overruled by a 
state court. (Attorney General Dan Morales, ``Legal Matters'' (last 
modified July 1998)) --http://www.oag.state.tx.us/WEBSITE/NEWS/
LEGALMAT/9807opin.htm_An Attorney General Opinion is entitled to 
great weight in courts. See Jessen Assoc., Inc. v. Bullock, 531 
S.W.2d 593, 598 fn6 (Tex. 1975); Commissioners' Court of El Paso 
County v. El Paso County Sheriff's Deputies Ass'n, 620 S.W. 2d 900, 
902 (Tex. App.-El Paso 1981, writ ref.n.r.e.); Royalty v. Nicholson, 
411 S.W. 2d 565, 572 (Tex. App.-Houston [14th Dist.] 1973, writ ref. 
n.r.e. The Attorney General's authority to issue legal opinions is 
governed by the Texas Constitution, Article 4, section 22, and the 
Texas Government Code Secs. 402.041-045.
    It should be noted that State law provides two avenues of appeal of 
an NPDES permit: (1) the evidentiary hearing process, which is subject 
to appeal in accordance with Texas Administrative Procedure Act (APA), 
Texas Government Code Ann. Sec. 2001.001 et. seg. and (2) a direct 
appeal to state court based on comments TWC Sec. 5.351. The ``affected 
person'' provisions of TWC Sec. 5.115(a) and 30 TAC 55.29 apply only to 
evidentiary

[[Page 51171]]

hearings and not to an appeal of an NPDES permit directly to state 
court based on comments. The court would decide standing based on State 
case law; therefore, EPA is determining approval of this element of the 
Texas program on the basis that at a direct appeal to civil judicial 
courts is provided for permitting actions under Texas law and the civil 
courts will determine standing based on the common law. The public is 
not required to file for an evidentiary hearing. Therefore, there is a 
direct avenue of appeal via the public comment process (TWC section 
5.351), and EPA is basing its evaluation of standing on that appeal 
right.5
---------------------------------------------------------------------------

    \5\ Although it was not necessary for EPA to review the standing 
requirements of the evidentiary hearing process, the Agency notes 
with approval the recent Texas Court of Appeals decision in Heat 
Energy Advanced Technology, Inc. et al., v. West Dallas Coalition 
for Environmental Justice, 962 S.W.2d 288 (1998 Tex. App.) regarding 
standing in the evidentiary hearing process under the ``affected 
person'' provisions of 30 TAC section 55.29.
---------------------------------------------------------------------------

    As part of EPA oversight of this program, we will be carefully 
reviewing any state court rulings in this area that may be handed down 
to ensure that standing and the appeal process continue to meet the 
requirements of 40 CFR 123.30. Should the Texas Supreme Court, which 
has not yet directly addressed the question of individual standing, 
ultimately articulate a test that is more restrictive than the federal 
standard, EPA will need to reconsider the adequacy of the public 
participation elements of the Texas NPDES program.
19. Issue: Impediments to Public Access to Permitting and Enforcement 
Information
    One comment asserts that public access to permitting and 
enforcement information may be impaired where confidentiality claims or 
state agency information processes slow access or prevent access to 
information.
    Response: The comment correctly asserts that ``Texas law for public 
access to information is generally equivalent to the federal law,'' and 
instead complains about perceptions of information mismanagement. These 
are not issues which impede authorization of the state program (TPDES), 
but do present matters which state and federal environmental officials 
will want to monitor during program implementation. The comment asserts 
that the state environmental agency is unwilling to summarily deny 
claims of business confidentiality or, in some cases, fails to do so in 
a timely manner. EPA has determined that Texas Open Records Act and 
EPA's regulations (40 CFR Part 2) are substantially equivalent. In both 
agencies, confidentiality decisions are made by the legal office, not 
the permit program. The permitting authority has little control over 
how or when this determination will be made. This issue has arisen from 
time to time during EPA's permitting process and EPA, where it is 
reasonable to do so, has suspended permit issuance during the 
resolution of claims of business confidentiality for permit application 
data. The facts surrounding these claims should be reviewed carefully 
by permit issuing entities. Actions should be taken to ensure 
information is made available to the public and that confidentiality 
claims do not prevent the public from being able to make informed 
comments. TNRCC can and should examine the equities of doing so, but 
this is not a program authorization issue. Similarly, the comment 
correctly asserts that ``on paper TNRCC's central records system could 
be adequate,'' but then complains that in fact it is not, noting ``a 
history of problems with the management of files'' by that agency. The 
comment asserts that TNRCC has implemented a record ``retention'' 
policy, a feature of most public record systems, including EPA's (e.g., 
see 40 CFR 2.105(b)). We agree with the comment that TNRCC has made 
recent efforts to improve its record's management, filing, and public 
responsiveness and EPA will continue to review this process during 
program oversight to ensure that any barriers which might arise to 
timely public access to information are addressed.

Texas' Regulatory Flexibility Under Texas Water Code 5.123

20. Issue: Texas' Regulatory Flexibility under Texas Water Code 5.123 
(Senate Bill 1591)
    EPA received several comments indicating that TWC Sec. 5.123 
(Senate Bill 1591) does not affect EPA's ability to approve the TPDES 
program. TWC Sec. 5.123 gives 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 also received two comments claiming that Sec. 5.123 
would prevent EPA from approving the TPDES program. One comment in 
support of approval believes that the assurances from the Texas 
Attorney General and TNRCC are sufficient to address EPA's concerns, 
and that implementation of Sec. 5.123 should not interfere with the 
approval of Texas' application to administer the NPDES program in 
Texas. The two other comments expressed belief that the MOA language is 
unnecessary, but support its addition if EPA believes that it will 
clarify the issue.
    Of the two comments opposed to approval on the basis of TWC 
Sec. 5.123, one alleges that because Sec. 5.123 allows TNRCC to waive 
any state standard or requirement, including water quality standards 
and reporting requirements, EPA cannot approve the Texas program. The 
comment also states that EPA cannot approve a program that includes 
Sec. 5.123 because the regulatory flexibility given to TNRCC makes it 
impossible for EPA to determine what standards TNRCC will apply in any 
situation. The comment also notes that the phrase ``not inconsistent 
with federal law'' is not defined in TWC Sec. 5.123. Furthermore, the 
comment claims that the assurances given by the Texas Attorney General 
and TNRCC are insufficient to repeal or nullify the clear language in a 
Texas law. The other comment opposes approval because of the 
flexibility given to TNRCC to exempt firms from State statutory and 
regulatory requirements.
    Response: In the Federal Register Notice, EPA discussed the 
implications of TWC Sec. 5.123, which, as discussed above, gives TNRCC 
flexibility to exempt from State statutory or regulatory requirements 
an applicant proposing an alternative method or alternative standard to 
control or abate pollution. As part of its application, Texas submitted 
a supplemental statement from its Attorney General stating that TWC 
Sec. 5.123 does not authorize TNRCC to ``grant an exemption that is 
inconsistent with the requirements for a federally approved program.'' 
This statement of the Attorney General is persuasive and entitled to 
consideration. See Jessen Associates, Inc. v. Bullock, 531 S.W. 2d 593 
(TX 1975). TNRCC also submitted a letter from TNRCC Commissioner Ralph 
Marquez, clarifying TNRCC's position that TWC Sec. 5.123 does not 
authorize TNRCC to grant permits or take other actions that vary from 
applicable federal requirements. Because TNRCC is charged with 
implementing TWC Sec. 5.123, its interpretation is also entitled to 
great weight. (Yates Ford, Inc. v. Ramirez, 692 S.W.2d 51 (TX 1985)).
    In MOA Section III.A.22, TNRCC states that ``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

[[Page 51172]]

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.'' Failure to comply with the terms and 
conditions of the MOA is grounds for withdrawal of the NPDES program 
from Texas (40 CFR 123.63).
    Based on the foregoing, EPA believes that the assurances and 
interpretations given by the Texas Attorney General (the chief law 
officer of the State) and TNRCC are sufficient to assure that TNRCC 
will not use TWC Sec. 5.123 to approve an application to vary a federal 
requirement or a State requirement which implements a federal program 
requirement under section 402(b) of the Clean Water Act, or the EPA 
regulations implementing section 402(b). If TNRCC's ability to vary 
state statutes and regulations does not include those statutes or 
regulations which encompass the federally approved TPDES program, there 
would be no effect on the federally approved TPDES program. If there 
would be no effect on the federally approved TPDES program, there is no 
reason to disapprove the Texas application on this basis.
    Furthermore, both the Texas Senate and House Committee Reports for 
S.B. 1591 (TWC Sec. 5.123) support this conclusion. According to these 
Reports, the purpose of S.B. 1591 was to give TNRCC the authority to 
exempt companies from those state requirements which exceed federal 
requirements (emphasis added). The alternative requirements would have 
to be at least as protective of the environment and public health as 
current standards. As the Reports state:

    ``This legislation provides specific statutory authorization for 
state programs which exceed federal law to serve as models for 
regulatory flexibility. This authorization is important for 
delegation of the federal Title V air-permitting program to Texas, 
so Texas can allow flexibility in those areas where Texas law 
exceeds federal law.'' (Senate Committee Report--Bill Analysis (S.B. 
1591)--4/4/97; House Committee Report--Bill Analysis (S.B. 1591)--4/
29/97)

    Because the language and the legislative history of TWC Sec. 5.123 
do not support an argument that this provision would allow the State to 
waive federal requirements, we conclude that TWC Sec. 5.123 does not 
render the TPDES program unapprovable.
    In addition, TNRCC recently published regulations implementing TWC 
Sec. 5.123 (23 TexReg 9347, September 11, 1998). In the preamble to 
those regulations, the TNRCC addressed the issue of whether the 
regulations could be interpreted to allow TNRCC to vary federally 
approved programs without EPA approval as follows:

    The commission * * * reiterates that orders entered under the 
authorizing statute, Water Code Sec. 5.123, and this rule will not 
conflict with legal requirements for federally delegated or 
authorized programs. Neither the authorizing statute nor this rule 
authorizes the commission to grant an exemption that is inconsistent 
with the requirements for a federally approved program. The attorney 
general of Texas has so informed EPA, in his letter dated March 13, 
1998, concerning the commission's application for NPDES 
authorization. As EPA points out in its comment, to vary the 
required elements of a federally authorized program without federal 
approval would violate (that is, be inconsistent with) federal law. 
As the attorney general noted, the authorizing statute does not 
authorize this.

    This interpretation by TNRCC is also entitled to great weight. 
Yates Ford, Inc. v. Ramirez, 692 S.W. 2d 51 (TX 1985). While it may 
have been clearer to the public and the regulated community had the 
TNRCC included in the regulations EPA's suggested language on this 
point, EPA is satisfied that the State's interpretation is consistent 
with EPA's. As part of our oversight function, EPA will ensure that the 
Texas Regulatory Flexibility Rules are implemented in a manner that 
fully conforms to the interpretation set out in the preamble to those 
rules, and in the letters to EPA referenced above.

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

21. Issue: 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. One comment asserts that Texas law creates defenses to 
violations that are not compatible with EPA's minimum federal 
requirements for state NPDES programs. Specifically, the comment argues 
that States must have authority to seek injunctions for violations and 
to assess or seek civil penalties appropriate to the violation. The 
comment argues that the affirmative defense in TWC Sec. 7.251 creates a 
barrier to that enforcement authority, and is therefore prohibited.
    The comment also asserts that the State application violates 40 CFR 
123.27(b)(2), which requires that ``the burden of proof and degree of 
knowledge or intent required under State law for establishing 
violations under paragraph (a)(3) of this section, shall be no greater 
than the burden of proof or degree of knowledge or intent EPA must 
provide when it brings an action under the appropriate Act.'' In other 
words, State law should not include additional elements of proof for 
civil violations.
    The comment further suggests that approving a Texas program that 
includes TWC Sec. 7.251 countervenes an EPA interpretation set out in a 
1982 settlement agreement with NRDC. Finally, the comment suggests that 
the defenses under Texas law will restrict citizens' ability to file 
citizen suits for violations.
    Response: The comment's major concern appears to be that the 
defenses in TWC Sec. 7.251 are ``inconsistent with federal requirements 
for holding a permittee responsible for the release of pollutants.'' 
EPA raised similar questions during its review of the TNRCC program 
authorization package. In response to those concerns, the State 
provided two clarifications: an addendum to its Attorney General's 
statement and a letter from TNRCC Commissioner Ralph Marquez, both of 
which are included in the administrative record to this action.
    As interpreted by the Texas Attorney General, TWC Sec. 7.251 
provides an affirmative defense under State law only if the event 
causing the discharge was 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, and it would not prevent the imposition 
of penalties for a violation persisting after the original force 
majeure event ceases to be the sole cause of the discharge (e.g., in 
the case of a continuing discharge).
    Under State law, the State of Texas would have the ability to bring 
an enforcement action to address violations when the facility owner or 
operator should have taken steps to prevent the discharge by care and 
foresight, proper planning, or maintenance. For example, if the event 
could have been anticipated--such as a 50-year flood in a 50-year flood 
plain, or the need to provide training on pollution control equipment 
for replacement workers used during a strike-- and the owner did not 
take proper precautions, then the failure to have done so could subject 
the owner or operator to an enforcement

[[Page 51173]]

action.6 The Agency disagrees with the comment's statement 
that ``vandalism can be used as a defense, apparently, even if such an 
action could have been anticipated or if the entity responsible for the 
discharge did not take an appropriate response to the risk of vandalism 
to minimize the size or impact of the discharge.'' Such a scenario 
contemplates a discharge that could have been prevented through proper 
planning and foresight, and the owner or operator's failure to exercise 
that planning or foresight would render the defense unavailable to him.
---------------------------------------------------------------------------

    \6\ These general comments should not be construed as an opinion 
on any specific set of facts, such as in the Crown Central case 
cited in the comment.
---------------------------------------------------------------------------

    The State has also demonstrated that TNRCC has the authority to 
enjoin any discharges or to order the cleanup of those discharges. As 
discussed in EPA's Federal Register notice, the Attorney General's 
Statement explains that TWC Sec. 7.251 does not affect a court's 
authority to issue an injunction to enforce any TWC requirement or 
prohibition, including the requirement that a party comply with any 
permit, rule or order issued by the TNRCC. 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. Thus, the Agency believes that the 
State had demonstrated adequate authority to seek injunctions as 
required in 40 CFR 123.27.
    TWC Sec. 7.251 applies only to actions brought under state law, but 
does not provide a defense to enforcement actions brought by EPA or 
citizens pursuant to the federal CWA. As discussed in the Federal 
Register notice of the TPDES application (63 FR 33662), the federal CWA 
is a strict liability statute recognizing as a defense to liability 
only the federal upset defense (at 40 CFR 122.41(n)), which is a very 
narrow affirmative defense for violations of technology-based effluent 
limitations.
    EPA does not view TWC Sec. 7.251 as a defense to liability under 
the federal CWA, and indeed, the Attorney General has stated that the 
language of Sec. 7.251 will not be placed into TPDES permits. EPA also 
does not view Sec. 7.251 as affecting the burden of proof for 
establishing a violation under State law. The burden of proof is 
unchanged from the federal system, and the elements of proof are 
unchanged. Rather, Sec. 7.251 merely establishes a potential 
affirmative defense under State law. The person asserting the defense 
must assume the burden to plead and prove the defense. This means 
showing that the discharge was caused entirely by other persons or by 
factors over which they had no control, and that the discharge was not 
reasonably foreseeable or preventable. As noted in the Federal Register 
notice, even EPA would rarely seek penalties in such cases.
    As to the comment's assertion that the Texas law is inconsistent 
with an alleged EPA interpretation set out in a 1982 settlement 
agreement with NRDC, without more specific information, EPA has been 
unable to locate this reference. However, as discussed above, the 
interpretation of Texas laws by the Attorney General recognizes that 
the federal CWA is a strict liability statute, and the Texas statute 
does not affect that standard of liability.
    EPA also disagrees that the defenses under Texas law will restrict 
citizens' ability to file citizen suits for violations. As noted above, 
the affirmative defense language of TWC Sec. 7.251 will not be 
incorporated into NPDES permits. Texas could not allow discharges 
disallowed by federal law; accordingly, TWC Sec. 7.251 would not remove 
violations of federal law from the scope of CWA Sec. 505(a). Thus, the 
CWA's citizens suit provision affords those in Texas the same right and 
opportunity to bring citizens suits as those in other States.

Inspections

22. Issue: Inspection Commitments
    Some comments expressed support for the TNRCC inspection strategy, 
stating that inspections should be focused on those facilities not 
meeting permit limitations, and on impaired watersheds. However, others 
State that TNRCC should be required to perform inspections on 100% of 
the ``majors'' and Class I sludge facilities annually. They also state 
that TNRCC does not have adequate resources to inspect the required 
universe of facilities. In addition they State that TNRCC has failed to 
allocate resources to inspect enough CAFOs, pretreatment programs, 
``92-500 minors'' (smaller municipal wastewater treatment plants built 
with federal construction grants authorized under Public Law 92-500), 
and to adequately respond to citizen complaints.
    Response: In Chapter V of the MOA TNRCC states it has the 
procedures and ability in place to inspect the facilities of all major 
dischargers and Class I sludge facilities. TNRCC's statement is 
consistent with 40 CFR 123.26(e)(5). However, EPA's guidance on 
inspection coverage recognizes that minor Permittees may also cause 
significant risks to the environment and human health, and some 
resources may be shifted to inspect them. Any shift in resources must 
be negotiated and agreed upon between EPA and TNRCC annually.
    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. As discussed in more detail below, the TNRCC will also have 
to demonstrate environmental benefits of inspecting other facilities, 
such as, improved compliance of targeted facilities in priority 
watersheds and decreased loadings of pollutants of concern. 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.
    EPA has reviewed the resource allocation for inspections, and 
believes that the 27 existing FTEs (full time equivalent, e.g., one 
person working 40 hours per week or two people working 20 hours per 
week), 12 new FTEs which will be hired following authorization, and 14 
(nine existing and five additional) inspectors dedicated to sludge, 
CAFOs and pretreatment, will be adequate. In discussions with TNRCC 
regarding their July 27, 1998, submittal, TNRCC staff stated that the 
30 inspections referenced assumes there are other activities that the 
staff must perform annually. If these factors were not taken into 
consideration, then inspectors would be able to perform more than the 
indicated 30 inspections per year. The federal regulations do not 
require a State to make specific commitments for CAFO, pretreatment or 
minor inspections. Additionally, in its July 27, 1998, submittal 
providing additional detail, TNRCC indicated that they would inspect 
approximately 24% of the pretreatment facilities in the first year and 
38% in the second year. As part of annual inspection negotiations EPA 
will further discuss the adequacy of these inspection numbers.
23. Issue: Potential Misuse of Annual Inspection List
    Some comments oppose a proposed annual agreement between EPA and

[[Page 51174]]

TNRCC regarding inspection commitments in which an inspection plan 
would be developed that would list the facilities to be inspected 
annually. They believe that such a list would allow the regulated 
community to know which facilities would be inspected annually, thereby 
reducing the incentive for compliance.
    Response: EPA and TNRCC annually work together in developing a list 
of major and minor dischargers which will be inspected. The Agencies 
will continue to do so as described in Chapter V of the MOA. TNRCC 
currently has and will continue to have a notification policy under 
which a facility is notified one to two weeks prior to a State 
inspection. However, any facility that will be inspected by EPA or 
inspected jointly by EPA and TNRCC will not be notified. Further, EPA 
does not agree that the list of facilities to be inspected will be 
known prior to the inspections. Texas Government Code, Chapter 552, 
describes the circumstances under which information can be withheld 
under the Texas Public Information Act. The Texas Attorney General 
makes this decision. This is addressed on Page 6 of the MOA. Under the 
Federal Freedom of Information Act, the list of inspections to be 
performed are considered enforcement confidential and are not released 
to the public.
24. Issue: Discrepancy between MOA and Federal Register Notice 
Regarding Inspection Plan
    One comment noted that there was a discrepancy between the Federal 
Register notice and the MOA regarding the proposed inspection plan. 
Specifically, the Federal Register notice indicated TNRCC would have to 
demonstrate water quality improvements as a result of shifting 
resources from major inspections to minor inspections. The MOA does not 
specifically State this.
    Response: The inspection plan discussed in the MOA will be the 
framework for annual negotiations of a comprehensive enforcement 
agreement between the two agencies regarding the number and type of 
inspections, type of facilities to be inspected, location of facilities 
(watersheds) etc. If TNRCC proposes to shift some inspection resources 
from major to minor dischargers, it must demonstrate to EPA that this 
strategy--in conjunction with other water program efforts set forth in 
their plan--will result in environmental benefits over time, such as 
improved compliance rates of targeted facilities in priority watersheds 
and decreased loadings of pollutants of concern. If over time, these 
efforts do not show such improvements, then EPA and the TNRCC will 
reassess the proper allocation of inspection resources between major 
and minor dischargers as part of the annual inspection plan 
negotiations.

Timely and Appropriate Enforcement

25. Issue: Timely Enforcement
    Some comments assert that TNRCC will not complete enforcement 
actions in a timely manner and has only committed to initiating such 
actions in a timely fashion. While some comments assert that TNRCC does 
have a program that will ensure that timely and appropriate actions 
will be taken, they also note that EPA does not in all cases take 
timely and appropriate action.
    Response: EPA encourages States to adopt its guidance on timely and 
appropriate enforcement actions, however, the federal regulations do 
not require States to adopt EPA guidance. To address EPA's concerns 
with TNRCC in these areas, language is included in the MOA that states 
that in cases where TNRCC cannot meet the timely and appropriate 
criteria in EPA's Oversight Guidance, TNRCC agrees to notify EPA. EPA 
reserves its right to take timely and appropriate enforcement if TNRCC 
fails to finalize its actions in a timely manner (see MOA Part V.E.). 
In cases where EPA believes a formal action must be taken, EPA 
initiates timely and appropriate action. However, there are instances 
when formal action is not appropriate, e.g., facility has returned to 
compliance, facility is on a long-term construction schedule and is 
compliant with the schedule, etc.
26. Issue: Enforcement on Small Businesses
    One comment states that TNRCC has ``not committed to enforce 
adequately against small businesses, given the limitations in Chapter 
2006, Subchapter A of the Texas Water Code.''
    Response: Chapter 2006, Subchapter A of the Texas Government Code 
requires a state agency that is considering adoption of a rule that 
would have an adverse economic effect on small businesses to reduce 
that effect if doing so is legal and feasible. EPA does not find this 
subchapter limits TNRCC's ability to enforce against small businesses. 
Subchapter A of Chapter 2006 does not apply to enforcement actions 
brought against ``small businesses'' as defined by the Texas Government 
Code. There is nothing to indicate the TNRCC is not committed to 
enforcing its statutes, rules, orders, permits, and other 
authorizations no matter the size of the permitted entity.
27. Issue: TNRCC Commitment to Use EPA's SNC Criteria
    One comment stated that TNRCC has not committed to use EPA's 
significant noncompliance criteria (SNC), and has not developed the 
procedures or ability to utilize the national database, the Permit 
Compliance System in a timely manner.
    Response: TNRCC has committed to prepare the Quarterly 
Noncompliance Reports (QNCR) in accordance with the federal regulations 
at 40 CFR 123.45. In order to prepare the QNCR, TNRCC will be required 
to report facilities in reportable noncompliance (RNC), per 40 CFR 
123.45. The more serious (due to magnitude or duration) Significant 
Noncompliance (SNC) violations make up a subset of RNC violations. As a 
result, TNRCC will have to use the SNC definition as SNC facilities in 
Texas will be automatically flagged by PCS. Training of TNRCC staff on 
the operation of PCS has been ongoing, and the Region 6 offices will 
continue to provide necessary training and support after program 
assumption by TNRCC.

TPDES Penalties

28. Issue: Adequate Penalties
    Some comments expressed belief that TNRCC does not have the 
procedures to assess adequate penalties and to collect economic benefit 
gained through the violations. Others state that the TNRCC penalty 
authority is adequate and does ensure that no party gain an unfair 
economic advantage by avoiding noncompliance, but support EPA's right 
to over-file.
    Response: Although EPA urges the states to implement penalty 
authority in a manner equivalent to EPA's, it is not required by the 
regulations or the Clean Water Act. While authority to collect economic 
benefit exists, TNRCC's policy allows for mitigation of penalties to 
zero in some instances. Therefore, there is no guarantee that economic 
benefit, at a minimum, will be collected by TNRCC in all cases. Through 
its oversight role EPA will work with the TNRCC to ensure that the 
penalties collected under the TPDES program are consistent with those 
required by the NPDES program including, where appropriate, the 
collection of an economic benefit. In cases where EPA believes 
appropriate penalties have not been assessed, EPA has reserved its 
right to over-file in accordance with CWA Secs. 309 and 402(i).

[[Page 51175]]

29. Issue: TNRCC SEP Policy
    One comment implied that TNRCC's Supplemental Environmental Project 
(SEP) Policy is inconsistent with EPA's policy.
    Response: TNRCC is not required by regulation or statute to have a 
SEP policy that is equivalent to the EPA policy. In any event, on pages 
6-14 of the TPDES Enforcement Program Description, TNRCC has cited 
potential SEP projects that are comparable to projects that would be 
approved under the EPA policy. In cases where TNRCC approves an 
inappropriate SEP that results in an inadequate penalty, EPA reserves 
its right to over-file in accordance with CWA 309 and 402(i).
30. Issue: Appropriate Penalties
    One comment stated that EPA penalties against builders and 
developers are excessive. In addition they are concerned with EPA's 
ability to over-file because they would ``never really know'' what the 
penalty amounts would be for specific violations.
    Response: The Clean Water Act sets statutory maximum penalties that 
would be used in litigation, and EPA utilizes its Clean Water Act 
Settlement Penalty Policy to calculate the minimum penalty for which 
the Agency would be willing to settle a case. The policy has provisions 
for addressing type of violation, duration, size of business, and 
ability of business to pay a penalty. This penalty policy is applied 
equally to all CWA enforcement including the construction ``industrial 
activity'' category (x) as found at 40 CFR 122.26(b)(14)(x). Due to EPA 
retaining administration of EPA-issued MS4 and storm water general 
permits, TNRCC responsibility for enforcement of the bulk of the storm 
water program will not begin for approximately two years (when the 
first of these permits expires). At that time, EPA will review the 
penalties assessed in these actions as part of its oversight authority, 
to assure that the penalty amounts are adequate to abate violations of 
a permit or permit program (40 CFR 123.27), EPA has reserved its right 
to over-file if they believe an adequate penalty has not been assessed.
31. Issues: Improper Barrier to Recovery of Penalties Where Violator 
Gained Economic Benefit From Violation
    One comment alleged that the Texas audit privilege act establishes 
an improper barrier to recovery of penalties for violations where the 
violator gained an economic benefit from the violations.
    Response: 40 CFR 123.27(a) and (c) require the State to have the 
authority to recover civil penalties for violation of any NPDES permit 
condition, filing requirement, regulation, or order as well as to 
assess civil penalties which are appropriate to the violation. Section 
10(d)(5) of the Texas Audit privilege act [Tex. Civ. Statute art. 
4447cc (1998)] allows recovery of civil or administrative penalties for 
``substantial economic benefit which gives the violator a clear 
advantage over its business competitors.'' This language will enable 
Texas to obtain civil penalties appropriate to the violations, 
including those resulting in a substantial economic benefit. For those 
dischargers engaged in business competition, the law would also require 
proof of clear advantage deriving from that economic benefit. Under 
section 10(g) of the law, the enforcement authority does not bear the 
burden of proof concerning exceptions to immunity stated in section 
10(d).
32. Issue: Improper Barrier to Recovery of Penalties for Continuous and 
Repeat Violations
    One comment expressed concerns that the Texas audit privilege act 
would impose barriers to recovery of penalties for continuous and 
repeat violations.
    Response: There is no civil or administrative penalty immunity 
under Texas Civil Statutes Article 4447cc if the disclosure ``has * * * 
repeatedly or continuously committed significant violations, and * * * 
not attempted to bring the facility or operation into compliance, so as 
to constitute a pattern of disregard of environmental [law].'' To show 
a ``pattern,'' the entity must have ``committed a series of violations 
that were due to separate and distinct events within a three-year 
period at the same facility or operation.'' By its terms, this 
provision provides Texas with authority to address continuous 
violations and repeat violations. Texas also retains authority to 
address all violations by issuing administrative or judicial consent 
orders and by seeking penalties for any subsequent violation of such 
orders.

Independent Applicability of Water-Quality-Based Limits

33. Issue: Application of Water Quality Standards for Discharges Not 
Subject to a Technology-Based Effluent Guideline
    Several comments supported EPA's conclusion that TNRCC had the 
authority, and had actually committed to apply water-quality based 
effluent limitations regardless of whether or not there was a 
promulgated technology-based effluent guideline for a particular 
discharge. However, these comments also stated that there was no 
objection to EPA and TNRCC clarifying this issue in the MOA.
    Response: EPA appreciates the support expressed by the comments and 
repeats the Agency's position for the benefit of those members of the 
public that did not review the June 19, 1998, Federal Register notice. 
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 (emphasis 
added). 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 was 
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, the 
following language is included in Section IV.B of the MOA:

    ``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 will function in a manner 
consistent with EPA's interpretation of the requirements of the CWA and 
its implementing regulations.

TPDES Resource Needs

34. Issue: Generic Comments on Adequacy of TNRCC Resources
    Some comments stated belief that TNRCC had provided adequate 
information to address funding issues. Other comments expressed concern 
over TNRCC's ability to run their TPDES program without the use of 
federal funds. They also claimed that TNRCC had not adequately 
demonstrated that

[[Page 51176]]

they had sufficient resources or staffing to assume the program on the 
day of program assumption.
    Response: Pursuant to the requirements of 40 CFR 123.22(b), the 
State of Texas submitted 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. That submittal 
indicated that 217 full time employees would be tasked with different 
aspects of the program, and that $12.3 million in funding would be 
available to run the program. Prior to the comment period on the 
proposed TPDES program, the Agency received letters from two concerned 
parties suggesting that more detail was needed to fully understand how 
the personnel and funds set out in the Texas application were to be 
used. EPA agreed that it would be helpful to understand more fully such 
information and, thus, asked the State to provide additional detail (63 
FR 33664).
    The State did so in comments submitted at the public hearing on the 
proposed State program approval on July 27, 1998, and made copies 
available to many of the attendees. The State's comments were also made 
available on July 28, 1998, at both the TNRCC and EPA offices. EPA 
further took the step of sending copies of the State submittal to all 
persons who had attended the public hearing or who had commented on the 
State program. To allow time for any additional comment on the resource 
question, the Agency extended the comment period on that single issue 
from August 10 until August 24, 1998.
    Chapters 2, 6, 7, and Appendix 7-A, of the Program Description 
provided detailed information on TNRCC's organizational structure, 
positions, projected costs, and sources of funding, including a 
projection of enforcement resource needs. TNRCC has acknowledged, on 
page 8 of the MOA, that it is their responsibility after program 
approval to run and manage the TPDES, Pretreatment and Sewage Sludge 
programs with or without the assistance of Federal funding. The Federal 
regulations require States seeking program approval to submit an 
itemization of the sources and amounts of funding, ``including an 
estimate of Federal grant money,'' expected to be available for the 
first two years of program administration (40 CFR 123.22(b)(3)); the 
State of Texas has provided this information.
    EPA has reviewed the resources TNRCC will devote to the TPDES 
program, the staffing requirements and qualifications, and the training 
necessary to utilize existing staff to operate the program on day one, 
and determined that TNRCC has the capacity to administer the program 
upon assumption. As part of EPA's oversight responsibilities, the 
agency will monitor the resources TNRCC is devoting to the TPDES 
program to ensure compliance with the regulatory requirements for a 
state-run program.
35. Issue: Under-Funding of TNRCC's Permitting Program
    Several of the comments contend that the water quality permitting 
program is woefully underfunded. In its August 27th comments, the State 
provided an explanation of how the resources dedicated will be 
marshaled to administer the NPDES program.
    Response: In its July 27 letter, the TNRCC discussed with great 
specificity why the resources described in Chapter 7 of its application 
would be sufficient to administer the NPDES program in Texas. In 
Exhibit A of that letter, the TNRCC used ``the number of [permit] 
applications processed'' as the most accurate measure of the work they 
could process. Looking at the prior ten-year period, the TNRCC found 
that an average of 727 applications were processed each year, not 
including NPDES permits processed for EPA under a Federal grant. While 
noting that permit applications in some areas of the State (principally 
central Texas) had increased, TNRCC expected the total number of 
permits required state-wide would remain relatively constant. TNRCC 
pointed to the workload-leveling effect of its basin permitting rule 
and its intent to expand use of general permits as justification for 
this assumption. Based on the total number of permits, they estimate 
approximately 651 permit renewals per year. Using these figures, the 
TNRCC concludes that it has adequate staff to handle the needs of the 
NPDES program:

    ``Assuming that the permitting universe will remain static at 
3256 permits [given the movement toward issuing general--rather than 
individual--permits and other reasons set out by TNRCC], TNRCC 
predicts that an average permit writer would need to be responsible 
for processing 30 renewal permits each year (65121.5). Ample 
staffing is available to additionally process incoming new or 
amendment requests, since an existing staff of 18.5 has historically 
processed an average of 39 permits/person/year (72718.5).'' 
(July 27, 1998, letter, Exhibit A.)

    The TNRCC went on to explain that new personnel positions in 
several categories have been funded in order to carry out the NPDES 
program. Taken together, the information provided by the State appears 
to demonstrate adequate resources to implement the NPDES program in 
Texas.
    As a sub-point, a comment expresses concern that the application 
does not account for the resources necessary to process the 
approximately 3,000 NPDES applications now pending at EPA Region 6 that 
are to be transferred to the State. In response, as the comment 
concedes, it is somewhat unfair to ask the State to show readiness to 
pick up an entire program prospectively and to demonstrate that it can 
eliminate a backlog not of its own creation; other states seeking 
authorization have not been asked to make such a showing. However, it 
is EPA's understanding that Texas does plan to eliminate the backlog 
over the course of one permitting cycle (five years). Under the status 
quo pre-authorization, every discharger that has (or should have) a 
Federal NPDES permit has (or should have) a water permit under State 
law. Thus, as the State proceeds to renew or issue permits (in 
accordance with the State watershed priority system approved by EPA), 
it will in effect replace two permits (one State and one Federal) with 
one State-issued TPDES permit. The TNRCC explained its plan to address 
the EPA backlog as follows:

    ``In effect, EPA has allowed a situation where a significant 
number of discharges were never authorized under NPDES. These 
applications are to be passed to TNRCC for processing. This load of 
applications is assumed to equate to applications for the same 
discharges also received by the state. As TNRCC works on its own 
applications, it will also be combining the workload and eliminating 
EPA's backlog.'' (July 27 letter, Exhibit A., p.2)

36. Issue: Workload Analysis
    Some public comments argued that States must provide a detailed 
workload analysis as required by EPA guidance.
    Response: EPA agrees that its guidance asks that States set out 
their resources in the form of a workload analysis; however, this is 
not a requirement of statute or regulation. In any event, the State 
provides a workload analysis in response to EPA's request for 
additional detail on the application. (See July 27 letter, Exhibit D.)
37. Issue: Future Resources for Storm Water Program
    One comment expressed concern that TNRCC does not currently have 
resources to operate the storm water program in Texas and has not 
``laid out any clear plan for obtaining them over a specified period of 
time.'' This comment also expressed concern that TNRCC would not 
immediately have adequate resources for inspection of

[[Page 51177]]

storm water permittees they will administer upon authorization. In 
response to EPA's request for public input on future resource needs, 
TNRCC submitted comments that contained an acknowledgment that 
additional resources will be needed when EPA-issued storm water general 
permits and municipal separate storm sewer system permits expire and 
administration transfers to the State. TNRCC pointed out that the Texas 
legislature has already authorized increases in permit fees, contingent 
upon NPDES authorization. TNRCC also stated in its comments that ``* * 
* appropriations for the storm water permitting program elements 
initiated in fiscal year 2001 will be an exceptional item request in 
the TNRCC LAR [legislative appropriations request] for 2000-2001.''
    Response: At the time of program assumption, EPA will only transfer 
administration of those storm water discharges included as part of an 
individual industrial permit to TNRCC. EPA will continue to administer 
discharges authorized under municipal separate storm sewer permits and 
storm water general permits for some time after program authorization. 
Administration of discharges covered by EPA's multi-sector storm water 
general permit transfers by October 1, 2000. Administration of 
discharges covered by EPA's construction storm water general permit 
transfers by July 6, 2003. Administration of discharges covered by 
EPA's permits for the nineteen municipal separate storm sewer systems 
in Texas starts to transfer in 2000, but most of these permits will not 
expire until 2003. Therefore, TNRCC will not need additional resources 
for permitting and enforcement on storm water-only discharges right 
away. Since administration passes at the time each storm water permit 
expires, or earlier if TNRCC issues a replacement permit, TNRCC's 
permit fee program would be available to provide resources. Under 
TNRCC's current procedures for conducting inspections, storm water 
outfalls at industrial facilities (the permits that would transfer to 
TNRCC at program authorization) are routinely included in the overall 
inspection of the facility.
    EPA also notes that while, as with any governmental agency, TNRCC 
is dependent on funding by a legislature that has sole power on 
appropriations, it has committed to seek additional resources for these 
resource needs. On August 19, 1998, the TNRCC formally adopted its 
Legislative Appropriations Request (LAR) for the 2000-2001 biennium. 
Included is a request for additional appropriation authority for full 
State implementation of the NPDES storm water program using the 
existing permitting options available to TNRCC. For FY 2000, TNRCC has 
requested $3.4 million and 58 additional positions. For FY 2001, the 
request increases to $4.2 million and a total of 80 positions. These 
staffing levels and budget estimates are based on the existing 
limitations in State law regarding the use of general permits for storm 
water discharges (which could easily exceed the current 500,000 gallons 
per day cap allowed for a general permit issued by TNRCC under TWC 
Sec. 26.040). Both agencies understand that this initial request is 
subject to change if the current statutory limits on the use of general 
permits are removed or modified.
38. Issue: Statements to the Legislature
    Several comments assert that TNRCC's statements seeking additional 
funding for deficient parts of the Water Quality Program (which the 
comment describes as ``core elements of the NPDES/TPDES program'') 
demonstrate that the proposed TPDES program is underfunded.
    Response: In TNRCC's letter of July 27, the TNRCC explains that 
wastewater permitting is only one of the State's water resource 
programs, and that permitting discharges covered by NPDES is only part 
of the wastewater permitting program (other water programs include the 
development of surface water standards, water quality assessment, 
modeling, etc.). According to TNRCC, the legislative initiative 
referred to by the comments ``related to other aspects of the [the 
State's] water programs,'' other than TPDES.
    With specific regard to the NPDES program, the State indicated that 
``the funding and positions (44 FTEs) had already been determined and 
authorized by the Legislature''; the reference to the NPDES program, 
and the 44 new FTEs associated with it, was included to make clear that 
the resource needs for the water quality programs were in addition to 
the resources already authorized for NPDES.
    The TNRCC letter also points out that the testimony before the 
State legislature expressed a lack of financial support that affects 
the agency's ability to fulfill its statutory responsibilities at 
``optimal levels,'' not its ability to run its water programs at levels 
that meet federal standards. Virtually all agencies--including EPA--
frequently make the case for additional resources without implying that 
they are not performing their duties on an acceptable level.
39. Issue: Resources Beyond 2 Years
    Some comments assert that more detail is required on those 
resources that will be required to run the storm water program, 
administration of which will pass to Texas in the fall of the year 
2000. Others allege that despite the fact that TNRCC has not yet 
submitted its legislative appropriations request for 2000-2001, the 
TNRCC should have submitted at least reasonably detailed projections of 
wastewater permitting, data management and field inspection resource 
needs for FY 2000, which the comment sees as the second year of any 
TPDES program that could be authorized at this point.
    Response: The federal regulations only require the State to provide 
information on the first two years of the program--i.e., FY 1999 and FY 
2000. See 40 CFR 123.22. The State submitted a complete package on May 
5, 1998, triggering EPA's statutory review period which was to end on 
August 3, 1998.7 The State provided resource information for 
the two fiscal years running from September 1, 1998 to August 31, 1999, 
and from September 1, 1999 to August 31, 2000. The federal regulations 
do not require States to submit resource data for more than two years.
---------------------------------------------------------------------------

    \7\ By letters dated July 10, 1998, and July 28, 1998, EPA and 
TNRCC agreed to extend the deadline by which EPA must make a final 
decision on the State's request for approval of the TPDES program 
until September 1, 1998. In an August 31, 1998, letter from Jeffery 
Saigas, TNRCC Executive Director, to Gregg Cooke, EPA Regional 
Administrator, the TNRCC agreed to give EPA additional time (until 
September 14, 1998) to complete its approval review.
---------------------------------------------------------------------------

    For the ``out years'' (more than two years after approval), as EPA 
noted in the June 19 Federal Register notice, the State will need to 
provide adequate resources for this period in a timely manner, and the 
State (in its July 27 letter) expressed the intention to do so. 
Specifically, the TNRCC indicated that it would seek--above and beyond 
the base budget of FY 1999, which already includes some increases--
appropriation authority for administration of storm water permits in FY 
2001. (If a state were to fail to ensure adequate resources to 
administer an authorized program, there could be potential grounds for 
program withdrawal under 40 CFR 123.63.)
40. Issue: Resources for Laboratory Chemists
    One comment stated that TNRCC does not have an adequate number of 
laboratory chemists to perform TPDES program functions, and provides no 
details on the personnel and positions.

[[Page 51178]]

    Response: TNRCC provided information on the allocation of resources 
for the laboratory in Figure 2-1, Tables 1 and 2, of the Program 
Description, which shows the staffing level for the laboratory will be 
nine chemists, one laboratory manager, and one Quality Assurance 
Specialist. The description of these personnel and positions are 
included in Appendix 7-A and 7-B of the Program Description. EPA finds 
that this level of laboratory support does not prevent the TPDES 
program from functioning, especially since laboratory services could 
also be contracted out, if necessary due to intermittent surges in 
demand.
41. Issue: Comparisons with Other State's Program Resources
    One comment states that TNRCC has a much higher facility to FTE 
ratio than either Louisiana or Oklahoma, and that this indicates the 
TPDES program is underfunded.
    Response: As discussed above, EPA does not agree that the TPDES 
program is underfunded at this time. In addition to the facility to FTE 
comparison, EPA also reviewed the resource allocations for the 
enforcement program by job functions such as inspections and compliance 
monitoring. As stated in the response to comments regarding inspection 
commitments, EPA believes that the 27 existing FTEs for inspections, 
the 12 new FTEs which will be hired following authorization, and 14 
inspectors dedicated to sludge, CAFOs, and pretreatment, will be 
adequate to run the NPDES inspection program. EPA did however, have 
some concerns regarding the adequacy of FTEs allocated for compliance 
monitoring activities and as a result, requested additional information 
from TNRCC. In TNRCC's July 27, 1998, submittal of additional detail, 
TNRCC indicated that in addition to the seven FTEs already available 
for compliance monitoring, they had three FTEs that could provide 
additional support if needed. EPA agrees with the comment that the 
facility to FTE ratio is higher in Texas than in Louisiana and in 
Oklahoma, but based on the original submittal, the July 27, 1998 
clarification, and the fact that only about 54.5% of the minors, 94.6% 
of the 92-500 minors, and 52.7% of the major facilities will be 
transferred to TNRCC within the first two years, EPA believes that 
TNRCC will have the capacity to administer the program for the first 
two years.
42. Issue: Adequacy of Resources for Compliance Monitoring
    One comment alleges that TNRCC analyzed the adequacy of its 
resources for ``compliance monitoring'' on the basis of only doing 
reporting for majors, significant minors and 92-500s, or approximately 
718 facilities. The comment notes that compliance monitoring functions 
must be performed, however, for all NPDES permits for which TNRCC takes 
action, and that TNRCC, therefore, seriously understated the universe 
of facilities that the reporting staff must cover.
    Response: NPDES states are only required to track majors, 92-500 
minor facilities, and significant minors in PCS. TNRCC has indicated in 
their July 27, 1998, submittal that they have three additional 
positions available that can be used for compliance monitoring 
functions. Based on the July 27, 1998, submittal and the original 
package, EPA has determined that TNRCC has the capacity to perform 
compliance monitoring on those facilities which they will receive 
during the first two years.

Funding Sources Available for the TPDES Program

43. Issue: Funds Raised From Increased Permit Fees
    Some comments indicate encouragement regarding the State 
Legislature's support for increased funding for the TPDES Program 
through an increase on the annual cap related to wastewater fees. 
Others commented that any increases in fees should be related to 
services actually rendered to that permittee.
    Response: EPA can only require that the TPDES program be adequately 
funded. Choices as to the sources of the fund, e.g., general revenue 
taxes, permit fees, etc., are at the discretion of the Texas 
Legislature. It would be neither appropriate, nor constitutional, for 
the federal government to dictate exactly how a State government must 
fund its State programs. TNRCC also has the authority to raise fees 
assessed on numerous permittees who currently pay a fee far below the 
$25,000/year cap set by the Texas Legislature, should federal grant 
funds decrease substantially.
44. Issue: Funds for Water Quality Programs
    Some comments also expressed concerns that a permit fee-based 
funding mechanism would not adequately account for increased funding 
needs related to general water quality programs which are not tied 
directly to a single permit.
    Response: The TPDES application and associated supplemental 
documentation is reflected in TNRCC's application for FY 99 funding in 
support of its overall water quality program. Much of this funding is 
expected to be obtained through TNRCC's Performance Partnership Grant 
(PPG). Commitments associated with the PPG are included in TNRCC's FY 
99 Performance Partnership Agreement (PPA). The PPA is a carefully 
negotiated document which is designed to be consistent with all 
statutes, regulations, and formal agreements associated with affected 
programs. Accomplishment of commitments included in the PPA and 
achievement of environmental results related to those commitments is 
reported by TNRCC and tracked by an oversight team at EPA. Any 
identified problems are addressed through renewed negotiation and 
appropriate follow-up actions.

Environmental Justice

45. Issue: Concerns Regarding Environmental Justice in Implementation 
of the TPDES Program
    A few comments raised the issue of environmental justice. One 
comment asserted that EPA has failed to carry out its legal 
responsibilities under the President's Executive Order on Environmental 
Justice (E.O. 12898) in that EPA did not consider the impacts of 
approval of Texas' application on minority and low-income communities. 
This same comment also noted E.O. 12898 is based on Title VI of the 
Civil Rights Act, and that EPA has promulgated regulations implementing 
Title VI. Another comment asserted E.O. 12898 requires EPA to reject 
Texas' NPDES application, unless TNRCC can demonstrate that it has 
``made environmental justice part of its mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health and environmental effects of its programs, policies, and 
activities on minority populations and low-income populations. * * *'' 
(E.O. 12898, Sec. 1-101).
    Response: EPA is committed to upholding the principles of 
environmental justice contained in the President's Executive Order on 
Environmental Justice and to ensuring compliance with Title VI of the 
Civil Rights Act, as amended, by recipients of EPA assistance. EPA 
believes that it has carried out its legal responsibilities and 
maintains that it has advocated environmental justice to the full 
extent of its legal authority in this action. EPA notes that nothing in 
the Clean Water

[[Page 51179]]

Act, E.O. 12898, or Title VI of the Civil Rights Act requires the 
Agency to reject Texas' application for lack of an environmental 
justice program. As one comment noted, the Clean Water Act and EPA's 
implementing regulations do not require that a State have a specific 
program or method for addressing environmental justice issues. Thus, 
EPA may approve a program that lacks an environmental justice program 
entirely. EPA has encouraged TNRCC to include an environmental justice 
program as part of its proposed TPDES program. In a letter dated 
February 6, 1998, TNRCC indicated that it did have an environmental 
justice program, although that program is not a part of the TPDES 
application.
    Additionally, EPA notes that the obligations of E.O. 12898 to make 
``environmental justice part of its mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health and environmental effects of its programs, policies, and 
activities on minority populations and low-income populations * * *'' 
apply to Federal agencies, not the TNRCC, as was suggested by one 
comment. (E.O. 12898, Sec. 1-101). Furthermore, the obligations of E.O. 
12898 are to be implemented in a manner consistent with, and to the 
extent permitted by, existing law. The Executive Order does not, by its 
own terms, create any new rights, benefits, or trust responsibility, 
substantive or procedural. (E.O. 12898, Secs. 6-608, 6-609). Thus, EPA 
cannot go beyond the authority granted to it by the Clean Water Act in 
making its decision to approve or reject Texas' proposed program.
    Finally, as one comment noted, EPA has promulgated Title VI 
implementing regulations that prohibit the recipients of EPA assistance 
from using criteria or methods of administering federally funded 
programs in a manner that results in discriminatory effects based on 
race, color, or national origin. See, 40 CFR Part 7. Also, EPA can 
provide TNRCC help in complying with the non-discrimination provisions 
of Title VI of the Civil Rights Act. These implementing regulations 
also set forth the process by which aggrieved parties may file 
complaints with the EPA. This is the proper process to by which to 
address individual claims under Title VI.

Other Statutory and Legal Issues

Issue: TNRCC Authority Over Discharge of Pollutants
    One comment asserted that Texas lacks the authority to prohibit the 
range of discharges that are prohibited under federal law. In 
particular, the comment argues that Section 26.121(a) of the Texas 
Water Code does not enable TNRCC to prohibit discharge of pollutants 
that do not (1) qualify as sewage or recreation, agricultural, or 
industrial wastes or (2) qualify as ``other waste,'' within the meaning 
of Section 26.121(b), because they do not meet the definition of 
``pollution'' found in Section 26.001 of the Texas Water Code. Section 
26.001 defines ``pollution'' to mean ``the alteration of physical, 
thermal, chemical, or biological quality of, or the contamination of, 
any water in the State that renders the water harmful, detrimental, or 
injurious to humans, animal life, vegetation, or property or to the 
public health, safety or welfare, or impairs the usefulness or the 
public enjoyment of the water for any lawful or reasonable purpose.'' 
The comment argues that the showing of harm, detriment, or injury 
required by this definition impermissibly renders the scope of the 
Texas discharge prohibition less expansive than required by federal 
law.
    Response: EPA agrees that the definition of ``pollution'' found in 
Section 26.001 of the Texas Water Code renders the prohibitions found 
in Section 26.121(a) of the Code less expansive than federally 
required; however, Texas has resolved this problem by enacting revised 
Sections 26.001 and 26.121 that take effect upon NPDES program 
authorization. The revised Section 26.121 contains a subsection (d) 
that states:

    ``Except as authorized by the commission, no person may 
discharge any pollutant, sewage, municipal waste, recreational 
waste, agricultural waste, or industrial waste from any point source 
into any water in the state.''

    While the sewage and waste definitions remain unchanged, the 
revised Section 26.001 adds a definition of ``pollutant'' (as opposed 
to ``pollution'') that matches, almost word-for-word, our definition of 
``pollutant'' found at 40 CFR 122.2. Accordingly, Section 26.121(d) of 
the Texas Water Code enables Texas to prohibit the full scope of 
pollutants that Texas must be able to prohibit under federal law.
46. Issue: Conflicts of Interest
    One comment contended that ``Texas does not meet the requirements 
for conflicts of interests and other ethical limitations for TNRCC 
decision-makers for NPDES programs.'' The comment also specifically 
asserted that the appointment of Rafael B. Marquez as Commissioner of 
the Texas Natural Resource Conservation Commission by Governor George 
Bush on May 1, 1995, was not, or is not, in compliance with Federal 
requirements for State programs.
    Response: Section 304(i)(2)(D) of the Clean Water Act and 40 CFR 
123.25(c) constitute the Federal authorities for the proposition that 
no State board or body with authority to approve permit applications 
shall include (or will include at the time of approval of the State 
permit program) as a member any person who receives, or who has 
received during the past two years, a significant portion of his income 
directly or indirectly from permit holders or applicants. Specifically, 
40 CFR 123.25(c) states:

    ``State NPDES programs shall ensure that any board or body which 
approves all or portions of permits shall not include as a member 
any person who receives, or has during the previous two years 
received, a significant portion of income directly or indirectly 
from permit holders or applicants for a permit.''

    EPA's analysis of the Texas Water Code, specifically Sections 
5.052, 5.122, 5.053, 5.054, 5.059 and 5.060, as well as 30 TAC 50.33 
satisfies the Agency that the State has met the Federal conflict of 
interest requirements. Specific attention was given to the appointment 
of Rafael B. Marquez as Commissioner of the Texas Natural Resource 
Conservation. TWC Sec. 5.053(b), which is effective upon authorization 
of NPDES permit authority, states:

    ``In addition to the eligibility requirements in subsection (a) 
of this section, persons who are appointed to serve on the 
Commission for terms which expire after August 31, 2001, must comply 
at the time of their appointment with the eligibility requirements 
established under 33 U.S.C. Sections 1251-1387, as amended.''

    The terms of all Commissioners currently appointed to the TNRCC 
expire on or before August 31, 2001. However, only Commissioner Marquez 
was not subject to the current conflict of interest rule at the time of 
his appointment. Commissioner Marquez was appointed and confirmed in 
May, 1995 and during that calendar year received a significant portion 
of his income from Monsanto Company, his former employer and a permit 
holder. Since 1995, Commissioner Marquez has received no portion of his 
income from a permit applicant or a permit holder. Therefore, more than 
two years have passed since a potential conflict of interest could have 
existed. Accordingly, we believe the provisions of Section 304(i) of 
the Clean Water Act have been satisfied in that more than two years 
have passed since Commissioner Marquez last received

[[Page 51180]]

significant income from a permit holder. His first participation in the 
TPDES process will take place after a two-year period in which he 
received no portion of his income from a permit applicant or a permit 
holder. Furthermore, since his term expires prior to August 31, 2001, 
the provisions of Section 5.053(b) of the Texas Water Code regarding 
compliance ``at the time of * * * appointment'' are inapplicable as to 
Mr. Marquez. It should also be noted that, under Section 5.054, 
Commissioners may be removed for failure to maintain the qualifications 
required for their appointment.
    The State of Texas has provided other assurances that the Federal 
conflict of interest provisions will be carried out. Commissioners' 
standards of conduct are set forth in Chapter 572 of the Texas 
Government Code, which requires personal financial disclosure and 
prohibits conflicts of interest. These safeguards closely resemble 
Federal standards of conduct and set forth similar procedures for 
oversight and reporting.
    EPA Region 6 has also received the Texas Attorney General's opinion 
regarding conflict of interest issues associated with the contemplated 
assumption of NPDES authority by the State of Texas. Based on this 
opinion, and our own assessment, we are satisfied that no conflict of 
interest exists.
47. Issue: Improper Partial Phased Program
    Some citizens and organizations commented that the proposed TPDES 
partial program is improperly ``phased.'' The comments reach this 
conclusion by arguing that (1) the Texas program, although partial, 
would not be a ``major category partial program'' within the meaning of 
subsection 402(n)(3), and (2) the program, although not a ``major 
component partial program'' within the meaning of subsection 402(n)(4), 
would still be phased.
    The comments first assert that the program would be partial because 
it would not cover those discharges regulated by the Texas Railroad 
Commission. Nonetheless, the comments contend that the program would 
not meet the requirements of subsection 402(n)(3) because it would not 
cover all discharges within the jurisdiction of TNRCC. In particular, 
the contention is that the proposed Texas program does not cover 
discharges from CAFOs into play as, certain Municipal Separate Storm 
Sewer System (MS4) discharges, and storm water discharges associated 
with industrial activity.
    Next, the comments contend that the program would not meet the 
requirements of 402(n)(4) because TNRCC does not commit to assume 
jurisdiction over the discharges regulated by the Texas Railroad 
Commission. Nonetheless, the comments also assert that the Texas 
program would still be phased. They contend that various alleged 
inadequacies in TNRCC authority and resources leave the agency with no 
choice but to phase-in parts of the proposed program.
    Response: CWA Sec. 402(n)(3) allows EPA to approve a ``major 
category partial permit program,'' while authorization of a ``major 
component partial permit program'' is permissible under CWA 
Sec. 402(n)(4). A major category partial permit program is commonly 
called a ``partial program'' and CWA 402(n)(3) describes that a State 
(or agency of a state) may apply for that portion of the NPDES program 
for which it has jurisdiction, as long as it reflects all of that 
agency's jurisdiction, and includes a significant number of the point 
source categories regulated under NPDES. A major component partial 
permit program [CWA 402(n)(4)] is commonly called ``phased'' because it 
allows a State to take that portion of the NPDES program for which it 
has jurisdiction, so long as it commits and sets forth a plan for 
obtaining authority to regulate (consistent with CWA) the rest of the 
point source categories under the CWA within a 5-year period. These two 
options were included in the CWA to allow states like Texas, with more 
than one agency regulating categories of point sources, to apply for 
NPDES program authorization for at least one of its agencies, and 
follow, either in the phased approach, or completely separately, its 
other regulatory agencies. Since the program described by Texas in its 
application covers all discharges subject to the NPDES program that are 
under the authority of the TNRCC, the TPDES program is a ``major 
category, partial permit program'' (i.e., partial) and not a ``major 
component partial program'' (i.e., phased).
    The Texas application does describe a program for the regulation of 
CAFO, storm water, and all wastewater discharges under the authority of 
the TNRCC. Texas describes the processes for issuing and enforcing all 
permits in the program description and makes the necessary commitments 
to issue needed general and individual permits in the MOA (see Part 
III.A of the MOA). Moreover, the Texas program would not categorically 
exclude coverage of any class of CAFO discharges. The language in the 
Federal Register Notice describing the Texas program application was 
merely intended to indicate that EPA believed that there was the 
potential (discussed in the response to specific comments on this 
issue) that certain CAFOs that began operation prior to July 10, 1991, 
could fall outside the authority of the TNRCC. The Agency's intent was 
merely to provide notice to the public that any such CAFOs would remain 
under the jurisdiction of EPA. Accordingly, the Agency believes that 
the program described in the TPDES application covers all discharges 
within the jurisdiction of the TNRCC and, therefore, qualifies as a 
major category partial permit program under subsection 402(n)(3).
    Nonetheless, the comments assert that the Texas program would be 
impermissibly phased because TNRCC allegedly (1) lacks the resources 
and staff, and (2) has failed to issue general permits necessary to 
administer parts of the described program. Subsection 402(n)(4) of the 
Act provides that a State regulatory agency may phase into its program 
permitting authority for those types of point source discharges over 
which it does not yet have jurisdiction. While the TNRCC has agreed 
under 40 CFR 123.1(d)(1) that EPA would retain jurisdiction to 
administer particular storm water permits that have already been 
issued, TNRCC proposes to immediately assume permitting authority over 
all types of point source discharges within its jurisdiction. The fact 
that the EPA has retained jurisdiction to administer certain storm 
water permits that have already been issued does not mean that the 
State Program is ``phased'' the State Program would be ``phased'' 
within the meaning of subsection 402(n)(4) only if it proposed to 
assume jurisdiction to issue permits for an entire class of point 
source discharges at some date after program approval. Under 30 TAC 
281.25, Texas adopted by reference 40 CFR 122.26, requiring NPDES 
permits for storm water discharges. As noted above, TNRCC would have 
the authority to issue permits for all types of point source discharges 
within its jurisdiction on the date of program approval; accordingly 
the program, although partial, would not be phased.
48. Issue: TNRCC Emergency Orders and Temporary Orders
    One comment included examples of how TNRCC has, and uses, the 
authority to issue temporary or emergency orders under TWC Chapters 5 
and 26 to authorize discharges in excess of permit limitations or where 
there is no permit to authorize a discharge. The comment

[[Page 51181]]

noted that under federal law, a discharge cannot be made except in 
compliance with the authorization granted by a permit. The comment 
expressed concern that such orders would authorize what would otherwise 
be a violation of an existing permit and could be used to authorize a 
discharge without following the procedures and requirements for permits 
(including requiring compliance with technology and water quality 
standards). The comment further indicated that such actions by Texas 
would eliminate reporting requirements for violations of the original 
permit (limiting availability of information to the public) and would 
also ``immunize'' a violator from a citizen suit for the violation.
    Response: On July 3, 1998, Texas proposed regulations implementing 
TWC, Chapter 5, Subchapter L, concerning temporary and emergency orders 
(23 TexReg 6899). EPA has reviewed these proposed regulations and has 
found them to be consistent with requirements to authorize the TPDES 
program. Specific restrictions on the use of temporary and emergency 
orders to anticipated bypasses in the TPDES program, consistent with 
CWA requirements, have been continued in the proposed revisions to 30 
TAC 35.303. Under 30 TAC 305.21 (Consolidated Permits), TNRCC would 
also have the authority to allow temporary or emergency orders for 
discharges to waters--subject to the restrictions of the 30 TAC 35.303 
section on water quality permits. TNRCC will only use emergency orders 
to provide authorization for bypasses which meet the conditions of 40 
CFR 122.41. Any other use of emergency or temporary orders would be 
outside the scope of an approved program.
    The comments may have been the result of concerns related to 
provisions in the proposed regulations, which provide TNRCC authority 
in other programs, to ``* * * by these orders issue temporary permits 
or temporarily suspend or amend permit conditions.'' Also, in the past, 
temporary and emergency orders have been used, or proposed for use, in 
the pre-TPDES State water quality permitting program for purposes such 
as an emergency order authorizing discharge of contaminated non-process 
wastewater at pollutant levels exceeding permit limitations from an 
ammonium phosphate and ammonium thiosulfate fertilizer manufacturing 
plant in Pasadena (TNRCC Docket No. 98-0320-IWD); and a temporary order 
authorizing the discharge of storm water associated with industrial 
activity from a steel manufacturing and fabrication facility in Morris 
County (TNRCC Docket No. 97-0746-IWD). As a result of the specific 
restrictions in 30 TAC 35.303 that become effective upon TPDES program 
authorization, TNRCC is aware that its authority to issue emergency and 
temporary orders cannot be used under the TPDES program in all 
situations allowable under the pre-TPDES State permitting program. 
While TNRCC has used temporary and emergency orders in the past to 
authorized discharges in ways that could not be allowed under the NPDES 
program, EPA and TNRCC agree that procedures under the new TPDES 
program must be consistent with federal requirements. EPA therefore 
believes that the existing rules and finalization of the proposed 
rules, and use of temporary and emergency orders by TNRCC in the 
context of the TPDES program will be consistent with the CWA.
    With regard to the comment's expressed concerns regarding the 40 
CFR 123.29 (and CWA Sec. 402(a)(5)) prohibition on a State issuing a 
permit when EPA objects, EPA would like to point out that emergency 
orders authorizing bypasses of TPDES facilities will not be permits, 
but temporary emergency exceptions to the enforcement of some TPDES 
permit conditions. EPA agrees that the State may not issue a TPDES 
permit over the objection of EPA, but as discussed above, TNRCC will 
not have the authority to issue permit-type discharge authorizations 
via emergency or temporary orders under the TPDES program.
49. Issue: Identification of Discharges Not Under TNRCC Jurisdiction
    One comment stated that TNRCC must provide identification of 
discharges not in TNRCC jurisdiction. The comment insisted that TNRCC 
list all permitted facilities which EPA permits but the State does not, 
and further explain why each such facility is not permitted under 
TNRCC's program. It was stated that this information is necessary to 
understand the division of jurisdiction between EPA and TNRCC with 
respect to CAFO discharges, discharges from oil and gas related 
industries, and radioactive waste.
    Response: TNRCC is not required to provide such lists for approval 
of the TPDES program, and in fact EPA believes the request to be 
onerous and unnecessarily burdensome. The MOA clearly states which 
Standard Industrial Classification (SIC) codes are not within the 
regulatory authority of TNRCC (regulated by the Texas Railroad 
Commission). As previously stated, neither EPA nor TNRCC is aware, at 
this time, of a CAFO facility which is not subject to TNRCC authority. 
Additionally, EPA has very limited authority over radioactive wastes 
under NPDES. TNRCC has at least the same authority to regulate those 
wastes now addressed in the NPDES permits. TNRCC's authority in this 
area is discussed in the MOA and in Chapter II, page 2-5, of the TPDES 
application. EPA believes TNRCC's authority over CAFOs, oil and gas 
facilities and radioactive waste discharges is adequately described. In 
order to ensure that permittees are not confused about their NPDES 
regulatory authority after this authorization, EPA is providing 
separate notice by letter to the regulated facilities affected by this 
authorization, notifying each of its status under either EPA or 
transfer to TNRCC authority. EPA does not believe there is any matter 
of division of authority that must be resolved before TNRCC can be 
approved.
50. Issue: TNRCC Using EPA Guidance and Policy Only to Extent it Does 
Not Conflict With State Law or Policy
    One comment expressed concern that Section III.A.7 of the MOA 
states that ``TNRCC will utilize EPA national and regional policies and 
guidance to the extent there is no conflict with Texas statutes, a 
specific State policy, or guidance adopted by TNRCC.'' The comment 
stated that this was backwards in that Texas was required to 
demonstrate equivalency with the federal requirements.
    Response: Since policies and guidance are not legal requirements, 
TNRCC's is not bound to follow them exactly. For example, EPA has a 
policy that the application requirements for large and medium municipal 
separate storm sewer systems contained in 40 CFR 122.26(d) were 
intended to apply only to first-time permit issuance, and less 
information is required for permit re-issuance. While TNRCC will be 
following this EPA policy, if State law separately and specifically 
requires all this information, TNRCC could not legally ignore State law 
simply to follow an EPA policy. A State's right to have requirements 
more stringent or extensive than those of in the federal NPDES program 
is recognized in 40 CFR 123.1(i).
51. Issue: TNRCC Authority To Assume Existing NPDES Permits
    One comment indicated that TNRCC had no authority to assume or 
enforce EPA's permits and particularly had no authority to adopt or 
enforce an EPA-issued general permit that did not limit

[[Page 51182]]

discharges to the 500,000 gallons per day limit imposed on TPDES 
general permits.
    Response: 30 TAC 305.533 specifically provides for the State to 
adopt EPA-issued permits and pretreatment programs upon assumption of 
the TPDES permit program. This conforms with common practice in the 
NPDES State authorization process for a State and EPA to make 
arrangements in the MOA for the State to assume responsibility for EPA-
issued permits. (See 40 CFR 123).
    EPA does agree that the current limitations on maximum discharges 
that can be authorized under a general permit issued by TNRCC could 
affect the manner in which NPDES general permits transferred to the 
State for administration will be handled at their expiration. TNRCC 
will be notifying dischargers authorized under the EPA-issued general 
permits it assumes that their authorization to discharge in excess of 
500,000 gallons per day will not be available under the replacement 
TPDES general permit, when it is issued, and they will need to apply 
for coverage under an individual permit should they need authorization 
for discharges over that amount. The general permits with the most 
potential to be authorizing discharges exceeding 500,000 gallons per 
day are the storm water general permits that EPA will be administering 
until they expire (or earlier if replaced by a TPDES permit). As 
discussed in responses to comments on program resources for the storm 
water program, TNRCC has requested the additional resources to 
administer the storm water program using individual permits due to the 
500,000 gallons per day limitation on its authority regarding general 
permits.
52. Issue: Appropriateness of EPA's Completeness Determination
    Several comments asserted that additional information provided in 
comments submitted by TNRCC on July 27, 1998, indicate that the TPDES 
application was not complete at the time of EPA's completeness 
determination on May 7, 1998.
    Response: Contrary to the assertion of these particular comments, 
EPA does not view the supplemental detail provided by the State to call 
into question the completeness of the State's application. There is a 
distinction between the ``completeness'' of the application and the 
``approvability'' of the application. On May 7, 1998, the Agency 
determined that Texas' February 5, 1998 program approval request (as 
supplemented by additional information received on February 12, March 
16, April 15, and May 4), constituted a complete package under 40 CFR 
123.21, i.e., one containing all the element necessary for EPA to make 
a decision on approvability. That package included a chapter on 
resources to run the program (Chapter 7), with numbers of State 
employees and funds that would be devoted to the running of the 
program. Thus, there was information on resources, but members of the 
public (and then EPA) asked for additional detail on the source of 
these funding resources and the precise use of personnel so that a more 
informed decision could be made about the sufficiency of those 
resources--the approvability question.
    The structure of the federal regulations themselves makes clear 
that the completeness determination is distinct from the approvability 
determination. The regulations first require a decision as to whether 
or not a package has been received that includes all required elements 
(the Governor's letter, program description, Attorney General's 
statement, applicable State laws and regulations, etc.), as required at 
40 CFR 123.21(a). Once EPA decides that the State Program submission is 
complete, the statutory review period ``for formal EPA review of a 
proposed State Program under CWA'' shall be deemed to have begun (40 
CFR 123.21(b)(1)). EPA then embarks on a second decision as to whether 
the complete package should be approved. This distinction between the 
completeness determination and the approvability determination is also 
discussed in EPA guidance.
    The regulations go on to provide that if, during the statutory 
review period, there is a ``material change'' in a package previously 
determined to be complete, then the statutory review period shall begin 
again upon receipt of the revised information (40 CFR 123.21(c)). This 
is consistent with generally accepted principles of notice-and-comment 
rulemaking. See Section 553(b)-(d) of the Administrative Procedure Act, 
5 U.S.C.A. Sec. 553(b)-(d); Paralyzed Veterans of America v. West, 138 
F.3d 1434 (1988); Asiana Airlines v. FAA, 328 US App. D.C. 237, 134 
F.3d 393 (1988); National Electric Mfrs. Assn. v. EPA, 321 US App. D.C. 
319, 99 F.3d 1170 (1996); Fertilizer Inst. v. US EPA, 290 US App. D.C. 
184, 935 F2d 1303 (1991). However, EPA does not view the clarifications 
submitted by Texas as constituting a material change in the 
application. The additional detail provided was merely corroborative of 
the original application--the number of persons assigned to the 
proposed TPDES program did not change, and the amount of funding did 
not change. The dollars specified in the tables are different, but only 
to reflect changes made by TNRCC (unrelated to TPDES) in initiating 
career ladders, etc. EPA and the public were simply afforded a deeper 
understanding of the direction and management of those resources by the 
applicant State agency.
53. Issue: Appropriateness of Basing Approval Decision on Information 
Received During the Public Comment Period
    One comment argued that ``EPA must make its authorization decision 
on the materials in the application, not on some new information 
submitted by TNRCC after the comment period has begun.''
    Response: EPA does not agree. On its face, the comment appears to 
suggest that EPA is limited in its consideration to only the 
application, and may not consider any information that came in during 
the comment period; such a reading would negate the purpose of the 
comment period and cannot be correct. Further, it is not correct that 
EPA can consider the comments of all members of the public other than 
the State. The State is perhaps the most directly affected member of 
the public on this application, and has a great deal of information and 
insight into the application package that might be helpful to EPA in 
reaching a decision and avoiding erroneous interpretations (especially 
of TNRCC statements); EPA believes strongly that the State, like every 
other part of the public, is welcome to file comments on this notice of 
a proposed program. Indeed, here--as in almost every such case--the 
Agency specifically asked the State and other interested parties to 
comment on the many issues at stake in the approval 
decision.8
---------------------------------------------------------------------------

    \8\ See, e.g., 63 FR at 33662 (``EPA will consider all comments 
on the TPDES program and/or its approval in its decision''); 63 FR 
at 33664 (``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 * * *.'').
---------------------------------------------------------------------------

    If, as the comment suggests, the receipt of mere clarifying 
comments (like those provided by the TNRCC) act to require the 
restarting of the statutory review period and a new 45-day public 
comment period, then the Agency and the public would be faced with a 
never-ending do-loop of notice and comment periods. As the courts have 
recognized in the context of notice-and-comment rulemakings, an agency 
must be able to learn from the comments it receives without facing the 
peril of starting a new round of comment. International

[[Page 51183]]

Harvester Co. v. Ruckelshaus, 478 F.2d 615, 632 n. 51 (D.C. Cir. 1973); 
City of Stoughton, Wis. v. U.S. EPA, 858 F.2d 747, 753 (D.C. Cir. 
1988). Here, the Agency concluded that the clarifying information was 
not a material change in the application; however, because the Agency 
had alerted the public that the additional details might be important 
to the final decision, EPA did provide interested parties an additional 
opportunity to provide comment to the Agency on that information. 
Whereas a 45-day comment period had been provided for public review of 
the entire 4106-page application, members of the public had up to 27 
days (for those at the public hearing) or up to 14 days (those notified 
only by mail) in which to submit comments on the 20 pages of detail 
provided by the State. EPA believes that this procedure gave all 
interested parties a fair and ample opportunity to review the State's 
clarifying information on resources.
54. Issue: Use of Surface Waters as Treatment Units Under State Law
    Several comments contend that EPA should disapprove the TPDES 
program because the universe of surface waters protected by Texas law 
is allegedly narrower than the universe protected by CWA. According to 
these comments, TNRCC allows some operators to use impoundments of 
naturally occurring waters and isolated waters (e.g., playa lakes for 
waste treatment purposes). They contend that the CWA prohibits such 
uses of ``waters of the United States'' and that Texas's permitting 
practices allow dischargers to avoid imposition of appropriate 
regulatory controls. They claim EPA should require TNRCC to adopt 
enforceable regulations prohibiting the use of waters of the United 
States for waste treatment systems and procedures for identifying and 
correcting its past errors in allowing such use; several specific 
examples of such alleged errors were provided.
    Response: As a practical matter, all NPDES permitting agencies must 
distinguish between waste treatment systems and protected waters. 
Otherwise, they could not identify the physical location at which 
effluent limitations apply. For this reason, EPA's definition of 
``waters of the United States'' at 40 CFR 122.2 excludes ``waste 
treatment systems'' even though some of those systems have 
characteristics similar to protected waters. With one exception 
identified below, the comment's description of TNRCC's regulatory 
practices appears consistent with that exclusion.
    The comment incorrectly assumes CWA affirmatively prohibits 
conversion of waters of the United States to waste treatment systems, 
perhaps because a portion of 40 CFR 122.2, as codified, appears to 
prohibit such conversions. That portion of the regulation has been long 
suspended. See 45 FR 48680 (July 21, 1980). Currently, nothing in CWA 
Sec. 402 or EPA's implementing regulations per se prohibits using 
impounded portions of naturally occurring surface waters as waste 
treatment systems or, as sometimes occurs, using an entire isolated 
water body as a waste treatment system. Construction of improvements to 
convert waters of the United States to waste treatment systems 
frequently requires an authorizing permit issued under CWA Sec. 404, 
however, and may also be subject to regulation under State or local 
laws, such as TWC Chapter 11 prohibition on impoundment or diversion of 
State waters unless permitted.
    EPA has promulgated no regulations and little guidance on 
distinguishing waste treatment systems from waters of the United 
States. Whether or not a particular discharge is to a waste treatment 
system or a water of the United States may occasionally thus raise 
issues for resolution in permit or enforcement actions under NPDES 
programs. In In re Borden Inc., Colonial Sugars, 1 EAB 895, 908-912, 
NPDES Appeal No. 83-8 (September 25, 1984), for instance, EPA rejected 
a discharger's claim that an unimpounded portion of a swamp was a 
``waste treatment system'' in a permitting action, holding that 
segregation of waste from the surrounding environment during treatment 
was an indispensable condition for waste treatment. TNRCC has a 
definition of waste treatment system in 30 TAC Chapter 307. EPA has no 
reason to believe TNRCC's lack of detailed guidance on waste treatment 
systems will render it unable to resolve such issues in TPDES permit 
actions.
    EPA acknowledges that difficult issues may arise from application 
of the waste treatment system exclusion to playa lakes (a.k.a. 
``playas'') under both federal and State law. In their natural state, 
playas are frequently ephemeral and hydrologically separated from other 
surface waters. Under the CWA, isolated intrastate waters like playas 
are ``waters of the United States'' only if their ``use, degradation, 
or destruction could affect foreign,'' a factor which renders federal 
jurisdiction over them case-specific (40 CFR 122.2). Many playas 
possess the requisite commerce nexus, but those that lack it are not 
generally subject to regulation under the CWA. Moreover, an entire 
playa which would otherwise be a water of the United States may, under 
some circumstances, be considered a waste treatment system, rendering 
discharges to that playa beyond the ambit of CWA Sec. 301(a) (but 
sometimes subjecting them to regulation under other authority, e.g., 
the Resource Conservation and Recovery Act). Determining whether a 
specific playa lake is a water of the United States or a waste 
treatment system is thus a highly case-specific undertaking requiring 
substantial judgment on the part of a permitting or enforcement 
authority. See, e.g., 58 FR 7610, 7620-7621 (February 8, 1993).
    As pointed out in the comment, there was a time when Texas viewed 
playas as privately owned waters not subject to regulation under TWC, 
even though the definition of ``waters in the State'' at TWC 
Sec. 26.001 and ``Surface water in the state'' at 30 TAC 307.2(40) were 
(and are) plainly broad enough to encompass isolated waters. Since 
1990, however, the State has interpreted that statutory definition as 
encompassing playas. Because Texas requires no interstate or foreign 
commerce nexus, its assertion of permit jurisdiction over playas is 
arguably broader than CWA's. Its current ``Playa Lake Policy 
Statement'' (Appendix 3-E of the Program Approval Request), moreover 
suggests TNRCC will not regard ``new discharges of industrial and 
municipal wastewater to playa lakes not previously authorized to be 
used as wastewater treatment or retention facilities before July 10, 
1991'' as discharges to waste treatment systems, a factor which 
arguably renders the State's policy more protective of the ecological 
values and functions of natural playas than CWA and EPA regulations.
    In one somewhat limited situation, however, TNRCC may be able to 
afford less permit protection to playas than EPA. As pointed out by the 
comment, TWC Sec. 26.048 prohibits TNRCC from regulating animal feeding 
operation discharges to playas which commenced before the State 
asserted jurisdiction over them, an apparent legislative attempt to 
minimize potential disruption arising from changes in the State's 
jurisdictional views. EPA considers such State laws in its own case-
specific decisions on whether or not a given playa is a waste treatment 
system, but they are not necessarily a controlling factor. See 58 FR 
7621. Hence, TNRCC may be statutorily prohibited from regulating some 
animal feeding operation discharges to playas which EPA would find 
subject to regulation under CWA. Section III.B.8 of the EPA/TNRCC MOA 
addresses this potential problem, essentially providing that EPA will 
continue to regulate

[[Page 51184]]

discharges from concentrated animal feeding operations to playa lakes 
which are waters of the United States when TNRCC lacks jurisdiction to 
apply the TPDES program to them. Regulation of such discharges is not a 
part of the TNRCC program EPA has approved in accordance with CWA 
Sec. 402(n)(3). The comment provided examples of specific situations in 
which TNRCC has apparently applied a waste system treatment exclusion. 
In this response, EPA Region 6 is not determining whether or not those 
specific applications were consistent with CWA or TWC. They may warrant 
further consideration in future TPDES actions, however.
55. Issue: Statutory Limitations on TPDES General Permits
    Both the regulated community and public interest groups expressed 
concerns over the impact of TNRCC's current lack of authority to issue 
general permit authorizing more than 500,000 gallons per day. Those in 
the regulated community were primarily concerned with the impact this 
would have in effective and timely permitting of storm water and CAFO 
discharges, which, depending on rainfall and size of a facility, could 
easily require authorization for more than 500,000 gallons of runoff in 
a single day. The lack of resources to write individual permits for 
storm water discharges and larger CAFOs and the resulting impact on 
TNRCC's other permitting activities was a major concern for public 
interest groups. Other limitations on TNRCC's current general permit 
authority, especially the requirement for 30 days advance notice of 
intent to be covered by a TPDES general permit was a particular concern 
for developers and the construction industry.
    Response: EPA agrees that the current limitations on TNRCC's 
general permit authority placed on it by statute could hamper effective 
implementation of especially the storm water program. This is one of 
the primary reasons that EPA agreed to retain administration of storm 
water permits that it had already issued at least until they expire. 
This will give Texas the time to choose how to best administer the 
storm water permitting program. For example, Texas could choose to 
provide TNRCC with the resources that would be required to issue 
individual permits to the large number of storm water discharges in a 
timely manner. Alternatively, Texas could choose to change the statutes 
limiting TNRCC's general permit authority; creating the option to 
reduce the resources that TNRCC would need for the large number of 
storm water discharges by allowing the use of the typically more 
efficient and faster general permit mechanisms.
    While EPA prefers to handle storm water discharges with general 
permits, Texas is not required to do so, provided all discharges are 
regulated one way or the other. Once Texas has assumed administration 
of the NPDES program, it is required to fully implement and adequately 
fund the approved program. Texas has made this commitment in Section 
III.B.1. of the MOA which states: ``It is recognized that it is the 
TNRCC's responsibility after program approval to run and manage the 
TPDES, Pretreatment, and Sewage Sludge Programs with or without the 
assistance of federal funding.'' So long as these objectives are fully 
met, EPA has no authority to tell Texas that it cannot choose to use 
individual permits in lieu of general permits. Likewise, EPA cannot 
preclude TNRCC from requiring a shorter (i.e., more restrictive) Notice 
of Intent period for its general permits (see 40 CFR 123.1(i)(1)).
56. Issue: Failure to Require Texas To Acknowledge EPA Interpretations 
of the Audit Privilege Act in its Application for NPDES Authorization
    One comment asserted that EPA should have required TNRCC to 
explicitly agree to EPA's interpretation of the Texas Audit privilege 
act in its application for NPDES authorization.
    Response: This comment does not make clear what EPA interpretations 
of the Texas audit privilege act [Tex. Civ. Statute art. 4447cc (1988)] 
the State must acknowledge in its NPDES authorization application. 
Texas has submitted a Statement of Legal Authority for the Texas 
National Pollutant Discharge Elimination System Program (including the 
March 13, 1998, supplement) (Texas Legal Statement) and related program 
implementation documents. These documents describe the content of the 
Texas audit privilege act as well as the process by which EPA and the 
State discussed needed changes to the 1995 Texas audit privilege act, 
which were ultimately enacted by the Texas Legislature in 1997. The 
Texas Legal Statement certifies that Texas law (including the audit 
privilege act) provides the State with adequate authority to operate 
the NPDES program, and EPA agrees that the state law can reasonably be 
read as providing the State with such authority. Further, EPA can 
correct any problems which may arise in the implementation of needed 
authorities through its oversight role once an NPDES program is 
authorized. Under federal law, as explained above, EPA can take 
independent action to address any violations that are dealt with 
inadequately by the State, and can reconsider its approval of any 
program should the state prove unable to enforce federal requirements.
57. Issue: Improper Barrier to Criminal Enforcement/Investigations
    One comment asserted that Texas law placed an improper barrier on 
criminal enforcement and investigation.
    Response: 40 CFR 123.27(a) and (b) require the State to have 
specified authority to seek criminal remedies, including criminal 
fines. The amended Texas law does not impose barriers to criminal 
enforcement or impair the State's ability to use audit information in a 
criminal investigation or proceeding. The 1995 Texas audit privilege 
act was specifically amended in 1997 to limit application of the 
privilege to ``civil or administrative proceedings,'' which cannot 
reasonably be read as encompassing criminal investigations. 
Furthermore, new section 9(b) of the law removes any limit on the 
state's ability to review any information that is required to be made 
available under federal or state law prior. Those requirements 
encompass virtually all information that is relevant to program 
operation, leaving the state with ample authority to conduct both civil 
and criminal investigations without the encumbrance of a prior hearing 
to determine whether or not the material can be viewed.
58. Issue: Improper Barrier to Emergency Orders/Injunctive Relief
    One comment asserted that Texas law established an improper barrier 
to emergency orders and injunctive relief.
    Response: 40 CFR 123.27(a) requires the State to have the authority 
to restrain immediately unauthorized activities which are endangering 
or causing damage to public health or the environment and to seek in 
court to enjoin any threatened or continuing violation of any program 
requirement. Neither the original 1995 Texas law nor the 1997 
amendments have any impact on the State's ability to issue emergency 
orders or obtain injunctive relief. Section 10 of the law provides 
immunity from administrative and civil penalties, and the definition of 
``penalty'' in section 3(a) excludes the concept of injunctive 
authority. Furthermore, section 10(b) does not extend immunity to 
situations which pose an imminent and substantial risk of serious 
injury or harm to human health or the environment, as provided. As 
noted above, Texas can obtain access to all information required to be 
made available.

[[Page 51185]]

59. Issue: Limits on TNRCC's Ability to Review of Certain Audit 
Documents (No Authority to Copy or Use Information)
    One comment asserted that the Texas Audit privilege act improperly 
limited the ability of TNRCC to copy or use information in audit 
documents.
    Response: Section 402(b) of the Clean Water Act, 33 U.S.C. 1342(b), 
requires the State to have the authority to inspect, monitor, enter, 
and require reports to the same extent as EPA under section 308 of the 
Clean Water Act, 33 U.S.C. 1318. See also 40 CFR 123.26. Section 
8(a)(1) of Texas's law provides that privilege does not apply to 
``information required by a regulatory agency to be collected, 
developed, maintained, or reported under a federal or state 
environmental * * * law.'' This exclusion applies to information, 
including data, required to be collected, developed, maintained, or 
reported to the State or the public. Section 9(b) of the Texas statute 
also gives the State the opportunity ``to review information that is 
required to be available under a specific state or federal law * * *'' 
The review does not waive the existing privilege for this information. 
The Texas law, however, also contains relevant constraints on this 
narrow privilege. Section 7(a)(3) makes the privilege unavailable where 
``appropriate efforts to achieve compliance with the law were not 
promptly initiated and pursued with reasonable diligence after 
discovery of noncompliance'' so that access is provided to information 
needed to verify such compliance. Section 5(d) also allows persons who 
participate in the audit and observe physical events of noncompliance 
to testify about those events.
    Thus, in general under the Texas law, the State may review, obtain, 
and use required information. In limited circumstances, however, where 
the information is not required to be collected, developed, maintained, 
or reported, but is otherwise required to be made available, the State 
may still obtain access to that information.
60. Issue: Improper Barrier To Access Evidence To Determine Whether 
Violations Have Been Corrected
    One comment asserted that the Texas Audit privilege act placed 
improper barriers to accessing evidence to determine whether violations 
discovered during a self-audit had been corrected.
    Response: Section 402(b) of the Clean Water Act, 33 U.S.C. 1342(b), 
requires the State to have the same authority to inspect, monitor, 
enter, and require reports to the same extent as EPA under section 308 
of the Clean Water Act, 33 U.S.C. 1318. In particular, section 308 
provides EPA with broad authority to inspect, monitor, enter, and 
require reports to verify compliance with Clean Water Act effluent 
limitations and standards. In addition, 40 CFR 123.25(a) requires the 
State to have the authority to issue and to administer the program 
consistent with specific permitting requirements, including 
requirements of 40 CFR 122.41 to allow the permitting authority access 
to determine compliance. See also 40 CFR 123.26. Section 8(a)(1) of 
Texas's audit privilege act provides that privilege does not apply to 
``information required by a regulatory agency to be collected, 
developed, maintained, or reported under a federal or state 
environmental * * * law.'' Section 9(b) of the statute gives the State 
the opportunity ``to review information that is required to be 
available under a specific state or federal law * * *.'' The Texas 
Legal Statement also certifies that the State has the authority to 
apply recording, reporting, monitoring, entry, inspection, and sampling 
requirements. (See page 15 and following.) These aspects of Texas law 
provide the State with adequate authority to access evidence to 
determine whether or not violations have been corrected.
61. Issue: Improper Barrier to Public Participation in State 
Enforcement Due to Privilege Afforded to Information Required To Be 
Made Public
    One comment asserted that the Texas audit privilege act's 
limitations on what information regarding the audit was required to be 
made public placed improper barriers to public participation in State 
enforcement actions.
    Response: As discussed above, section 8(a)(1) of Texas's law 
provides that privilege does not apply to ``information required by a 
regulatory agency to be collected, developed, maintained, or reported 
under a federal or state environmental * * * law.'' This exclusion 
applies to information, including data, required to be collected, 
developed, maintained, or reported to the State or the public. Section 
9(b) of the Texas statute also gives the State the opportunity ``to 
review information that is required to be available under a specific 
state or federal law * * *.'' The review, however, does not expressly 
waive the existing privilege for this information. The Texas law, 
however, also contains relevant constraints on this narrow privilege. 
Section 7(a)(3) makes the privilege unavailable where ``appropriate 
efforts to achieve compliance with the law were not promptly initiated 
and pursued with reasonable diligence after discovery of 
noncompliance.'' Section 5(d) also allows persons who participate in 
the audit and observe physical events of noncompliance to testify about 
those events. Section 9(c) of the Texas law gives the public the right 
to obtain any information in the State's possession required to be made 
available under federal or Texas law, irrespective of whether or not it 
is privileged under Texas law.
62. Issue: TNRCC Has Not Determined Who Has Used the Law or How it Has 
Affected TNRCC Enforcement
    One comment asserted that TNRCC had not determined who had used the 
Texas Audit privilege act or assessed its effect on TNRCC enforcement.
    Response: A condition precedent to obtaining immunity from civil 
penalty, is to provide notice to the TNRCC of the intent to conduct an 
audit. This notice must precede the audit. TNRCC then makes a record of 
this notice and makes this information available to the public upon 
request. Furthermore, when a company intends to disclose violations 
discovered in an audit, this is provided to TNRCC in the form of a 
second notice. TNRCC also records this information and makes this 
available to the public if requested. TNRCC maintains an inventory of 
these two notices in the form of an ``Environmental Audit Log'' which 
is updated monthly and, upon request, is mailed to individuals who ask 
to be added to the mailing list for this log.
    EPA does not receive information specific to how TNRCC is or is not 
tracking the impact of this law on enforcement. The State is, however, 
conducting an audit of general enforcement and has included steps to 
review impacts of the audit privilege act. Caroline Maclay Beyer of the 
TNRCC is the contact for this audit in the Office of Internal Audit. 
This audit should be complete and a report should be available for 
public review in early September 1998. This is an issue which EPA may 
address, as appropriate, in oversight of the Texas NPDES program.
63. Issue: TNRCC Direction to Employees to Not Seek Audits Due to Risk 
of Criminal Sanctions
    One comment alleged that TNRCC had instructed its employees not to 
seek access to audits because of fears that such request would result 
in criminal liability under the Texas Audit privilege act.
    Response: The TNRCC guidance document on audits states that no 
employee should request, review, accept, or use an audit report during 
an

[[Page 51186]]

inspection without first consulting the Legal-Litigation Division.
64. Issue: Limitations on Whistleblower Protections
    One comment asserted that the Texas Audit privilege act restricted 
whistleblower protection afforded employees under Federal Law.
    Response: Section 6(e) of the Texas audit privilege act, as added 
in 1997, provides as follows: ``Nothing in this section shall be 
construed to circumvent the protections provided by Federal or state 
law for individuals that disclose information to law enforcement 
authorities.'' Thus, it preserves all employee disclosure protections 
currently afforded under state or federal law. Federal law protects 
individuals who report violations or illegal activity, or who commence, 
testify or assist in legal proceedings from liability, criminal 
prosecution, or adverse employment actions. See 33 U.S.C. Sec. 1367 
(CWA). In addition, federal disclosure protection provisions have been 
interpreted so broadly as to include employee disclosures to local 
authorities, the media, citizens' organizations, and internal employee 
disclosures to the employer. See e.g., Dodd v. Polysar Latex, 88-SWD-4 
(Sec'y Sept. 22, 1994); Helmstetter v. Pacific Gas & Electric Co., 91-
TSC-1 (Sec'y Jan.13, 1993); Nunn v. Duke Power Co., 84-ERA-27 (Sec'y 
July 30, 1987); Poulos v. Ambassador Fuel Oil, 86-CAA-1 (Sec'y Apr. 27, 
1987); Wedderspoon v. City of Cedar Rapids, Ia., 80-WPC-1 (Sec'y July 
28, 1980). Thus, under section 6(e), all of these federal protections 
remain.
65. Issue: Improper Procedures for Review of the Texas Application
    Some comments contend that EPA violated the procedures set forth in 
the CWA and EPA regulations by engaging in predecisional negotiations 
with the TNRCC over certain aspects of the State Program. The comments 
argue that these predecisional negotiations created an unreasonable 
barrier to public participation in the authorization process.
    Response: Section 402(b) of the CWA requires EPA to approve a 
State's request for NPDES authorization provided the State has 
appropriate legal authority, procedures, and resources to meet the 
requirements of the Act. The regulatory requirements for State Program 
approval, including the procedures EPA must follow in approving or 
denying a State's request, are set out at 40 CFR Part 123. 40 CFR 
123.21 requires a State to submit to EPA a program submission 
containing certain specified elements. Within 30 days of receiving such 
a submission, EPA is required to notify the State as to whether or not 
the State's submission is complete (any material change in the States' 
submission restarts the clock). If EPA declares the submission 
complete, EPA has 90 days from the date of receipt of the State's 
submission to make a decision as to whether to approve or disapprove 
the program. Once a submission is declared complete, 40 CFR 123.61 
requires EPA to publish notice of the State's request for program 
approval in the Federal Register, provide a comment period of not less 
than 45 days, and provide for a public hearing to be held within the 
State not less than 30 days after notice is published in the Federal 
Register. EPA must approve or disapprove the State's program based on 
the requirements of the CWA and Part 123, and taking into consideration 
all comments received.
    EPA has followed all of the procedures set forth by the CWA and EPA 
regulations in making a decision on the State of Texas' application for 
approval of the TPDES program. EPA finished its completeness review 
within 30 days of receipt of the last material change in the State's 
application, published the proposed program for a 45-day public comment 
period in the Federal Register, and held a public hearing in Austin, 
Texas, on July 27, 1998, more than 30 days after publication of notice 
of the hearing in the Federal Register. It is true that, following the 
State's submittal of the program approval application, EPA continued to 
ask questions of the State (e.g., citations to State law) and seek 
clarifying information (e.g., further details on the management of 
dedicated resource), and as a result, clarifications have been provided 
by the State to EPA. However, there is nothing in either the CWA or 40 
CFR Part 123 which prohibits such an ongoing exchange of information 
between EPA and a State seeking NPDES authorization. Open communication 
between EPA and the State regarding questions of State law or policy is 
critical to EPA's ability to make an informed and accurate decision on 
authorization. Such communication also plays an essential role in 
helping States meet the requirements of the CWA and 40 CFR Part 123, 
thereby enabling EPA to authorize states in accordance with Congress' 
intent that states be primarily responsible for administering the NPDES 
program. The procedures followed by EPA Region 6 in reviewing the State 
of Texas' application were consistent with the procedures used by the 
Region in reviewing applications submitted by the States of Arkansas, 
Louisiana and Oklahoma, and did not preclude the public from 
participating in the process. The State's final application, including 
any changes or supplements submitted as a result of discussions with 
EPA, was noticed in the Federal Register, and the public was given 
ample opportunity to comment, both in writing and at the public hearing 
held on July 27, 1998. Moreover, as discussed earlier, interested 
parties were given an additional opportunity of up to four weeks to 
comment on the State's July 27th clarifications regarding information 
on programmatic resources.
66. Issue: Improper Conditional Approval
    Some comments note that States are required to have the statutory 
and regulatory authority necessary to implement the NPDES program in 
place and lawfully adopted at the time of authorization, and argue that 
EPA should disapprove the TPDES program because the TNRCC does not 
currently have the regulatory authority to administer the program for 
which it seeks authorization. The comments contend that EPA does not 
have the authority to ``conditionally approve'' the program, contingent 
on promises of future legislation.
    The comments base this argument on a contention that although Texas 
indicates that it intends to regulate some discharges by general permit 
or rule, it does not currently have in place any general permits or 
adequate permits by rule. In addition, these comments argue that 
because TNRCC has the authority to issue general permits only for 
discharges less than 500,000 gallons in any 24-hour period, TNRCC 
cannot assume administration of EPA-issued general permits. Further, 
the comments contend that even if TNRCC did have the authority to 
assume administration of EPA-issued permits, it would not have 
authority to enforce those permits.
    Response: EPA does not propose to ``conditionally approve'' the 
TPDES program, contingent on promises of future legislation. Section 
402(b) of the CWA requires that all of the authorities listed under 
that section must be in full force and effect before EPA may approve a 
State Program. The authorities listed under Section 402(b) include, 
among other things, the authority to issue permits which apply, and 
insure compliance with, applicable requirements of the CWA. As noted on 
page 4 of the Texas Attorney General's Statement, State law gives the 
TNRCC the authority to issue permits for the discharge of pollutants by 
existing and

[[Page 51187]]

new point sources to the same extent as the permit program administered 
by EPA, with the exception of those discharges not within the TNRCC's 
regulatory jurisdiction. See TWC Sec. 26.027 (Text of section effective 
upon authorization of NPDES permit authority), which provides that the 
TNRCC may issue permits for the discharge of waste or pollutants into 
or adjacent to water in the state, and TWC Sec. 26.121(d) (Text of 
section effective upon authorization of NPDES permit authority, which 
provides that any such discharge not authorized by the Commission is a 
violation of the Code).
    In addition, as discussed on pages 6 and 7 of the Attorney 
General's Statement, TWC Sec. 26.040 gives TNRCC authority to issue 
general permits. Section 26.040 also allows the TNRCC to continue to 
authorize some discharges by permits by rule. The fact that TNRCC 
states in the MOA that it may exercise this general permitting 
authority at some point in the future is not, in EPA's view, a 
violation of CWA Sec. 402(b). If for some reason, the permitting of 
these discharges by general permit turns out to be inappropriate, TNRCC 
still has the authority, as required by Sec. 402(b), to issue 
individual permits for these discharges (See Attorney General's 
Statement at page 7). Nothing in the CWA requires a State to permit by 
general permit.
    With regard to the contention that TNRCC cannot assume 
administration of EPA-issued general permits because TNRCC has the 
authority to issue general permits only for discharges less than 
500,000 gallons in any 24-hour period, EPA disagrees. 30 TAC 305.533 
specifically provides that TNRCC adopts all EPA permits. While it is 
true that Texas Water Code 26.040 precludes TNRCC from issuing general 
permits for discharges of more than 500,000 gallons in any 24-hour 
period, this does not preclude TNRCC from assuming EPA's general 
permits covering discharges over 500,000 gallons as part of the 
assumption of the NPDES program. After the EPA-issued permits expire, 
TNRCC will be required to issue individual permits to those facilities 
that are not eligible for TNRCC-issued general permits.
    Finally, as to the comments' argument that, even if TNRCC did have 
the authority to assume administration of EPA-issued permits, it would 
not have authority to enforce those permits, the TNRCC's authority to 
enforce EPA-issued permits is discussed in detail later in EPA's 
response to comments.
67. Issue: Authority to Regulate Discharges Such as Storm Water by 
Individual Permit
    Some comments contend that TNRCC does not have the regulations 
necessary to regulate discharges such as storm water by individual 
permit.
    Response: In 30 TAC 281.25(4), TNRCC adopted by reference EPA's 
storm water regulations found at 40 CFR 122.26.
68. Issue: Authority To Enforce EPA-Issued Permits
    Some comments argue that EPA should disapprove the TPDES program 
because the TNRCC lacks the authority to enforce EPA-issued NPDES 
permits. The comments argue that the Texas Water Code gives the TNRCC 
the authority only to enforce permits ``issued by the commission,'' and 
that, as a result, TNRCC does not have the authority to assume primary 
enforcement authority over certain permits already issued by EPA, as 
provided for in the proposed MOA. These comments also contend that 
TNRCC cannot enforce the federal general permits for CAFOs and storm 
water, which EPA assumes to be the same issue.
    Response: 30 TAC 305.533 states that on the date of TNRCC's 
assumption of the NPDES permit program, the State adopts all EPA 
permits, except those over which EPA retains jurisdiction as specified 
in the MOA. Section 305.533 was adopted under the authority of TWC 
Sec. 26.121, under which discharges to surface water are prohibited 
except by authorization of the TNRCC. Such ``authorization of the 
TNRCC'' is not limited to permits issued by the TNRCC. Sections 5.102 
and 5.103 of the Texas Water Code authorize the TNRCC to adopt rules 
necessary to carry out its powers and duties and to perform any act 
necessary and convenient to exercise its powers under the Water Code 
and other laws. This includes permits issued by EPA, including federal 
general permits for CAFOs and storm water. The TNRCC has authority 
under Chapters 7 and 26 of the Texas Water Code, specifically sections 
7.001 (Definitions), 7.002 (Enforcement Authority), 7.032 (Injunctive 
Relief), 7.051 (Administrative Penalty), 7.101 (Violation), 7.105 
(Civil Suit), 7.145 (Intentional or Knowing Unauthorized Discharge), 
7.146 (Discharge from a Point Source), 7.147 (Unauthorized Discharge), 
7.152 (Intentional or Knowing Unauthorized Discharge and Knowing 
Endangerment), 7.153 (Intentional or Knowing Unauthorized Discharge and 
Endangerment), 7.154 (Reckless Unauthorized Discharge and 
Endangerment), and 26.121 to enforce any license, certificate, 
registration, approval or other form of authorization issued under any 
statute within the TNRCC's jurisdiction or a rule, order or permit 
issued under such a statute. Therefore, the TNRCC has authority to 
enforce EPA-issued permits adopted by the TNRCC.
69. Issue: Added Burden of Proving Harm to Receiving Waters
    Some comments argue that EPA should disapprove the TPDES program 
because Texas law limits the ability of the TNRCC to enforce against 
certain unpermitted discharges, because of the added burden of proving 
harm to the receiving waters.
    Response: EPA assumes the comments are concerned with the text of 
TWC Sec. 26.121(a) (Text of section effective until authorization of 
NPDES permit authority), which prohibits certain discharges that by 
themselves or in conjunction with other discharges or activities, 
cause, continue to cause or will cause pollution of any water in the 
state. This section would be problematic if it were to remain in effect 
after NPDES authorization. However, the Texas legislature amended TWC 
Sec. 26.121 in 1977 to include subsections (d) and (e) effective upon 
authorization of the NPDES program. Subsection (d) of Texas Water Code 
26.121 (Text of section effective upon authorization of NPDES permit 
authority) provides that no person may discharge any pollutant, sewage, 
municipal waste, recreational waste, or industrial waste from any point 
source into any water of the state, except as authorized by the TNRCC. 
As discussed in the Attorney General's Statement, pp. 4-5, the 
definitions of ``pollutant'' and ``point source'' are found at TWC 
Sec. 26.001(13) and (21), and those definitions track the definitions 
found in CWA Sec. 502 and 40 CFR 122.2. Therefore, given the amendments 
to TWC Sec. 26.121 that became effective upon authorization of the 
NPDES program, EPA does not believe that Texas law provides for an 
added burden of showing harm to the receiving waters.
70. Issue: Reporting and Enforcement for Spills more Limited under 
State law
    Some comments argue that EPA should disapprove the TPDES program 
because reporting and enforcement for spills in Section 26.039 is 
linked to a determination of harm (i.e., cause pollution) and is 
therefore more limited than EPA's minimum federal requirements for 
State NPDES programs.
    Response: TWC Sec. 26.039 does speak to and provide reporting 
requirements

[[Page 51188]]

for accidental discharges or spills that cause or may cause pollution. 
However, this provision does not limit the TNRCC's authority to enforce 
against those who violate the Texas Water Code, a TNRCC rule, permit, 
order or other authorization. Section 26.039(d) states, ``nothing in 
this section exempts any person from complying with or being subject to 
any other provision of this chapter.'' The TNRCC can still enforce 
against a person who violates Texas Water Code 26.121. TWC 
Sec. 26.121(d) provides that no person may discharge any pollutant, 
sewage, municipal waste, recreational waste, or industrial waste from 
any point source into any water of the state, except as authorized by 
the TNRCC. All point sources regulated under the NPDES program and 
within the regulatory jurisdiction of the TNRCC are subject to this 
provision, and thus may discharge only in compliance with authorization 
from the TNRCC. 30 TAC 305.125 sets out standard permit conditions for 
permits issued by the TNRCC, which include requirements, including 
reporting requirements, consistent with the minimum federal 
requirements found at 40 CFR 122.41. All TPDES permittees would be 
subject to these reporting requirements, which are not linked to a 
determination of harm and are therefore not more limited than EPA's 
minimum federal requirements for State NPDES programs.
71. Issue: Legal Authority or Procedures To Assess and Collect Adequate 
Penalties
    Some comments argue that Texas has not shown that it has the legal 
authority or procedures to assess and collect adequate penalties 
because TNRCC's authority to seek civil and criminal penalties for 
violations by federal facilities and cities does not appear to be 
resolved.
    Response: EPA is not aware of any outstanding concerns over TNRCC's 
authority to seek civil and criminal penalties for violations by 
federal facilities or cities. Due to the vagueness of the comment, EPA 
can only surmise that the comments may be concerned about TWC 
Sec. 26.121(a)(2)(B), which provides that except as authorized by the 
TNRCC, no person may discharge certain wastes meeting certain 
conditions, unless the discharge complies with a person's ``water 
pollution and abatement plan approved by the Commission.'' A question 
has been raised in the past as to whether or not this provision acts to 
shield persons discharging in compliance with an approved water 
pollution and abatement plan from enforcement under the TPDES program. 
The short answer is no. TWC Sec. 26.121(d) (see text effective upon 
authorization of NPDES permit authority) provides that no person may 
discharge, among other things, any pollutant from any point source into 
any water of the state, except as authorized by the TNRCC. This 
subsection was added by the Texas legislature to address discharges 
under the NPDES program, and is controlling over all point sources 
regulated under that program and within the regulatory jurisdiction of 
the TNRCC. Point source dischargers discharging in violation of Section 
26.121(d) would be subject to civil and criminal penalties under the 
TPDES program regardless of whether or not they were acting in 
compliance with an approved water pollution and abatement plan.
72. Issue: State Law Controlling Over Federal Law
    Some comments contend that the MOA impermissibly states that, in 
case of inconsistency, State law controls over federal law. The 
comments base this argument on Section III.A.7 of the MOA, which 
provides that ``TNRCC will utilize EPA national and regional policies 
and guidance to the extent there is no conflict with Texas statutes, a 
specific State policy, or guidance adopted by TNRCC.''
    Response: Section 402(b) of the CWA requires a State seeking NPDES 
authorization to have statutory and regulatory authority at least as 
stringent as the federal requirements set out under that section and 40 
CFR 123.25. The State of Texas has demonstrated the required statutory 
and regulatory authority. Also, in cases where both State and federal 
permits are effective for the same discharge or where generally State 
and federal law apply, the State assures that TNRCC will fulfill the 
requirements of the CWA and federal regulations and any other State 
provisions that are more stringent. See, e.g., MOA, Chapter 1, p. 13 
(Section III.C.2. b). Although for the sake of national consistency EPA 
strongly encourages States implementing an NPDES program to do so in 
accordance with EPA policies and guidance, there is nothing in either 
the CWA or 40 CFR Part 123 that requires them to do so. Therefore, 
TNRCC's statement in the MOA that it will utilize EPA's policies and 
guidance only to the extent they do not conflict with Texas law or 
policy or TNRCC guidance is not in conflict with the requirements for 
NPDES authorization.
73. Issue: TNRCC Has Promulgated Invalid Rules
    One comment argues that TNRCC has promulgated invalid rules 
regulating water and air pollution under the requirements of Texas law. 
The comment contends that TNRCC failed to index its rules to the 
statutes upon which they are based as required by Texas Government 
Code, Section 2001.004, and as a result, that most of the regulations 
referenced in the TPDES program are invalid under State law and thus do 
not satisfy the requirements for State permit programs.
    Response: Since the TNRCC rules that are referenced in the TPDES 
application have not been ruled to be invalid in a court of law, they 
may be relied on to meet the statutory requirements of a State permit 
program. According to TNRCC, all rules adopted by the TNRCC cite the 
statutory authority under which they are adopted in the preamble to the 
rule (published in the Texas Register) and this citation serves as an 
index to the statutory basis.
74. Issue: Unconstitutional Delegation of Texas Legislative Power
    One comment contends that the legislative authority TNRCC cites 
under the Texas Water Code and the Texas Health and Safety Code is so 
broad and ill-defined as to constitute an unconstitutional delegation 
of legislative power. The comment references Attorney General Opinion 
DM474 (1998) as providing that the Texas Legislature may delegate its 
powers to State agencies, but only if it establishes ``reasonable 
standards to guide the entity to which the powers are delegated.'' The 
comment argues that the delegated authority cited by the TNRCC (e.g., 
Sec. 5.103 of the Texas Water Code, which states that ``[t]he 
Commission shall adopt any rules necessary to carry out its powers and 
duties under this code and other laws of this state'') does not 
establish such reasonable standards. As a result, the comment contends 
that the TNRCC has limited standing to promulgate the regulations 
necessary to satisfy the requirements for approval.
    Response: The Texas Attorney General has opined in his Statement of 
Legal Authority for the TPDES application that Texas laws provide the 
required legal authority to administer the program. Neither TNRCC nor 
EPA have the authority to determine the Constitutionality of laws 
passed by the Texas Legislature. These laws are in effect until either 
ruled unconstitutional in a court of law or repealed by the Texas 
Legislature.

[[Page 51189]]

Program Element--Specific Issues

Storm Water

75. Issue: Storm Water Program Not Specifically Mentioned in Scope of 
Authorization
    One comment expressed concern that the TPDES application did not 
specifically identify the NPDES storm water program in the Scope of 
Authorization section of the MOA.
    Response: The NPDES storm water program under CWA Sec. 402(p) (40 
CFR 122.26) is simply a subset of the basic NPDES permitting program 
established by CWA Sec. 402 (40 CFR 122). By requesting authorization 
to administer the NPDES permitting program, TNRCC by definition 
included a request for authorization for the storm water component of 
NPDES. The MOA (e.g., Section II.A.2.d), permit program description 
(e.g., Section I.A.), and the statement of legal authority (e.g., page 
3) of the TPDES application all contain numerous references to TNRCC's 
authority and procedures to regulate storm water discharges and how 
NPDES storm water permits will be transferred to TNRCC for 
administration. TNRCC adopted EPA's 40 CFR 122.26 storm water 
regulations by reference at 30 TAC 281.25(4).
76. Issue: TNRCC's Authority Over MS4s
    One comment noted that Texas has authority to regulate municipal 
separate storm sewers from municipalities with as few as 10,000 
population and requested an explanation of the reason of this apparent 
inconsistency with the NPDES storm water program. Another comment noted 
that while TNRCC has the authority to regulate municipal storm water 
discharges under State law, the regulatory process under TWC 
Sec. 26.177 was not consistent with NPDES requirements. An explanation 
of how the two programs would integrate was requested. The comment also 
questioned whether or not TNRCC's authority extended to municipalities 
under 10,000 population.
    Response: First, EPA would like to eliminate any misunderstandings 
regarding NPDES authority over municipal separate storm sewer systems. 
In 1987, Congress added section 402(p) to the CWA, specifically 
requiring EPA to move forward, in phases, with permitting of point 
source discharges of storm water under the NPDES program. Section 
402(p)(1) outlined the discharges that would be required to be 
permitted in Phase I, but section 402(p)(2)(E) specifically provides 
the authority to require permits at any time for any storm water 
discharge determined to be contributing to violation of a water quality 
standard or to be a significant contributor of pollutants to waters of 
the United States CWA Sec. 402(p)(6) required EPA to promulgate 
regulations identifying which of the remaining storm water discharges 
would be regulated in order to protect water quality. Regulations for 
this ``Phase II'' of the storm water program were proposed January 9, 
1998, (63 FR 1536) and are expected to be finalized in March 1999.
    Nowhere does the CWA totally exempt smaller municipal separate 
storm sewer systems from NPDES permit requirements; it only delays when 
applications are due and requires EPA to issue regulation defining the 
universe of dischargers that will be regulated under Phase II. 
Municipal Separate Storm Sewer Systems, as defined at 40 CFR 122.26(b), 
may be owned or operated by one or more municipal entities, including 
some that are under the 100,000 population cutoff, provided the 
population served by the entire system is 100,000 or more. Therefore, 
EPA and NPDES-authorized states have always had full authority to 
regulate any size of municipal separate storm sewer systems and any 
storm water point source discharges on a case-by-case basis.
    As specifically provided in 40 CFR 123.1(i), a State is not 
precluded from adopting or enforcing requirements that are more 
stringent than those required under the NPDES program. The State is 
also not precluded from operating a program with a greater scope of 
coverage than the NPDES program. EPA's decision on program approval can 
only be based on whether or not minimum criteria for a State Program 
have been met, and the fact that a State may have the authority to 
regulate discharges not regulated by the NPDES program is immaterial. 
TNRCC has committed to implement the TPDES program in a manner 
consistent with Federal requirements and has adopted the NPDES storm 
water regulations at 40 CFR 122.26 by reference via 30 TAC 281.25(4).
    TWC Sec. 26.177(a) provides that the TNRCC may require a city of 
more than 10,000 population to establish a water pollution control and 
abatement program for ``water pollution that is attributable to non-
permitted sources * * *.'' (emphasis added). Thus, any source of water 
pollution that is required to be permitted is outside the scope of the 
municipal water pollution control and abatement program implemented by 
TNRCC under TWC Sec. 26.177.
77. Issue: TPDES Permit Application Requirements for Storm Water 
Discharges
    One municipality asked whether TPDES application requirements for 
individual permits for storm water discharges and TNRCC's processing 
program for these permits would be reviewed and approved by EPA and 
whether or not there would be opportunity for public comment.
    Response: As stated in the TPDES permitting program description 
(Chapter 3, Section A.1), TNRCC will utilize EPA's existing application 
format for Municipal Separate Storm Sewer System (MS4) applications 
from medium or large municipal systems. Any permit application forms 
used by TNRCC, while not necessarily identical to the forms used by 
EPA, will require the same information required by 40 CFR 122.26. TNRCC 
will update its regulations (required by 40 123.62) and application 
forms (as needed) after promulgation of new NPDES regulations, 
including those for Phase II of the storm water program. Failure of the 
State to update regulations to conform to new Federal statutes or 
regulations is one of the grounds for withdrawal of program 
authorization under 40 CFR 123.63(a)(1)(i).
    TNRCC has adopted 40 CFR 122.26 by reference at 30 TAC 281.25(4). 
Therefore, application requirements for TPDES individual storm water 
permits are the same as those for NPDES permits. TNRCC's application 
forms are found in Appendices 3-A and 3-B of the TPDES application. 
Both sets of documents were provided for EPA review and for public 
comment as part of the TPDES application. Revisions of an approved 
State Program, including those necessary to respond to future changes 
in controlling statutes or regulations are subject to the EPA approval, 
public notice, and public comment requirements of 40 CFR 123.62.
    There is no special processing program for storm water permits. All 
TPDES permits follow the processing, EPA review, and public comment 
procedures described in the MOA and the permitting program description 
(Chapter 3 of the TPDES Application).
78. Issue: TPDES Regulation of State and Federal Storm Water Discharges
    A municipality asked whether federal and State facilities engaged 
in industrial activities normally regulated under the federal NPDES 
storm water program would also be required to obtain permits under the 
TPDES program.
    Response: All facilities subject to regulation under the NPDES 
program

[[Page 51190]]

that are under the jurisdiction of TNRCC will require TPDES permits. 
There is no special exemption for federal or State facilities under the 
TPDES program. (See 30 TAC 281.25(4) and 40 CFR 122.26)
79. Issue: TPDES Public Education and Outreach
    One comment asked whether TNRCC would provide some type of 
education and outreach program focused on the TPDES regulated 
community?
    Response: While EPA certainly supports outreach and public 
education, such programs are not a required element of a State Program. 
However, TNRCC does have a Compliance Support Division which is 
responsible for hosting technical assistance related workshops and 
conferences to those regulated by the TNRCC and for manning a technical 
assistance hotline to assist local government. TNRCC's Enforcement 
Division also provides technical assistance. (TPDES Chapter 2, page 2-
13). EPA recommends contacting TNRCC directly with requests for public 
education and outreach programs to meet specific needs of the regulated 
community.
80. Issue: Access to Storm Water Notice of Intent Databases
    One comment asked whether TNRCC would maintain a TPDES database [on 
facilities authorized under a storm water general permit] accessible to 
the public, such as the Region 6 storm water Notice of Intent database.
    Response: EPA will continue to administer the multi-sector general 
permit for storm water associated with industrial activity and the 
construction general permit for runoff from construction projects until 
they expire in September 2000 and July 2003, respectively (or earlier 
if replaced by a TPDES permit). EPA will continue to maintain and make 
available its NOI database during this period and will provide TNRCC 
with updates of the database periodically. All information on TPDES 
permits will generally be available from TNRCC under the Texas Public 
Information Act (Local Government Code Chapter 552) and 30 TAC 305.45-
305.46. EPA recommends contacting TNRCC directly with requests for 
setting up procedures for accessing any TNRCC NOI databases that may be 
created in the future. TNRCC currently has a mechanism for permit 
databases to be provided to the public, through its Information 
Resources Division.

CAFOs

81. Issue: Concentrated Animal Feeding Operations (CAFOs) Not Within 
TNRCC's Jurisdiction
    Some citizens and TNRCC question EPA's assertion that it (EPA), 
will retain jurisdiction over CAFOs for which TNRCC may not have 
authority. Citizens have expressed concern that the MOA is unclear on 
this point. They also express concern over parts of the MOA (Section 
III.C.4.) in which the State commits to making only those changes to 
Subchapter B and K rules consistent with NPDES requirements. The 
comment expresses the opinion that EPA and the State have proposed a 
scheme which will allow the State to adopt equivalent regulations after 
program assumption.
    Response: EPA agrees that the portions of the MOA which describe 
TNRCC's jurisdiction over CAFOs may not be clear to persons who are 
unfamiliar with Texas statutes which ``grandfather'' older CAFOs 
discharging into playa lakes under certain conditions. Pursuant to 
State statute (see TWC Section 26.048), CAFOs that 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) were 
authorized by TNRCC to use, and actually used, a playa lake, that does 
not feed into any other surface water in the State, as a wastewater 
retention facility are not subject to water quality standards or other 
requirements for discharges to waters in the state. This statute 
effectively restricts TNRCC's authority over these discharges. On the 
other hand, regardless of the historical use as a treatment system, 
some playa lakes are considered to be waters of the United States 
Therefore, under the CWA, CAFOs may not have unpermitted discharges to 
such playas. EPA and Texas were aware that, if one of these 
``grandfathered'' CAFOs is found to be discharging to a playa lake that 
is also considered to be a water of the U.S., TNRCC may not have the 
authority to take permitting or enforcement action with respect to 
those discharges to the playa. While neither EPA nor TNRCC are aware of 
any grandfathered CAFOs which fit this exemption, and both agencies 
hope that no CAFO is discharging to a water of the U.S. in violation of 
the CWA, both agencies determined to err on the side of caution and 
clearly outline that EPA would have jurisdiction over any CAFO 
discharges that were not legally within the jurisdiction of TNRCC.
    With regard to MOA provisions in Section III.C.4., the State 
district court has invalidated the State's Subchapter K rules, a 
potential outcome of the litigation cited by the State in this portion 
of the MOA. Although EPA is concerned that the State has lost one of 
its regulatory mechanisms to provide facilities with coverage under 
their State Program, it is not an impediment to TNRCC adopting EPA's 
CAFO permit for these point sources. If any facility believes it would 
have discharges totaling 500,000 gallons in a 24-hour period it would 
still be eligible for the EPA CAFO permit administered by TNRCC. When 
the EPA-issued general permit expires, these facilities should notify 
TNRCC and obtain individual TPDES permit coverage.
    State programs are dynamic and are always changing in accordance 
with changes to NPDES regulations and needs of the State. Changes in 
State programs must be reviewed and approved by EPA. This provision in 
the MOA describes a mechanism to ensure that any changes would be 
appropriate under the CWA. EPA believes it is clear from this provision 
that any changes to the Subchapter B and K rules would have to be 
approved by EPA as consistent with NPDES requirements before it would 
be implemented in the TPDES program.
82. Issue: Invalidated Subchapter K Rules
    Several comments express concern that Texas requirements under 
Subchapter K were invalidated by the court, and therefore, the program 
cannot be fully effective at the time of authorization.
    Response: Subchapter K is a TNRCC authorization by rule which 
allows animal feeding operations to meet their State requirements, but 
it is not a TPDES permitting action. In the MOA, TNRCC agreed to assume 
and administer the Region 6 CAFO general permit, when finalized, and 
may modify this permit to include State provisions that are more 
stringent than EPA general permit provisions. Individual facilities 
will be required to seek either an individual permit or authorization 
by rule if the facility is not included as part of the category of 
discharges allowed under the general permit. As to authorizations by 
rule, Subchapter K was the subject of litigation pending in State 
district court, and has been invalidated by judicial order.
    EPA has proposed an NPDES CAFO general permit for the State of 
Texas and TNRCC will take over administration of the permit when it 
becomes effective in accordance with sections III.C.3.c and III.C.7. of 
the EPA/TNRCC MOA. This will provide an appropriate NPDES

[[Page 51191]]

mechanism for facilities in Texas. The state may also issue individual 
site-specific permits for facilities it determines are not 
appropriately addressed by a general permit. In the event TNRCC amends 
Subchapter B and K with the intent to authorize facilities under the 
approved TPDES program, those rules will be subject to EPA review to 
insure they are consistent with CWA requirements (see MOA Section 
III.C.4).
83. Issue: Exceptions for CAFOs
    A comment from several public interest groups expressed concern 
that statutes adopted and proposed TNRCC regulations provide an 
exemption for CAFOs which would have an established water quality 
management plan developed by the Texas State Soil and Water 
Conservation Board (TSSWCB). They express the opinion that these 
facilities would not be considered point sources. This same comment 
expressed concern that CAFO facilities with less that 1000 animal units 
would be exempted from applying for a permit with the TNRCC if they 
obtain an ``independent audit.''
    Response: Although the comment did not supply specific references 
to the regulations or statutes of concern, EPA believes it refers to a 
statute, which was adopted in 1993 as Senate Bill 503 (Texas 
Agricultural Code 201.026), that describes regulation of agricultural 
and silvicultural nonpoint source discharges of pollution. The statute 
notes that facilities which may contribute nonpoint source pollution, 
and which have an established water quality management plan developed 
by the Texas State Soil and Water Conservation Board are exempted from 
regulation by TNRCC unless the TSSWCB or TNRCC determines they are a 
point source. Since this applies only to those facilities classified by 
the State as NPS, it is not inconsistent with EPA regulations found at 
40 CFR 122.23 (regulations applying to point sources of pollution). 
(i.e., applies to TWC 26.121(b) and not to 26.121(d) or (e)). The 
exemption is not available for facilities defined in CWA Sec. 502 (14).
    Although the comment again did not specify the statute or 
regulation to which it is referring, EPA can find only one provision in 
the State's regulations that correlates to the comment about an 
``independent audit'; which refers to CAFOs under 1000 animal units (30 
TAC 321, Subchapter B). This is ``authorization by rule'' for coverage 
under State requirements and will not (cannot) be used by TNRCC after 
approval of the TPDES program. Coverage under this rule is not an NPDES 
authorization. TNRCC will adopt the EPA CAFO general permit when it is 
finalized. This rule was not submitted by TNRCC as part of the TPDES 
program. This provision, as it applies to the state permitting program 
prior to TPDES approval, is not considered in the approval decision.
84. Issue: Senate Bill #1910 (Chicken Litter Bill) and Subchapter O 
Rules
    One comment stated that Senate Bill #1910 was ``torn to pieces'' 
prior to being passed by the Texas legislature and that TNRCC did 
nothing to keep the bill intact. The comment appeared to be expressing 
concern that TNRCC would not actively regulate animal waste such as 
chicken litter. Comments received by EPA early in the process (prior to 
the comment period) expressed concern about exemptions in TNRCC rules 
for aquaculture (30 TAC 321, Subchapter O).
    Response: As mentioned above, when TNRCC assumes authorization of 
the NPDES program, the Agency retains oversight authority. Part of 
EPA's oversight role includes review of TPDES permits for industrial 
(i.e., poultry processing plants) and municipal operations proposed by 
the TNRCC, to ensure compliance with applicable regulations and 
guidelines as established in the Clean Water Act. EPA has reviewed 
Subchapter O and finds it is consistent with EPA's regulations at 40 
CFR 122.24 and 122.25.

Sludge

85. Issue: Statutory Requirements for Sludge Permitting Are More 
Stringent Than the TNRCC Rules
    One comment expressed concern that the TPDES program plan provides 
for permitting and registration for sewage sludge disposal. The comment 
stated that the statutory basis for sludge regulation is found in the 
Texas Water Code, which allegedly provides for sludge permitting only, 
not sludge registration. The comment asserted that, since the statutory 
requirements for sludge permitting are more stringent than the TNRCC 
rules promulgated for a sludge site registration and the TNRCC has no 
authority to adopt less stringent program requirements, there is no 
valid statutory basis under Texas law for rules regulating registration 
of sludge sites. Consequently, the comment contended that the TPDES 
program plan on this point does not provide for adequate authority as 
required by 33 USC 1342(b).
    Response: 30 TAC 312.4(a) states permits are required for all 
sewage sludge processing, storage, disposal, and incineration 
activities. Further clarification is provided by 40 CFR 503.3(a)(1) 
which Texas adopted and is referenced in the Continuing Planning 
Process. This regulation requires all ``treatment works treating 
domestic sewage'' be permitted. Treatment works are defined as all 
TPDES facilities discharging to waters of the United States and those 
facilities generating sewage sludge but without a discharge to waters 
of the United States. In addition, it covers facilities changing the 
quality of sewage sludge. These operations include blending, 
stabilization, heat treatment, and digestion. The definition of 
``treatment works'' also includes surface disposal site owners/
operators, and sewage sludge incinerator owners/operators.
    The TNRCC's authority over solid waste disposal, including 
beneficial use of sewage sludge, is found in Chapter 361 of the Texas 
Health and Safety Code (THSC). 30 TAC 312.4(c) and 312.12 provide 
requirements to be followed in the registration of land application 
sites. The Texas program is more stringent than the minimum program 
required by the Federal regulations. Texas requires registrations be 
obtained by persons responsible for the land application operations and 
the sites onto which the sewage sludge or domestic septage is land 
applied for beneficial reuse. The Part 503 regulations do not 
automatically require land appliers of sewage sludge to obtain any type 
of official authorization for land application operations unless 
specifically requested to do so by the permitting authority to protect 
human health and the environment.

Continuing Planning Process-Implementation Procedures-Water Quality 
Standards

86. Issue: Lowering Stream Standards of East Texas
    One comment alleges that the three appointed commissioners of the 
TNRCC, and others, conceived the policy of lowering the stream 
standards of East Texas in order to accommodate polluting wastewater 
facilities. The comment asserts that due to citizens' outcry and 
``EPA's logic,'' the policy was overruled by the EPA. The implication 
of the comment was that TPDES authorization would allow TNRCC to take 
such actions in the future.
    Response: After state program authorization, EPA maintains program 
oversight authority to ensure compliance with requirements and 
regulations of the Clean Water Act. The Agency also maintains the 
authority for

[[Page 51192]]

review and approval of any revisions to water quality standards and/or 
criteria to listed and unlisted waterbodies of Texas (CWA 
Secs. 303(c)(2)(A) and 303(c)(3)).
87. Issue: No Approvable Continuing Planning Process
    One comment states that the (NPDES Program) application may not be 
approved because TNRCC does not have an approved, or approvable 
Continuing Planning Process (CPP).
    Response: EPA approved the Texas CPP on September 10, 1998. The CPP 
and Water Quality Standards Implementation documents do contain certain 
procedures which EPA has determined are not consistent with, or do not 
fulfill the requirements of the Clean Water Act, as interpreted by EPA 
Region 6. However, these issues have been resolved to EPA's 
satisfaction via the MOA, which was signed by both TNRCC and EPA 
concurrently with TPDES program authorization.
88. Issue: No Prior Approval of the Continuing Planning Process (CPP)
    A comment raised concerns that Texas did not have a CPP that was 
approved prior to consideration of the application for permit program 
approval. Specific issues raised in the comment included the length of 
time for public review of the three documents and ``conditional 
approval'' of the CPP by EPA.
    Response: EPA regulations do not require approval of the CPP prior 
to the date a State submits an application for program authorization. 
Regulations at 40 CFR 130.5(c) state that ``[t]he Regional 
Administrator shall not approve any permit program under Title IV of 
the [Clean Water] Act for any state which does not have an approved 
continuing planning process.'' The Texas CPP was approved on September 
10, 1998--before the decision on program authorization was made.
    The primary elements of the CPP addressed in this section of 
comments, the Water Quality Standards and the IP, were adopted by TNRCC 
and submitted to EPA for approval on March 19, 1997 and August 23, 
1995, respectively. Thus, both of these documents have been in use and 
available for public review for over a year. The MOA was made available 
for public review and comment on June 19, 1998. The official comment 
period for the package was 45 days, and was subsequently extended by 
one week. The MOA does contain nine changes to the IP, all identified 
and listed at Section IV.B., Permit Development, pages 24-27 of the 
MOA. These changes supersede certain requirements in the IP and were 
required by EPA to make the IP approvable. The changes were:
    a. Procedures to suspend the use of biological surveys in the IP.
    b. Procedures for cessation of lethality during a Toxicity 
Reduction Evaluation.
    c. Conditions for use of alternate test species.
    d. Calculation of Dioxin/Furan permit limits.
    e. Development of water quality-based effluent limitations for 
discharges into the Rio Grande.
    f. Final Limitations in TPDES permits--consistency with the EPA-
approved Water Quality Management Plan (including any applicable Total 
Maximum Daily Loads).
    g. No variance from water quality standards will be used to 
establish an effluent limitation for a TPDES permit until the standards 
variance has been reviewed and approved by EPA.
    h. TNRCC evaluation of TPDES general permits for compliance with 
water quality requirements, including whole effluent toxicity.
    i. Water Quality Standards Implementation Procedures subject to EPA 
review and approval after program assumption and while TNRCC is 
authorized to administer the NPDES program.
    EPA does not believe it has circumvented or frustrated the public 
review and comment process by its approval process. The changes to the 
implementation procedures listed above are mechanisms that will result 
in permits more protective than what the state program previously 
required. Prior to program authorization, all aspects of the CPP, IP 
and MOA reflected a program that contains all the elements necessary to 
fulfill all of the requirements of the Clean Water Act for NPDES 
permitting.
89. Issue: Changes to CPP Not Validly Adopted by TNRCC
    One comment stated that the proposed changes to the CPP set out in 
the proposed MOA, even if they were otherwise adequate, were not 
validly adopted by TNRCC.
    Response: As stated above, the MOA and the changes to the IP 
therein were available for public review and comment for a period of 52 
days beginning June 19, 1998.
90. Issue: CPP Is Not Approvable Because of Inadequate Process for 
Effluent Limitations
    One comment states that the CPP does not provide an adequate 
process for developing effluent limitations, citing the CWA 
requirements for the CPP to address the process for developing 
technology-based effluent limits, effluent limits at least as stringent 
as those required by CWA Section 301 (b)(1) and (b)(2), and 33 U.S.C. 
1311 (e)(3)(A). The comment further states that the MOA does not 
describe a process for developing effluent limitations and schedules of 
compliance.
    Response: Series 21 of the CPP states: ``[t]echnology-based permit 
limits will be at least as stringent as Best Practical Control 
Technology Currently Available (BPT), Best Available Technology 
Economically Achievable (BAT), and Best Conventional Pollutant Control 
Technology (BCT) limits in accordance with Effluent Limitations and 
Standards as promulgated for categorical industries and found in 
federal regulations (40 CFR Parts 400 to 471), as referenced in 30 TAC 
305.541. Production-based limitations will be based on a reasonable 
measure of actual production levels at a facility. Mass limitations for 
concentration-based guideline limits will be developed using the 
appropriate wastewater flows as required by regulations. Municipal 
permit limits will be consistent with Wasteload Evaluation/Allocations, 
the Water Quality Management Plan, Watershed Protection Rules (30 TAC 
Chapter 311), and at least as stringent as requirements found in 30 TAC 
309.1-4 (secondary treatment).'' Additional requirements for secondary 
treatment are specified by 30 TAC 305.535(d). This outlines what 
technology based effluent limitations must be considered and what 
variables must be used to calculate effluent limitations.
    In addition, Series 18 provides an outline of the Texas Water 
Quality Standards. This includes describing the General Criteria found 
in 30 TAC 307.4 which defines the general goals to be attained by all 
waters in the State. It also lists the procedure to address and permit 
facilities discharging to those waterbodies that are unclassified and 
therefore do not have site-specific criteria established at the time 
the permit is developed.
    Regarding schedules of compliance, Series 21 of the CPP states that 
permits will be developed to be consistent with State statutes 
including Title 30 TAC 307.2(f). This statute allows the TNRCC to 
establish interim discharge limits to allow a permittee time to modify 
effluent quality in order to attain final effluent limits. The duration 
of any interim limit may not be longer than three years from the 
effective date of the permit issuance.

[[Page 51193]]

91. Issue: Inadequate TMDL Program
    One comment asserts that the CPP does not include an adequate 
process for developing Total Maximum Daily Loads (TMDLs) and individual 
water quality based effluent limitations in accordance with Section 
303(d) of the CWA. Indeed, TMDL development is only addressed in the 
CPP in the context of toxic parameters. See Series 20. Even for toxic 
pollutants, that discussion is grossly inadequate because it fails to 
establish a process for developing a list of waters for which 
technology-based limitations are not adequate, fails to establish a 
process for ranking those waters by priority, fails to establish a 
process for submission of such lists to EPA, and fails to establish a 
process for developing a schedule for preparation and implementation of 
TMDLs. See 33 U.S.C. 1313(d) (setting out requirements for the TMDL 
process); 40 CFR 130.7. The CPP fails even to address the TMDL issue 
with respect to other pollutants.
    Response: In a letter from TNRCC Executive Director Jeffrey Saitas 
to EPA Region 6 Administrator Gregg Cooke dated September 4, 1998, 
TNRCC has recently modified its TMDL program, and assures that the 
approved process applies to all pollutants, not just toxics (attached 
to CPP). The modified program meets all EPA requirements and addresses 
the concerns stated in the comment. The information has been submitted 
as an attachment to the CPP, and will be incorporated into the next 
revision of the CPP. TNRCC developed guidance for screening and 
assessing state waters (attached to CPP). This information was 
presented at three Texas Clean Rivers Program (CRP) Basin Steering 
Committee meetings during December 1997. Subsequently, criteria and 
guidance for listing and prioritizing waterbodies was developed 
(attached to CPP) and distributed January 23, 1998, for review via the 
TNRCC Internet website, the Texas CRP and various meetings across the 
state. After comments and revisions, the second draft list was 
similarly advertised. After further comment, the final draft list was 
approved by the Commissioners and sent out for a 30-day formal public 
comment period (March 13--April 13, 1998). Written responses to public 
and EPA comments were prepared and distributed (attached to CPP). The 
1998 303(d) list and methodology (attached to CPP) were finalized and 
approved by the Commissioners, and the final list was submitted to EPA 
for approval on April 23, 1998 (attached to CPP). The final list was 
available on the TNRCC website on June 26, 1998 and approved by EPA on 
July 27, 1998. Thus, the revised TMDL development has been through an 
extensive public participation process to generate the 1998 303(d) 
list.
92. Issue: Inadequate Process for Establishing Implementation of New or 
Revised Water Quality Standards
    Comments raised three sub-issues regarding implementation of new or 
revised quality standards.
    Response: Responses to each of the three sub-issues raised in 
comments are provided below.
93. Sub-Issue on Water Quality Standards: The IP Purports To Apply Tier 
Two protection * * * Only to Waters Classified as High or Exceptional 
Aquatic Life, Based Almost Exclusively on Dissolved Oxygen Levels
    Response: The TX WQS presume a high quality aquatic life use for 
all perennial water bodies. An intermediate or limited aquatic life use 
may only be adopted for a specific water body only when justified with 
a Use Attainability Analysis (UAA). The focus of a UAA is to determine 
what is the attainable use based on the physical, chemical and 
biological characteristics of the water body. As part of a UAA, data 
collected for a specific water body is compared with a reference (un-
impacted) segment. This ensures that the designated use is based on the 
attainable use rather than based on the conditions with existing 
sources of pollution. The intermediate and limited aquatic life uses 
are considered to be existing uses and are also subject to 
antidegradation review.
    EPA has not mandated whether States/Tribes apply ``Tier 2'' on a 
parameter-by-parameter basis or on a waterbody-by-waterbody approach as 
Texas does. This issue is open for discussion in the Advanced Notice of 
Proposed Rule-Making (ANPRM) for the Water Quality Standards Regulation 
(see 63 FR 36742). EPA will accept comment on the ANPRM through January 
4, 1999. The ANPRM is a separate action from Texas's assumption of the 
NPDES program.
    The antidegradation review may initially focus on dissolved oxygen; 
however, all pollutants are subject to review.
94. Sub-Issue on Water Quality Standards: With Regards to 
Antidegradation, the IP Fails To Set Out a Process for Assuring the 
Application of the Highest Statutory and Regulatory Requirements for 
All New and Existing Point Sources and all Cost-Effective and 
Reasonable Best Management Practices for Nonpoint Source Control
    Response: Antidegradation is discussed at 30 TAC 307.5 of the 1995/
1997 Texas Water Quality Standards, which have been fully approved by 
EPA, in accordance with the federal regulation. In particular, items 
(b)(2), (b)(4) and (b)(5) of Section 307.5 directly address the 
comment's issues:
    (b)(2)--No activities subject to regulatory action which would 
cause degradation of waters which exceed fishable/swimmable quality 
will be allowed unless it can be shown to the commissioner's 
satisfaction that the lowering of water quality is necessary for 
important economic or social development. Degradation is defined as a 
lowering of water quality to more than a de minimis extent, but not to 
the extent that an existing use is impaired.
    Water quality sufficient to protect existing uses will be 
maintained. Fishable/swimmable waters are defined as waters which have 
quality sufficient to support propagation of indigenous fish, 
shellfish, and wildlife and recreation in and on the water.
    (b)(4)--Authorized wastewater discharges or other activities will 
not result in the quality of any water being lowered below water 
quality standards without complying with federal and state laws 
applicable to water quality standards amendment.
    (b)(5)--Anyone discharging wastewater which would constitute a new 
source of pollution or an increased source of pollution from any 
industrial, public, or private project or development will be required 
to provide a level of wastewater treatment consistent with the 
provisions of the Texas Water Code and the Clean Water Act (33 United 
States Code 1251 et seq.). As necessary, cost-effective and reasonable 
best management practices established through the Texas water quality 
management program shall be achieved for nonpoint sources of pollution.
    Therefore, under the TPDES program, implementing the approved water 
quality standards includes implementing the prohibitions on degradation 
of water quality contained therein.

[[Page 51194]]

95. Sub-Issue on Water Quality Standards: The IP Fails To Address 
Implementation of Narrative Standards * * * and Storm Water Discharges
    Response: Narrative criteria (both conventional and toxics) are 
addressed in permit actions. Page 6 of the IP states:

    New permit applications, permit renewals, and permit amendments 
will be reviewed to ensure that permitted effluent limits will 
maintain in stream criteria for dissolved oxygen and other 
parameters such as fecal coliform bacteria, phosphorus, nitrogen, 
turbidity, dissolved solids, temperature, and toxic materials. 
Assessment of appropriate uses and criteria for unclassified waters 
will be conducted in accordance with the previous sections.
    This evaluation will also include a determination of any 
anticipated impacts from ambient or baseline conditions, in order to 
implement antidegradation procedures (see following section). 
Conditions for the evaluation of impacts will be commensurate with 
ambient or baseline conditions * * *

    Extensive requirements for total toxicity testing are found on 
pages 40-56 of the IP and pages 24-26 of the MOA. These requirements 
address protection of narrative water quality standards for toxics and 
other pollutants through the Whole Effluent Toxicity program. Storm 
water is not differentiated from other wastewater discharges in the 
permit limitation derivation procedures.
96. Issue: No Process for Assuring Controls Over All Residual Waste 
From Water Treatment Processing
    One comment expressed the opinion that EPA rules and the Clean 
Water Act require that a CPP include a process for assuring adequate 
controls over the disposition of all residual waste from any water 
treatment processing. The TNRCC CPP fails even to acknowledge this 
issue.
    Response: Series 21 of the CPP states the TNRCC will require all 
industrial wastewater permits (including water treatment plant permits) 
to contain conditions for the safe disposal of all industrial sludges, 
including hazardous waste, and that it be managed and disposed of in 
accordance with 30 TAC Chapter 335 and any applicable requirements of 
the Resource Conservation and Recovery Act. This includes the adopted 
regulations 40 CFR Part 257 and 258 referenced below which regulates 
non-hazardous water treatment plant residual wastes. Series 21 of the 
CPP further outlines that permits will be developed to be consistent 
with state and federal statutes, regulations and rules and also 
incorporate state and federal policies regulating the safe disposal and 
reuse of municipal sewage sludge. The regulations listed in the CPP 
which Texas will follow regarding the permitting of all residuals 
follows: (1) 30 TAC Chapter 312--Sludge Use, Disposal, and 
Transportation; Texas Health and Safety Code Chapter 361; 30 TAC 
Chapters 330, 332--Disposal in a Municipal Solid Waste Landfill; and 
(2) 40 CFR Parts 122, 257, 258, 501, and 503.
    30 TAC 312.4(a) states permits are required for all sewage sludge 
processing, storage, disposal, and incineration activities. Further 
clarification is provided by federal regulations 40 CFR 503.3(a)(1) 
which Texas adopted and is referenced in the Continuing Planning 
Process. This regulation requires all ``treatment works treating 
domestic sewage'' be permitted. Treatment works are defined as all 
TPDES facilities discharging to waters of the United States and those 
facilities generating sewage sludge but without a discharge to waters 
of the United States In addition, it covers facilities changing the 
quality of sewage sludge. These operations include blending, 
stabilization, heat treatment, and digestion. The definition of 
``treatment works'' also includes surface disposal site owners/
operators, and sewage sludge incinerator owners/operators. 30 TAC 
312.4(c) and 312.12 provide requirements to be followed in the 
registration of land application sites. The Texas program is more 
stringent than the minimum program required by the Federal regulations. 
Texas requires registrations be obtained by persons responsible for the 
land application operations and the sites onto which the sewage sludge 
or domestic septage is land applied for beneficial reuse. The Part 503 
regulations do not automatically require land appliers of sewage sludge 
to obtain any type of official authorization for land application 
operations unless specifically requested to do so by the permitting 
authority to protect human health and the environment.
97. Issue: No Process for Determining Priority Issuance of Permits
    One comment indicated that EPA rules require that a CPP include a 
process for determining the priority of issuance of permits, but the 
TNRCC CPP fails to even acknowledge this issue.
    Response: EPA believes TNRCC has addressed the priority of permit 
issuance via its watershed approach to permitting. This approach 
identified and prioritized the Texas drainage basins, and requires all 
permits in a particular basin be issued during the same year. 
Permitting activities for all dischargers in a basin then rotate on a 
five-year basis. The Basin Permitting Rule is found at 30 TAC 305.71. 
The process is also referenced in the CPP, under Series 21--Point 
Source Permitting.
98. Issue: Use of EPA Test Methods for TPDES Program
    The comment requested clarification concerning Item IV.B.3 in the 
proposed memorandum of agreement between TNRCC and EPA Region 6 
concerning the use of alternate test methods and alternate test species 
for measurement of Whole Effluent Toxicity (WET). The comment expressed 
concern about terminology in the memorandum of agreement, specifically, 
the term ``EPA-approved'' tests and species, which permittees could use 
if TNRCC approved such use during the permit application process. The 
comment provided a specific example of allowance for an ionic 
adjustment of an effluent sample under certain circumstances.
    Response: NPDES State program regulations applicable to permitting 
cross reference to certain, specific NPDES regulations that apply to 
EPA-issued permits, including the regulations that require the use of 
analytic test procedures approved at 40 CFR Part 136 (40 CFR 
123.25(a)(4), (12) & (15); 40 CFR 122.21, 122.41 & 122.44). Recently, 
EPA approved testing methods to measure WET and published those methods 
at 40 CFR Part 136.
    EPA acknowledges the existence of WET testing protocols that use 
other test species, or that differ from the procedures in the WET tests 
that EPA published at Part 136. Those regulations, at 40 CFR 136.4 (b), 
provide that:

    ``When the discharge for which an alternative test procedure is 
proposed occurs within a State having a permit program approved 
pursuant to Section 402 of the Act, the applicant shall submit his 
application to the Regional Administrator through the Director of 
the State agency having responsibility for issuance of NPDES permits 
within such State.

    These procedures are designed to optimize coordination in the 
approval process between the applicant, the State, and EPA. Item 
IV.B.3. of the proposed memorandum of agreement, therefore, merely 
formalizes the State of Texas' role in the process for approval of 
alternative test procedures (and alternative test species). Through 
this process, the Commission will determine the acceptability of any 
alternative test procedures prior to forwarding the proposal to EPA 
Region 6 for review and approval.

[[Page 51195]]

    In response to the comment's specific example regarding ionic 
adjustment of effluent samples, EPA refers the public to: Short-Term 
Methods For Estimating The Chronic Toxicity Of Effluents And Receiving 
Water To Marine And Estuarine Organisms (EPA-600-4-91-003) in Section 
8.8 and Methods for Measuring the Acute Toxicity of Effluents and 
Receiving Waters to Freshwater and Marine Organisms (EPA/600/4-90/027F) 
in Section 9.5. These provisions describe the appropriate use of 
salinity adjustments for whole effluent toxicity testing for WET 
testing for discharges into marine waters.
    Consistent with the requirements and recommendations in the Part 
136 WET testing methods, EPA Region 6 has provided technical support to 
TNRCC regarding ionic manipulation of effluent samples. The approved 
manipulations apply only to samples used for the 24-Hour 
LC50 WET test. Under Texas Water Quality Standards (30 TAC 
307.6(e)(2)(B)), TNRCC requires a 24-Hour LC50 WET test 
under certain circumstances. The WET tests that EPA published in Part 
136 do not include a 24-Hour LC50 test. Under CWA section 
510, however, States may impose water quality requirements that are 
more stringent and/or more prescriptive than those required by EPA.
    EPA notes that Texas law does not allow for ionic manipulations of 
effluent samples when pollutants listed in Table 1 of 30 TAC 307.6(c) 
are present in the effluent or source waters. Finally, EPA notes that 
30 TAC 307.4 (g)(3) provides that ``Concentrations and their relative 
ratios of dissolved minerals such as chlorides, sulfates and total 
dissolved solids will be maintained such that attainable uses will not 
be impaired.'' Therefore, while Texas law does allow for adjustments to 
the 24-hour LC50 test conditions under some circumstances, 
if the discharge causes the relative ratios of dissolved solids to be 
changed sufficient to impair the attainable uses, the discharge would 
also have to be evaluated for whether or not changing the relative 
ratios of dissolved solids in fact would impair the attainable uses.

Other Specific Issues

99. Issue: Overlapping EPA/TNRCC Requirements
    One comment raised the question of how TNRCC and EPA will address 
duplicate efforts regarding permit reporting/inspection requirements.
    Response: When EPA retains enforcement authority, the facilities 
will continue to report to EPA and TNRCC. Where EPA retains enforcement 
authority over a municipality, all NPDES permits associated with that 
municipality will be retained by EPA. Where a municipality also owns an 
industrial facility (public utility) those facilities will not be 
considered as part of the municipality, but will be considered as an 
individual facility. Facility inspections will continue to be 
coordinated between the two agencies to ensure minimum duplication of 
effort.
100. Issue: Definition of Enforcement Action
    One comment states the ``NPDES application must clearly describe 
when the commission will use different types of orders.'' The comment 
asserts this information is essential to EPA's ability to determine if 
TNRCC will take timely and appropriate enforcement action.
    Response: Due to the many variables of assessing violations, EPA 
cannot require the state to provide this level of detail. Through our 
oversight of the TPDES program and review of the quarterly 
noncompliance reports EPA will be able to determine whether or not 
enforcement actions are timely and appropriate.
101. Issue: Noncompliance Follow-up
    One comment states that TNRCC prefers informal resolution to formal 
documented enforcement and also states that EPA needs to be able to 
track resolution of violations where no formal action was taken.
    Response: TNRCC will be required to enter all enforcement actions 
into the Permit Compliance System (PCS). This will include both 
informal and formal enforcement actions. Informal actions can include 
telephone calls, site visits, warning letters, corrective action plans, 
etc. During EPA's semi-annual audits of the TPDES program, EPA will 
further evaluate TNRCC's response to noncompliance.
102. Issue: Failure To Comply With the International Treaties and 
Agreements
    A public interest group commented that EPA had failed to carry out 
its legal responsibilities under international treaties and executive 
orders to consult with the government of Mexico and to seek input from 
Mexico on changes that would occur as a result of approval of the TPDES 
program. The comment contended that: (1) EPA failed to consult with 
Mexico on the impacts of NPDES authorization to Texas on the Rio Grande 
as required by the environmental agreements between the U.S. and 
Mexico; (2) EPA failed to consider what impacts the authorization will 
have on the ability of Mexico to comment on activities with potential 
cross-border issues; (3) TNRCC has not committed to provide notice to 
the government of Mexico for the purpose of soliciting comments on 
permits and other decisions that may affect Mexico; and (4) TNRCC lacks 
adequate procedures to comply with Section 402 (b)(5) of the Clean 
Water Act as it relates to Mexico.
    Response: It is difficult to address this overly broad and vague 
comment because the comment failed to identify any applicable provision 
within any international agreements or executive orders. Hence, we can 
only assume which international agreements and executive orders they 
are referencing.
    (1) International environmental agreements, such as the La Paz 
Agreement, between the U.S. and Mexico require the U.S. to consult with 
Mexico on certain specified environmental issues. However, the 
environmental agreements between the U.S. and Mexico and executive 
orders, do not specifically require the U.S. to consult with Mexico 
about authorization of a program, like the NPDES program, to a state, 
such as Texas. Moreover, EPA retains significant oversight authority 
over Texas NPDES permitting activities pursuant to the Clean Water Act. 
Consequently, Mexico's ability to consult with the U.S. as required 
under current environmental agreements is not reduced concerning any 
NPDES environmental issues after authorization of the NPDES program to 
the State of Texas.
    (2) There are many fora and mechanisms for the Mexican Government 
to raise environmental issues, involving the State of Texas, with the 
U.S. EPA, the U.S. Department of State and the U.S. Department of 
Justice. These include the Commission for Environmental Cooperation, 
Border Environment Cooperation Commission, meetings mandated pursuant 
to the La Paz Agreement, and through other bilateral, and multilateral 
meetings and organizations.
    (3) We are unaware of any mandatory obligations on the part of the 
State of Texas to provide notice of an NPDES permitting activity to the 
Government of Mexico.
    (4) Section 402(b)(5) of the Clean Water Act does not apply to 
foreign countries and specifically not to Mexico. The word ``State'' in 
the following provision applies to a State of the United States and 
does not confer upon Mexico the same right to submit recommendations, 
as the statute provides to a State. The following is the text of the 
statute.

[[Page 51196]]

    CWA 402 (b)(5) provides that: To ensure that any State (other than 
the permitting State), whose waters may be affected by the issuance of 
a permit may submit written recommendations to the permitting State 
(and the Administrator) with respect to any permit application and, if 
any part of such written recommendations is not accepted by the 
permitting State, that the permitting State will notify such affected 
State (and the Administrator) in writing of its failure to so accept 
such recommendations together with its reasons for so doing.
103. Issue: Additional Documents That Should Be Added to the 
Administrative Record
    In the Federal Register notice, EPA requested that the public 
provide input on any document relevant to EPA's decision on the TPDES 
program that they felt should have, but had not, been included in the 
official record. One comment suggested that all previous applications 
for NPDES authorization by Texas; all written correspondence between 
EPA and Texas regarding those previous applications; all documents 
prepared since January 1, 1990, involving grants from EPA to Texas for 
water pollution control including, but not limited to grant documents, 
contracts for grants, and evaluations of Texas actions under such 
grants.
    Response: EPA's decision on approval of a State's request for NPDES 
authorization must be based on the State's application that has been 
determined to be complete, and after considering any information 
provided during or as a result of the public comment period. It would 
not be appropriate to base this decision on what was, or was not, in 
previous applications. Therefore, information on past applications is 
not a required part of the administrative record. However, information 
on past applications by Texas is available to the public via the 
Freedom of Information Act.
    Information on previous grants to the State of Texas is likewise 
not germane to EPA's decision. Correspondence regarding the FY-1999 
grants process has been added to the administrative record.
104. Issue: Availability of NPDES Files Transferred to TNRCC
    A public interest group questioned how TNRCC would make the permits 
and enforcement files for the TPDES program (including the existing 
NPDES files EPA transfers to the State) available for use by TNRCC 
inspectors and other employees in the fifteen District offices across 
the State and to the public. The comments were especially concerned 
that maintaining a single copy of the file in Austin would not allow 
timely access by TNRCC field personnel investigating complaints and 
doing inspections.
    Response: TNRCC staffs have confirmed that all files transferred to 
TNRCC by EPA will be electronically imaged and then made available to 
both the public and to field personnel. EPA supports this decision by 
TNRCC to take advantage of opportunities current imaging and 
information distribution technology offer to actually improve public 
access to permit and enforcement information over that currently 
available through EPA paper-based file system. The actual paper files 
will be archived. According to TNRCC staff, the whole process of 
imaging the files and setting up the TNRCC procedures for accessing the 
file information is expected to be completed within two months after 
program authorization.

Endangered Species

105. Issue: ESA Requirement for EPA To Insure Protection of Threatened 
and Endangered Species
    Some comments assert that Section 7(a)(2) of the Endangered Species 
Act (ESA) requires that EPA insure, in consultation with the U.S. Fish 
& Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) 
(collectively, the Services), that its approval of the TPDES program is 
not likely to jeopardize the continued existence of threatened and 
endangered species. The contention is that ESA Sec. 7(a)(2) compels EPA 
to disapprove a state program request if FWS finds approval might 
result in jeopardy. These comments also assert that, if EPA approves 
this program, EPA would fail to carry out its obligation under section 
7(a)(1) to conserve listed species.
    Response: EPA has engaged in consultation under section 7(a)(2) of 
the ESA regarding its approval action. FWS has issued a biological 
opinion finding that the program is not likely to jeopardize the 
continued existence of listed species or result in the destruction or 
adverse modification of designated critical habitat, and NMFS has 
concurred in EPA's finding that its action is not likely to adversely 
affect listed species. Regarding section 7(a)(1), to the extent it 
could even be argued that this provision imposes a specific obligation 
on EPA to take actions in the context of this approval action, EPA has 
met this obligation. The very premise of the coordination procedures 
developed by EPA and the Services is to ensure that effects of State 
permitting decisions on listed species are adequately considered, and 
that appropriate measures, including conservation measures, may be 
considered as appropriate. Facilitating communication between EPA, the 
Services and the State is one of the most fundamental steps that can be 
taken to promote the conservation of listed species. Moreover, EPA has 
stated that it may object to State permits that fail to ensure 
compliance with water quality standards which, among other things, 
preclude adverse toxic effects to listed species. Thus, EPA may use its 
objection authority, in appropriate circumstances, to address such 
adverse effects, even if the State permits are not likely to jeopardize 
the continued existence of a listed species.
106. Issue: Limitations on TNRCC's Ability To Agree to Measures for 
Insuring Protection of Threatened and Endangered Species
    Some comments assert that EPA cannot approve the TPDES program 
because EPA and TNRCC cannot, consistent with American Forest & Paper 
Assoc. v. U.S. EPA , 137 F.3d 291 (5th Cir. 1998) (AFPA) and TWC 
Sec. 26.017, ``agree to regulatory procedures necessary to insure that 
jeopardy and adverse modification to critical habitat are avoided...or 
to implement reasonable and prudent measures and alternatives.'' The 
comments identify no specific threat to listed species from program 
approval and recommend no specific procedures to avoid or minimize 
threats.
    Response: No extraordinary procedural agreements between EPA and 
TNRCC are required to insure jeopardy is unlikely to arise from TPDES 
program approval or to minimize incidental takes anticipated in FWS' 
biological opinion. Texas' water quality standards require that permits 
be written in such a manner that would avoid jeopardy to aquatic and 
aquatic dependent wildlife (including listed species) and EPA will use 
its standard CWA procedures for review of state permit actions 
(including actions brought to its attention by the Services) to assure 
the standards are applied. EPA and the Services will use procedures 
that, in all the agencies' views, are adequate to ensure that listed 
species are not likely to be jeopardized and minimize incidental take. 
The State has an independent obligation to ensure that standards are 
applied in TPDES permits and EPA has committed, when authorized by CWA, 
to object to any State permit that is likely to jeopardize any listed 
species if the State fails to comply with that obligation and to 
considering carefully sub-jeopardy

[[Page 51197]]

issues. For these reasons, EPA and the Services have concluded that 
approval of the TPDES program is unlikely to jeopardize listed species 
or result in the destruction or adverse modification of critical 
habitat.
107. Issue: Adequacy of Texas Water Quality Standards To Protect 
Threatened and Endangered Species
    Some comments assert that the water quality standards that EPA 
would rely upon in its oversight of TNRCC permitting actions are not 
adequate to ensure the protection of listed species. These comments 
assert that ``there has never been a full consultation process on the 
adequacy of the water quality standards.'' They also contend EPA's 
reliance is misplaced because TNRCC does not implement the 
antidegradation policy of its standards for pollutants assigned 
numerical criteria and has no implementation procedures for other 
narrative standards, including 30 TAC Sec. 307.6(b)(4). They also 
contend that EPA cannot rely on application of technology based 
standards in TPDES permit actions because EPA's effluent limitations 
guidelines are not premised on protecting listed species in Texas. In 
support of their assertion on nonimplementation of the antidegradation 
policy, the comments provided a copy of TNRCC answers to written 
interrogatories in a State permit adjudication (``contested case 
hearing'').
    Response: This comment appears to argue that, since some of Texas' 
water quality standards have not been subject to section 7 
consultation, then EPA is precluded from approving the State's 
application to administer the NPDES program. While EPA does not 
necessarily agree that it must, or even may, consult on the State's 
water quality standards, EPA believes there's simply no basis for the 
assertion that the state standards are inadequate to ensure that listed 
species will be protected. This issue has been fully evaluated by EPA 
and the Services. EPA provided a complete copy of TNRCC's program 
approval request, including copies of the State's water quality 
standards and continuing planning process, to the Services in the 
consultations on its program approval. It has moreover discussed the 
standards and their effect at some length with FWS and provided it with 
TNRCC interpretation on State standards of particular interest. EPA and 
the FWS both believe that EPA's action approving the State's submission 
is consistent with the requirements of section 7 of the ESA.
    EPA will continue, however, to consult on changes to Texas' 
standards and to work with Services on improving the protection 
afforded listed species by CWA. While the comment expresses some 
concerns with how TNRCC would implement some of its water quality 
standards, EPA is satisfied that it has the authority to ensure, 
through its oversight role, that water quality standards are applied in 
permits issued by the State, including those standards that protect 
listed species.
    EPA agrees that TNRCC has not adopted detailed implementation 
procedures for all of its standards, but disagrees that such procedures 
are always necessary or even desirable. Although detailed 
implementation measures generally assure that standards are objectively 
applied in a manner that addresses common water quality problems, 
uncommon or unforseen situations may arise that require additional 
measures to assure protection of aquatic uses. States are thus free to 
supplement the criteria in their standards and the procedures of their 
implementation plans to accommodate the needs of specific situations. 
See generally PUD No. 1 of Jefferson County v. Washington Dept. of 
Ecology, 511 U.S. 700 (1994). Adoption of broadly narrative 
supplemental standards without detailed implementation procedures is 
one way states may provide such flexibility.
    30 TAC Sec. 307.6(b)(4) is an example of such a supplemental 
standard. It is one of four narrative criteria in Sec. 307.6 (b) 
prohibiting toxicity in Texas waters. The three other criteria address 
acute and chronic toxicity from the standpoint of aquatic life and 
human health and their implementation relies on using standardized test 
methods to assure compliance with objectively calculated effluent 
limitations controlling specific toxic pollutants and/or whole effluent 
toxicity. Those test methods and limitations are in turn based on 
scientific knowledge on how toxicity generally affects aquatic life and 
humans, but do not address each and every potential effect imaginable. 
Potential gaps are filled by Sec. 307.6(b)(4), which provides:
    As interpreted by TNRCC, this standard requires it to impose case-
specific conditions in TPDES permits to protect aquatic and aquatic-
dependent species (including listed species) from the toxic effects of 
discharges when Texas' other toxic criteria and implementation 
procedures provide insufficient protection. The lack of specified 
implementation measures for this supplemental standard leaves TNRCC 
free to develop and apply ad hoc permit conditions specifically 
tailored to a specific problem. Whether or not specific ad hoc 
conditions are themselves sufficient may be assessed only in the 
context of an individual permit action.
    EPA is not relying on application of technology-based effluent 
limitations in TPDES permits to protect listed species. Section 
301(b)(1)(C) of the CWA and EPA regulations require that limitations 
more stringent than technology-based requirements shall be imposed 
whenever necessary to meet water quality standards. Where such more 
stringent limitations are not needed, however, TNRCC's application of 
technology-based effluent limitations would necessarily provide some 
degree of additional protection to aquatic life, if any, in a receiving 
stream.
108. Issue: ESA Sec. 7 Consultation Requirement for the CPP
    Some comments claim that ESA obliges EPA to engage in a separate 
consultation with the Services on its approval of Texas' Continuing 
Planning Process (CPP) and that the Agency cannot approve the TPDES 
program until those separate consultations occur.
    Response: Review and approval of a CPP is a necessary prerequisite 
to EPA's approval of a state NPDES program. See CWA Sec. 303(e); 40 CFR 
Sec. 130.5(c). Reviewing some elements of a CPP, e.g., an 
implementation plan showing how a state intends to apply its water 
quality standards in permit actions, may moreover be necessary to judge 
whether a proffered state program complies with other statutory 
requirements for program approval, e.g., CWA Sec. 402(b) (1)(A). CPPs 
are not collections of dusty documents adopted, approved, and archived 
some time in the distant past, however; the states update them 
frequently as they adopt new ways to meet changing water quality needs. 
Water quality management plans, for instance, may change each time a 
state develops and applies a new effluent limitation in an individual 
permitting action. Maintaining the currency of CPPs thus requires 
significant administrative efforts by multiple agencies in each state 
and by EPA as well. EPA Region 6 reviewed and approved the most up-to-
date CPP in connection with its program approval decision, thus 
ensuring its decision was based on the most current information.
    While EPA does not concede that consultation on the CPP is 
required, EPA did provide to FWS and NMFS--as part of the consultation 
on NPDES program approval--copies of the State's program approval 
submission, which included CPP provisions affecting application of 
Texas' water quality standards.

[[Page 51198]]

109. Issue: Objection To Adoption of Procedures To Insure Protection of 
Threatened and Endangered Species
    The American Forest and Paper Association states that it objects to 
EPA's adoption of procedures to protect endangered and threatened 
species. AFPA states initially that it supports the procedures 
contained in the draft Memorandum of Agreement between EPA and the 
State, which would provide that the Fish and Wildlife Service and 
National Marine Fisheries Service (the Services) may comment on draft 
State permits and coordinate with the Service to attempt to resolve the 
issue. If the issue is not resolved, EPA may object to the permit under 
any one of the grounds for EPA objections under section 402(d)(2) of 
the CWA. While AFPA supports these procedures as being within EPA's 
authority under the CWA and consistent with the AFPA decision, AFPA 
objects to procedures being developed based upon a draft MOA developed 
by headquarters' offices of EPA and the Services. AFPA contends that 
these procedures require the State to ``consult'' with the Services, 
and that they would impermissibly condition EPA's approval on the 
State's following procedures to protect endangered species. AFPA also 
asserts that the procedures are impermissible because EPA is only 
authorized to object to State permits based upon the specific 
authorities specified in the CWA. Finally, AFPA argues that EPA was not 
required to undergo section 7 consultation with regard to approval of 
Texas' program.
    Response: The procedures ultimately adopted by EPA and the Services 
are reflected in [cite relevant documents]. EPA believes that these 
procedures are consistent with its authorities and the AFPA decision. 
Each of AFPA's assertions is addressed below.

1. EPA Has Conditioned Its Approval on State's Agreement To ``Consult'' 
With the Services

    AFPA is incorrect in asserting that EPA has impermissibly 
conditioned its approval action on the State's agreement to ``consult'' 
with the Services. ``Consultation'' under section 7 of the Endangered 
Species Act is a process that imposes certain procedural obligations on 
the agency consulting with the Services. See 50 CFR Part 402. While EPA 
and the Services have developed procedures for ensuring the protection 
of endangered and threatened species, those procedures do not impose 
obligations, procedural or otherwise, on the State. Indeed, the 
agreement for coordination is between EPA and the Services and is 
designed to facilitate coordination among the federal agencies and 
timely communication of information and recommendations to the State. 
The State is not, however, required to follow any particular procedures 
in evaluating comments from the Services, or to defer to their 
judgment. The State's only obligation is to issue permits that comply 
with the procedural and substantive requirements of the CWA and the 
State program approved by EPA. Indeed, The EPA/TNRCC MOA AFPA supports 
has not changed as a result of consultation.
    Thus, it appears that AFPA may have misunderstood the coordination 
procedures in the draft national EPA/FWS MOA, which are the same in all 
material respects to the EPA/TNRCC MOA AFPA supports, and consist of 
the following basic elements: (1) An opportunity for the Services to 
comment on State permits; (2) an opportunity for the Services to 
contact EPA if their comments are not adequately addressed by the 
State; and (3) an opportunity for EPA to object to the permit if it 
fails to meet the requirements of the CWA. Specifically, the procedures 
first note that TNRCC is required under 40 CFR 124.10(c)(1)(iv) to 
provide copies of draft permits to the Services. This obligation is not 
altered or augmented under the procedures; EPA has simply made the 
commitment to ensure that the State carries out its CWA obligation in 
this regard. The procedures also state that EPA will ``encourage'' the 
State to highlight those permits most in need of Service review based 
on potential impacts to federally listed species; the State, however, 
is not obligated to provide this information. Where the Service has 
concerns that the draft permit is likely to adversely affect a 
federally listed species or critical habitat, the Service or EPA will 
contact the State, preferably within 10 days of receipt of the notice 
of the draft permit, and include relevant information to the State. If 
the Service is unable to resolve its comments, the Service will contact 
EPA within 5 days, and EPA will coordinate with the State to ensure 
that the permit meets applicable CWA requirements. Where EPA believes 
that the permit is likely to adversely affect a federally listed 
species or critical habitat, EPA may make a formal objection, where 
consistent with its CWA authority, or take other appropriate action. 
Where a State permit is likely to jeopardize the continued existence of 
a listed species or result in the destruction or adverse modification 
of critical habitat, EPA will use the full extent of its CWA authority 
to object to the permit. In either case, the MOA makes clear that EPA 
would only object where authorized by the CWA to do so.
    Thus, while the procedures developed by EPA and the Services 
articulate how EPA and the Services will work together, and with the 
State, to resolve issues that arise, the State has not agreed to 
``consult'' with the Services, or take any other actions not required 
by the CWA, as a ``condition'' for obtaining EPA's approval of its 
program. EPA is hopeful that the procedures will facilitate sharing of 
information among the Agencies with the State, so that the State will 
have the benefit of timely federal agency input when it makes its 
permitting decisions.

2. Section 7 Consultation is Not Required for EPA's Approval Action

    AFPA argues that section 7 does not apply to EPA's action approving 
the State's application to administer the NPDES program. AFPA has taken 
this position in several cases challenging EPA's decision to consult 
when it approved the programs submitted by Louisiana and Oklahoma. The 
Fifth Circuit in AFPA did not address the applicability of the 
procedures under section 7 to EPA's approval action for Louisiana. See 
137 F.3d 298, n.5. EPA believes that section 7 does apply to its 
action, for the reasons explained in its briefs in that case and in a 
similar case (American Forest Paper Assoc. v. U.S. EPA, No. 97-9506 
(10th Cir. 1998)), which are incorporated in this response by 
reference. Moreover, even if EPA was not required by law to consult 
with the Services, EPA believes it was within its discretion to do so.
    AFPA also argues that formal consultation was not required because 
EPA's action was not likely to adversely affect listed species, a 
contention with which EPA Region 6 initially agreed. Under the 
Service's section 7 regulations, however, formal consultation is 
required unless the Service concurs in writing that the action is not 
likely to adversely affect listed species. NMFS agreed with EPA's 
``unlikely to adversely affect'' determination, based in part on study 
of sea turtle mortality in Texas waters, indicates current marine water 
quality in Texas is unlikely to adversely affect sea turtles in NMFS 
trusteeship. FWS, faced with a materially different situation for 
listed species it protects, declined to concur with EPA's 
determination. EPA thus consulted formally with FWS, which has rendered 
a ``no jeopardy'' biological opinion.

[[Page 51199]]

3. EPA Does Not Have Authority To Object to a Permit for Failure to 
Comply With the ESA

    The MOA between EPA and TNRCC, as well as the procedures developed 
by EPA and the Services, make clear that EPA will only object to a 
State permit where doing so would be within its authority under the 
CWA. Section 301(b)(1)(C) of the CWA and 40 CFR 122.44(d)(1) require 
that any permit ensure compliance with State water quality standards. 
Under 40 CFR 123.44(c)(8), EPA is authorized to object to a State 
permit that fails to satisfy the requirements of section 122.44(d). 
Texas water quality standards are designed to ensure the protection of 
aquatic and aquatic-dependent species, including any such species that 
are listed as endangered or threatened. See Letter from Margaret 
Hoffman, TNRCC, to Lawrence Starfield, EPA (June 29, 1998). The State's 
standards include a requirement that ``Water in the state shall be 
maintained to preclude adverse toxic effects on aquatic and terrestrial 
wildlife * * * resulting from contact, consumption of aquatic 
organisms, consumption of water or any combination of above.'' 30 Texas 
Administrative Code 307.6(b)(4). Thus, if EPA were to find that a 
proposed state permit would allow pollutant discharges that would 
adversely affect aquatic life in the receiving water that happened to 
be listed as endangered or threatened, the Agency would have the 
authority to object to the permit for failure to ensure compliance with 
State water quality standards. If the adverse effects were so severe as 
to likely jeopardize the continued existence of the species, EPA 
intends to utilize the full extent of its CWA objection authority to 
avoid likely jeopardy. However, in these cases, EPA would not use its 
objection authority to enforce requirements of the Endangered Species 
Act. Instead, EPA intends to consider the needs of listed species in 
deciding whether to object to a State permit that fails to ensure 
compliance with State water quality standards and which is, 
consequently, outside the guidelines and requirements of the CWA. EPA 
will also inform FWS if it believes, based on its review of a permit 
action, that there may be an adverse impact on listed species.

4. The Procedures Are Inconsistent With the Fifth Circuit Decision in 
AFPA

    EPA believes that the endangered species coordination procedures 
are fully consistent with the AFPA decision. The court found in that 
case that EPA lacked statutory authority to condition its approval of a 
State application to administer the NPDES program on factors not 
enumerated in section 402(b) of the CWA. EPA has, in fact, approved the 
State's program based solely on the criteria contained in section 
402(b) of the CWA and implementing regulations. Moreover, as explained 
previously, EPA has not ``conditioned'' its approval of Texas'' 
application on any factors related to endangered species protection. 
The procedures developed in consultation consist of commitments between 
EPA and FWS to provide information and recommendations to each other 
and the State in a timely fashion, and statements by EPA regarding how 
it intends to exercise its oversight authority in the future. The State 
of Texas' obligations in administering the TPDES program consist solely 
of complying with the procedural and substantive obligations under 
section 402(b) of the CWA and relevant CWA regulations. These include 
the obligations to provide copies of draft permits to the Services (40 
CFR 124.10(c)(1)(iv)), consider the Services' views in its permitting 
decisions (40 CFR 124.59(c)) and issue permits that ensure compliance 
with water quality standards (40 CFR 122.44(d)(1)). Nothing in the 
coordination procedures to which the various agencies have agreed, or 
in any aspect of EPA's approval action, has augmented the obligations 
the CWA imposes on the State. Moreover, these procedures are consistent 
with AFPA because, as explained previously, EPA would only object to 
State permits that EPA determines are outside the guidelines and 
requirements of the CWA.

Conclusion

    The written agreements of this authorization process will formalize 
the partnership which has existed between EPA and TNRCC for many years, 
and will provide the structure for the side-by-side relationship 
between the two agencies. Region 6 will continue to be ready and 
available in its new oversight role to work with TNRCC and the citizens 
of Texas to ensure the environment is protected.
    The TPDES program, the 44th state program to be authorized under 
CWA Sec. 402, includes point source discharges, pretreatment, federal 
facilities and sewage sludge.

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[[Page 51200]]

[GRAPHIC] [TIFF OMITTED] TN24SE98.000



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[[Page 51201]]

Other Federal Statutes

A. National Historic Preservation Act

    Pursuant to Section 106 of the National Historic Preservation Act, 
16 USC Sec. 470(f), federal agencies must provide the Advisory Council 
of Historic Preservation opportunity for comment on the effects their 
undertakings may have on the Nation's historic properties. EPA has 
provided such an opportunity in its review of the TPDES program 
approval request by consulting with the Advisory Council's delegate, 
the Texas Historical Commission. No feasible measures for further 
reducing potential adverse effects on historic properties were 
developed. Region 6 understands, however, that the Texas Historical 
Commission is independently discussing means of improving its 
coordination with TNRCC under State law.

B. Endangered Species Act

    Section 7(a)(2) of the Endangered Species Act (ESA), 33 USC 
1536(a)(2), requires that federal agencies insure, in consultation with 
the United States Fish & Wildlife Service (FWS) and/or National Marine 
Fisheries Service (NMFS), that actions they undertake, authorize, or 
fund are unlikely to jeopardize the continued existence of listed 
threatened and endangered species or result in destruction or adverse 
modification of critical habitat. EPA consulted with both FWS and NMFS 
in reviewing the TPDES program approval request. Difficult issues arose 
and were resolved in its consultation with FWS.
    After careful consideration in formal consultation, FWS concluded 
in a biological opinion that approving the TPDES program is unlikely to 
jeopardize listed species if applicable water quality standards are 
fully applied in TPDES permits, despite some loss of federal authority 
in some situations. With FWS assistance, EPA will use its oversight 
procedures to assure the standards are in fact applied, particularly in 
waters on which listed species depend. This effort will result in more 
attention, particularly of minor state permit actions, than EPA devotes 
to oversight of any other state NPDES program in Region 6. Both EPA and 
FWS are additionally committed to seeking even more protection for 
listed species by continuing to consider their needs in EPA's review of 
revisions to Texas' water quality standards. Region 6 believes these 
actions will increase the overall protection CWA affords listed species 
in Texas.

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 505(11)(a)(6); thus approval of TNRCC's 
TPDES program does not affect Texas' coastal zone and is 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.

Notice of Decision

    I hereby provide public notice of the Agency's approval of the 
application by the State of Texas for approval to administer, in 
accordance with 40 CFR 123, the TPDES program.

    Dated: September 14, 1998.
Gregg A. Cooke,
Regional Administrator Region 6.
[FR Doc. 98-25314 Filed 9-23-98; 8:45 am]
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