74R10161 JJT-D
          By Montford                                             S.B. No. 12
          Substitute the following for S.B. No. 12:
          By Counts                                           C.S.S.B. No. 12
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to administrative hearings for the Texas Natural Resource
    1-3  Conservation Commission provided by the State Office of
    1-4  Administrative Hearings.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Subchapter C, Chapter 2003, Government Code, is
    1-7  amended by adding Sections 2003.047 and 2003.048 to read as
    1-8  follows:
    1-9        Sec. 2003.047.  NATURAL RESOURCE CONSERVATION DIVISION.  (a)
   1-10  The office shall establish a natural resource conservation division
   1-11  to perform the contested case hearings for the Texas Natural
   1-12  Resource Conservation Commission.
   1-13        (b)  The division shall conduct hearings relating to
   1-14  contested cases before the commission, other than a hearing
   1-15  conducted by one or more commissioners.  The commission by rule may
   1-16  delegate to the division the responsibility to hear any other
   1-17  matter before the commission if consistent with the
   1-18  responsibilities of the division.
   1-19        (c) Only an administrative law judge in the division may
   1-20  conduct a hearing on behalf of the commission.  An administrative
   1-21  law judge in the division may conduct hearings for other state
   1-22  agencies as time allows.  The office may transfer an administrative
   1-23  law judge to the division on a permanent or temporary basis and may
   1-24  contract with qualified individuals to serve as temporary
    2-1  administrative law judges as necessary.
    2-2        (d)  To be eligible to preside at a hearing on behalf of the
    2-3  commission, an administrative law judge, regardless of temporary or
    2-4  permanent status, must be licensed to practice law in this state
    2-5  and have the expertise necessary to conduct hearings regarding
    2-6  technical or other specialized subjects that may come before the
    2-7  commission.
    2-8        (e)  When the office receives jurisdiction of a proceeding,
    2-9  the commission shall provide to the administrative law judge a list
   2-10  of issues or areas that must be addressed.  In addition, the
   2-11  commission may identify and provide to the administrative law judge
   2-12  at any time additional issues or areas that must be addressed.
   2-13        (f)  The office and the commission jointly shall adopt rules
   2-14  providing for certification to the commission of an issue that
   2-15  involves an ultimate finding of compliance with or satisfaction of
   2-16  a statutory standard the determination of which is committed to the
   2-17  discretion or judgment of the commission by law.  The rules must
   2-18  address, at a minimum, the issues that are appropriate for
   2-19  certification and the procedure to be used in certifying the issue.
   2-20  Each agency shall publish the jointly adopted rules.
   2-21        (g)  An administrative law judge hearing a case on behalf of
   2-22  the commission, on the judge's own motion or on motion of a party
   2-23  and after notice and an opportunity for a hearing, may impose
   2-24  appropriate sanctions as provided by Subsection (h) against a party
   2-25  or its representative for:
   2-26              (1)  filing a motion or pleading that is groundless and
   2-27  brought:
    3-1                    (A)  in bad faith;
    3-2                    (B)  for the purpose of harassment; or
    3-3                    (C)  for any other improper purpose, such as to
    3-4  cause unnecessary delay or needless increase in the cost of the
    3-5  proceeding;
    3-6              (2)  abuse of the discovery process in seeking, making,
    3-7  or resisting discovery; or
    3-8              (3)  failure to obey an order of the administrative law
    3-9  judge or the commission.
   3-10        (h)  A sanction imposed under Subsection (g) may include, as
   3-11  appropriate and justified, issuance of an order:
   3-12              (1)  disallowing further discovery of any kind or of a
   3-13  particular kind by the offending party;
   3-14              (2)  charging all or any part of the expenses of
   3-15  discovery against the offending party or its representatives;
   3-16              (3)  holding that designated facts be considered
   3-17  admitted for purposes of the proceeding;
   3-18              (4)  refusing to allow the offending party to support
   3-19  or oppose a designated claim or defense or prohibiting the party
   3-20  from introducing designated matters in evidence;
   3-21              (5)  disallowing in whole or in part requests for
   3-22  relief by the offending party and excluding evidence in support of
   3-23  those requests; and
   3-24              (6)  striking pleadings or testimony, or both, in whole
   3-25  or in  part.
   3-26        Sec. 2003.048.  NATURAL RESOURCE CONSERVATION COMMISSION
   3-27  HEARINGS FEE.  The office shall charge the Texas Natural Resource
    4-1  Conservation Commission a fixed annual fee rather than an hourly
    4-2  rate for services rendered by the office to the commission.  The
    4-3  office and the Texas Natural Resource Conservation Commission shall
    4-4  negotiate the amount of the fixed fee biennially, subject to the
    4-5  approval of the governor, to coincide with the commission's
    4-6  legislative appropriations request.
    4-7        SECTION 2.  Subchapter H, Chapter 5, Water Code, is amended
    4-8  to read as follows:
    4-9  SUBCHAPTER H.  DELEGATION OF HEARINGS <OFFICE OF HEARING EXAMINERS>
   4-10        Sec. 5.311.  <CREATION OF OFFICE.  (a)  The commission shall
   4-11  create an office of hearing examiners to assist the commission in
   4-12  carrying out its powers and duties under this code.>
   4-13        <(b)  The office of hearing examiners is independent of the
   4-14  executive director and the divisions of the commission and is under
   4-15  the exclusive control of the commission.>
   4-16        <Sec. 5.312.  ORGANIZATION OF OFFICE OF HEARING EXAMINERS.
   4-17  (a)  The office of hearing examiners shall be under the direction
   4-18  of the chief hearing examiner.>
   4-19        <(b)  The chief hearing examiner and all assistant hearing
   4-20  examiners employed in the office of hearing examiners shall be
   4-21  attorneys licensed to practice law in this state and shall be
   4-22  employed by the commission.>
   4-23        <Sec. 5.313.>  DELEGATION OF RESPONSIBILITY.  (a)  The
   4-24  commission may delegate to an administrative law judge of the State
   4-25  Office of Administrative Hearings <a hearing examiner> the
   4-26  responsibility to hear any matter before the commission.
   4-27        (b)  The administrative law judge <A hearing examiner shall
    5-1  prepare for and hold any hearing as directed by the commission and>
    5-2  shall report to the commission on the hearing in the manner
    5-3  provided by law.
    5-4        Sec. 5.312 <5.314>.  TIME LIMIT FOR ISSUANCE OR DENIAL OF
    5-5  PERMITS.  (a)  Except as provided in Subsection (b), all permit
    5-6  decisions shall be made within 180 days of the receipt of the
    5-7  permit application or application amendment or the determination of
    5-8  administrative completeness, whichever is later.
    5-9        (b)  This section does not apply to permits issued under
   5-10  federally delegated or approved programs unless allowed under that
   5-11  program.
   5-12        Sec. 5.313.  HEARING EXAMINERS REFERENCED IN LAW.  Any
   5-13  reference in law to a hearing examiner who has a duty related to a
   5-14  case pending before the commission means an administrative law
   5-15  judge of the State Office of Administrative Hearings.
   5-16        SECTION 3.  Subsections (a), (b), and (c), Section 26.021,
   5-17  Water Code, are amended to read as follows:
   5-18        (a)  Except for those hearings required to be held before the
   5-19  commission under Section 26.0191(b) of this code, the commission
   5-20  may authorize the chief administrative law judge of the State
   5-21  Office of Administrative Hearings <hearing examiner> to call and
   5-22  hold hearings on any subject on which the commission may hold a
   5-23  hearing.
   5-24        (b)  The commission may also authorize the chief
   5-25  administrative law judge <hearing examiner> to delegate to one or
   5-26  more administrative law judges <hearing examiners> the authority to
   5-27  hold any hearing the chief administrative law judge calls <called
    6-1  by him>.
    6-2        (c)  At any hearing called under this section, the chief
    6-3  administrative law judge or the administrative law judge to whom a
    6-4  hearing is delegated may <by the chief hearing examiner, he or the
    6-5  person delegated the authority by him to hold the hearing is
    6-6  empowered to> administer oaths and receive evidence.
    6-7        SECTION 4.  Subsections (a), (b), and (c), Section 28.029,
    6-8  Water Code, are amended to read as follows:
    6-9        (a)  The commission may authorize the chief administrative
   6-10  law judge of the State Office of Administrative Hearings <hearing
   6-11  examiner> to call and hold hearings on any subject on which the
   6-12  commission may hold a hearing.
   6-13        (b)  The commission may also authorize the chief
   6-14  administrative law judge <hearing examiner> to delegate to one or
   6-15  more administrative law judges <hearing examiners> the authority to
   6-16  hold any hearing the chief administrative law judge calls <called
   6-17  by him>.
   6-18        (c)  At any hearing called under this section, the chief
   6-19  administrative law judge or the administrative law judge to whom a
   6-20  hearing is delegated may <by the chief hearing examiner, he or the
   6-21  person delegated the authority by him to hold the hearing is
   6-22  empowered to> administer oaths and receive evidence.
   6-23        SECTION 5.  Subsections (a), (b), and (c), Section 31.009,
   6-24  Water Code, are amended to read as follows:
   6-25        (a)  The commission may authorize the chief administrative
   6-26  law judge of the State Office of Administrative Hearings <hearing
   6-27  examiner> to call and hold hearings on any subject on which the
    7-1  commission may hold a hearing.
    7-2        (b)  The commission may also authorize the chief
    7-3  administrative law judge <hearing examiner> to delegate to one or
    7-4  more administrative law judges <hearing examiners> the authority to
    7-5  hold a hearing the chief administrative law judge calls <called by
    7-6  the chief hearing examiner>.
    7-7        (c)  At a hearing called under this section, the chief
    7-8  administrative law judge or the administrative law judge to whom a
    7-9  hearing is delegated <by the chief hearing examiner, the chief
   7-10  hearing examiner or the person delegated the authority by him to
   7-11  hold the hearing> may administer oaths and receive evidence.
   7-12        SECTION 6.  Subsections (a) and (b), Section 361.0831, Health
   7-13  and Safety Code, are amended to read as follows:
   7-14        (a)  Unless required for the disposition of ex parte matters
   7-15  authorized by law, or unless permitted by Section 2001.061,
   7-16  Government Code <17, Administrative Procedure and Texas Register
   7-17  Act (Article 6252-13a, Vernon's Texas Civil Statutes)>, a hearings
   7-18  examiner <of the commission> may not communicate, directly or
   7-19  indirectly, with any employee of the commission <who is not an
   7-20  employee of the office of hearings examiners>, any commissioner, or
   7-21  any party to a hearing conducted by the commission in connection
   7-22  with any issue of fact or law pertaining to a contested case in
   7-23  which the commission or party is involved.
   7-24        (b)  Except for communications allowed under Subsection (a),
   7-25  an employee of the commission, a commissioner, or a party to a
   7-26  hearing conducted by the commission may not attempt to influence
   7-27  the finding of facts or the application of law or rules by a
    8-1  hearings examiner <of the commission> except by proper evidence,
    8-2  pleadings, and legal argument with notice and opportunity for all
    8-3  parties to participate.
    8-4        SECTION 7.  Section 361.0832, Health and Safety Code, is
    8-5  amended by amending Subsection (a) and by adding Subsection (g) to
    8-6  read as follows:
    8-7        (a)  After hearing evidence and receiving legal arguments, a
    8-8  hearings examiner <of the commission> shall make findings of fact,
    8-9  conclusions of law, and any ultimate findings required by statute,
   8-10  all of which shall be separately stated.  The hearings examiner
   8-11  shall make a proposal for decision to the commission and shall
   8-12  serve the proposal for decision on all parties.  The commission
   8-13  shall consider and act on the proposal for decision.
   8-14        (g)  To the extent of a conflict between this section and
   8-15  Section 2001.058(e), Government Code, this section controls.
   8-16        SECTION 8.  As soon as practicable, the chief administrative
   8-17  law judge of the State Office of Administrative Hearings shall
   8-18  consult with the chief administrative hearing examiner of the Texas
   8-19  Natural Resource Conservation Commission to assist the judge in:
   8-20              (1)  determining the number of and requirements for
   8-21  administrative law judges needed to conduct Texas Natural Resource
   8-22  Conservation Commission hearings effectively; and
   8-23              (2)  making necessary administrative changes in the
   8-24  State Office of Administrative Hearings.
   8-25        SECTION 9.  (a)  On September 1, 1995, all equipment, data,
   8-26  facilities, and other items of the office of hearing examiners of
   8-27  the Texas Natural Resource Conservation Commission are transferred
    9-1  to the State Office of Administrative Hearings.
    9-2        (b)  If a hearing examiner or administrative law judge
    9-3  employed by the office of hearing examiners of the Texas Natural
    9-4  Resource Conservation Commission is hearing a case pending before
    9-5  the commission as of the effective date of this Act and that
    9-6  individual is offered and accepts a position as an administrative
    9-7  law judge of the State Office of Administrative Hearings, the chief
    9-8  administrative law judge of the office shall assign the case to
    9-9  that individual to render a proposal for decision.
   9-10        SECTION 10.  (a)  Except as provided in Subsection (b) of
   9-11  this section, this Act takes effect September 1, 1995.
   9-12        (b)  Section 8 of this Act takes effect immediately.
   9-13        SECTION 11.  The importance of this legislation and the
   9-14  crowded condition of the calendars in both houses create an
   9-15  emergency and an imperative public necessity that the
   9-16  constitutional rule requiring bills to be read on three several
   9-17  days in each house be suspended, and this rule is hereby suspended,
   9-18  and that this Act take effect and be in force from and after its
   9-19  passage, and it is so enacted.