By Bosse                                        H.B. No. 1159

      75R2824 JJT-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to public participation in the Texas Natural Resource

 1-3     Conservation Commission's processes for granting authorizations and

 1-4     other contested cases.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Section 5.115, Water Code, is amended to read as

 1-7     follows:

 1-8           Sec. 5.115.  PERSONS AFFECTED IN COMMISSION HEARINGS; ACTION

 1-9     ON REQUEST FOR HEARING; NOTICE OF APPLICATION.  (a) For the purpose

1-10     of an  administrative hearing held by or for the commission

1-11     involving a contested case, "affected person," [or] "person

1-12     affected," or "person who may be affected" means a person who has a

1-13     personal justiciable interest related to a legal right, duty,

1-14     privilege, power, or economic interest affected by the

1-15     administrative hearing.  An interest common to members of the

1-16     general public does not qualify as a personal justiciable interest.

1-17           (b)  The commission is not required to hold a hearing if the

1-18     commission determines that the basis of a person's request for a

1-19     hearing as an affected person is not reasonable or is not supported

1-20     by competent evidence.  The commission shall adopt rules specifying

1-21     factors which must be considered in determining whether a person is

1-22     an affected person in any contested case arising under the air,

1-23     waste, or water programs within the commission's jurisdiction and

1-24     whether an affected association is entitled to standing in

 2-1     contested case hearings.  The rules must include:

 2-2                 (1)  only objective criteria for determining whether a

 2-3     hearing request is reasonable; and

 2-4                 (2)  guidelines designed to assist members of the

 2-5     public in determining:

 2-6                       (A)  whether a member of the public may be an

 2-7     affected party;

 2-8                       (B)  what the commission requires to demonstrate

 2-9     that a request for a hearing is reasonable; and

2-10                       (C)  what evidence the commission will consider

2-11     competent to support the request.

2-12           (c)  In determining whether to grant an affected person's

2-13     request for a hearing on an application for commission

2-14     authorization for an activity, the commission may not consider the

2-15     relative significance of the effects the activity may have on the

2-16     person.

2-17           (d) [(b)]  At the time an application for a permit or license

2-18     under this code is filed with the executive director and is

2-19     administratively complete, the commission shall give notice of the

2-20     application to any person who may be affected by the granting of

2-21     the permit or license.

2-22           (e) [(c)]  At the time an application for any formal action

2-23     by the commission that will affect lands dedicated to the permanent

2-24     school fund is filed with the executive director or the commission

2-25     and is administratively complete, the commission shall give notice

2-26     of the application to the School Land Board.  Notice shall be

2-27     delivered by certified mail, return receipt requested, addressed to

 3-1     the deputy commissioner of the asset management division of the

 3-2     General Land Office.  Delivery is not complete until the return

 3-3     receipt is signed by the deputy commissioner of the asset

 3-4     management division of the General Land Office and returned to the

 3-5     commission.

 3-6           (f) [(d)]  The commission shall adopt rules for the notice

 3-7     required by this section.

 3-8           (g) [(e)]  The notice must state:

 3-9                 (1)  the identifying number given the application by

3-10     the commission;

3-11                 (2)  the type of permit or license sought under the

3-12     application;

3-13                 (3)  the name and address of the applicant;

3-14                 (4)  the date on which the application was submitted;

3-15     and

3-16                 (5)  a brief summary of the information included in the

3-17     permit application.

3-18           (h) [(f)]  The notice to the School Land Board under this

3-19     section shall additionally:

3-20                 (1)  state the location of the permanent school fund

3-21     land to be affected; and

3-22                 (2)  describe any foreseeable impact or effect of the

3-23     commission's action on permanent school fund land.

3-24           (i) [(g)]  A formal action or ruling by the commission on an

3-25     application affecting permanent school fund land that is made

3-26     without the notice required by this section is voidable by the

3-27     School Land Board as to any permanent school fund lands affected by

 4-1     the action or ruling.

 4-2           SECTION 2.  Subchapter D, Chapter 5, Water Code, is amended

 4-3     by adding Sections 5.123-5.126 to read as follows:

 4-4           Sec. 5.123.  PUBLIC PARTICIPATION IN PERMIT DECISIONS.  (a)

 4-5     The commission shall encourage public participation in decisions

 4-6     regarding actions the commission may take on a permit application.

 4-7           (b)  The commission by rule shall provide an opportunity for

 4-8     public comment on a decision the commission or executive director

 4-9     must make on a permit application.  Rules adopted under this

4-10     section must provide for notice to interested persons and the

4-11     public that includes guidance on making a comment.  This subsection

4-12     does not affect the commission's duty to provide a hearing

4-13     otherwise required by law.

4-14           (c)  In making a decision on a permit application, the

4-15     commission shall:

4-16                 (1)  consider each comment received as provided by

4-17     Subsection (b); and

4-18                 (2)  make a written response to the comments.

4-19           (d)  If public comment or a public hearing is not expressly

4-20     required by federal or state law, the commission by rule may

4-21     exclude from any public comment or public hearing requirement each

4-22     type of action on a permit application that the commission

4-23     determines cannot affect a member of the public adversely.

4-24           (e)  In this section, "permit application" includes an

4-25     application for the issuance, renewal, or amendment of a permit,

4-26     license, registration, variance, or other authorization.

4-27           Sec. 5.124.  RECOVERY OF CERTAIN PUBLIC PARTICIPATION

 5-1     EXPENSES.  (a) The commission by rule shall adopt a procedure by

 5-2     which the commission may require a permit applicant to reimburse

 5-3     another person's reasonable expenses incurred in a local review

 5-4     committee process under Section 361.063, Health and Safety Code, or

 5-5     in another proceeding related to the application if:

 5-6                 (1)  after the commission or a hearings examiner has

 5-7     taken jurisdiction in a contested case hearing on the permit

 5-8     application, the permit applicant seeks to withdraw the application

 5-9     without prejudice to the permit applicant's eligibility to apply

5-10     for the same or a similar authorization, amendment, or renewal in

5-11     the future;

5-12                 (2)  the commission denies the permit application or

5-13     revises the commission's draft of the authorization, amendment, or

5-14     renewal because of information or a technical, legal, or policy

5-15     evaluation provided by the person who requests reimbursement of

5-16     expenses under this section; or

5-17                 (3)  a fact material to the application is

5-18     misrepresented in or omitted from the application, testimony, or

5-19     other information related to the permit and provided to the

5-20     commission by the applicant.

5-21           (b)  The commission shall apply this section to create:

5-22                 (1)  disincentives for an applicant to file a

5-23     speculative, incomplete, or inadequate application; and

5-24                 (2)  incentives for:

5-25                       (A)  the public to participate in important

5-26     policy, legal, or technical issues before the commission in a

5-27     manner likely to assist the commission's review of applications;

 6-1     and

 6-2                       (B)  a permit applicant to submit an application

 6-3     that is complete and accompanied by accurate information regarding

 6-4     all material facts, including facts that may not support the

 6-5     application.

 6-6           (c)  The commission shall determine whether a person who

 6-7     requests reimbursement under this section is entitled to the

 6-8     reimbursement and the amount of any reimbursement.  In determining

 6-9     the amount of reimbursement, the commission shall include expenses

6-10     for discovery and fees of attorneys and  experts in addition to

6-11     factors provided by Subsections (d) and (e).  The commission shall

6-12     base a determination of the amount of reimbursement under this

6-13     section on sworn affidavits or evidence presented at a hearing.

6-14     The commission may issue an order for reimbursement under this

6-15     section that represents a settlement agreement between the

6-16     applicant and the person who requested reimbursement.

6-17           (d)  For reimbursement under Subsection (a)(1), the

6-18     commission shall require the permit applicant to pay the reasonable

6-19     expenses incurred by the person who makes the reimbursement request

6-20     so that, after payment, the person will be in an economic position

6-21     to participate in a proceeding on a later application for the same

6-22     or a similar permit by the same applicant that is approximately the

6-23     same economic position as the person was in for the proceedings

6-24     regarding the withdrawn application.

6-25           (e)  For reimbursement under Subsection (a)(3), the

6-26     commission shall include in the determination of the person's

6-27     reasonable expenses the person's reasonable expenses associated

 7-1     with:

 7-2                 (1)  discovering the misrepresentation or omission;

 7-3                 (2)  presenting the commission with information

 7-4     regarding the misrepresentation or omission; and

 7-5                 (3)  any other act the commission finds relevant to the

 7-6     commission's determination.

 7-7           (f)  The commission by rule may:

 7-8                 (1)  provide for acts by a permit applicant  similar to

 7-9     those described by Subsection (a) for which the commission may

7-10     require the permit applicant to reimburse another person's

7-11     reasonable expenses related to a hearing on the permit application;

7-12                 (2)  require an applicant to provide a bond in an

7-13     amount sufficient to reimburse other persons if the commission

7-14     orders reimbursement under rules adopted under this section; and

7-15                 (3)  clarify the types of expenses the commission

7-16     considers reasonable and subject to reimbursement under this

7-17     section.

7-18           (g)  Unless an expense claimed in a request for reimbursement

7-19     under this section is addressed in rules adopted under Subsection

7-20     (f)(3), the commission shall presume that the expense is reasonable

7-21     until the permit applicant demonstrates that the expense is not

7-22     reasonable.

7-23           (h)  In this section, "permit application" has the meaning

7-24     assigned by Section 5.123.

7-25           Sec. 5.125.  ENFORCEMENT OF REIMBURSEMENT ORDER.  (a) The

7-26     commission's order for payment of reimbursement issued under

7-27     Section 5.124 is a debt and may be enforced by a court as any other

 8-1     debt.

 8-2           (b)  The commission may not consider a permit application, as

 8-3     defined by Section 5.123, made by a person who has not fully paid a

 8-4     reimbursement ordered under Section 5.124.

 8-5           Sec. 5.126.  EFFECTS OF WITHDRAWAL OF APPLICATIONS.  The

 8-6     commission by rule shall allow a person who files a permit

 8-7     application, as defined by Section 5.123, to withdraw that

 8-8     application.  In adopting rules under this section, the commission

 8-9     shall distinguish circumstances under which the applicant may

8-10     withdraw an application and:

8-11                 (1)  by right, may file the same or a similar permit

8-12     application in the future for the same or a similar authorization;

8-13     or

8-14                 (2)  may not file a permit application for the same or

8-15     a similar authorization until the 10th anniversary of the date the

8-16     application is withdrawn.

8-17           SECTION 3.  Section 382.056(d), Health and Safety Code, is

8-18     amended to read as follows:

8-19           (d)  Except as provided by Section 382.0561 or Subsection

8-20     (e), the commission or its delegate shall hold a public hearing on

8-21     the permit application or permit renewal application before

8-22     granting the permit or renewal if a person who may be affected by

8-23     the emissions, or a member of the legislature from the general area

8-24     in which the facility or proposed facility is located, requests a

8-25     hearing within the period set by commission rule.  The commission

8-26     shall not hold a hearing if the basis of a request by a person who

8-27     may be affected is determined to be unreasonable.  Reasons for

 9-1     which a request for a hearing on a permit amendment, modification,

 9-2     or renewal shall be considered to be unreasonable include, but are

 9-3     not limited to, an amendment, modification, or renewal that would

 9-4     not result in an increase in allowable emissions and would not

 9-5     result in the emission of an air contaminant not previously

 9-6     emitted.  The determination of whether a request is considered to

 9-7     be reasonable shall be made in accordance with rules adopted under

 9-8     Sections 5.115(b) and (c), Water Code.

 9-9           SECTION 4.  Section 382.0561(c), Health and Safety Code, is

9-10     amended to read as follows:

9-11           (c)  The commission or its designee shall hold a public

9-12     hearing on a federal operating permit, a reopening of a federal

9-13     operating permit, or renewal application before granting the permit

9-14     or renewal if within the public comment period a person who may be

9-15     affected by the emissions or a member of the legislature from the

9-16     general area in which the facility is located requests a hearing.

9-17     The commission or its designee is not required to hold a hearing if

9-18     the basis of the request by a person who may be affected is

9-19     determined to be unreasonable.  The determination of whether a

9-20     request is considered to be reasonable shall be made in accordance

9-21     with rules adopted under Sections 5.115(b) and (c), Water Code.

9-22           SECTION 5.  This Act takes effect September 1, 1997.

9-23           SECTION 6.  (a)  The Texas Natural Resource Conservation

9-24     Commission, as soon as practicable, shall adopt rules under Section

9-25     5.115, Water Code, as amended by this Act, and Sections

9-26     5.123-5.126, Water Code, as added by this Act.  The rules shall

9-27     become effective not later than December 1, 1998.

 10-1          (b)  Except as provided by Subsection (c) of this section,

 10-2    the changes in law made by Sections 1-4 of this Act apply only to

 10-3    an application  for the issuance, renewal, or amendment of a

 10-4    permit, license,  registration, variance, or other authorization

 10-5    that is filed with the Texas Natural Resource Conservation

 10-6    Commission on or after the date the rules  adopted as provided by

 10-7    Subsection (a) of this section take effect.

 10-8          (c)  Sections 5.115(c) and 5.123(a), Water Code, as added by

 10-9    this Act, take effect September 1, 1997, and apply to an

10-10    application for the issuance, renewal, or  amendment of a permit,

10-11    license, registration, variance, or other  authorization that is

10-12    filed with the Texas Natural Resource Conservation Commission on or

10-13    after that date, including the evaluation of a request for a

10-14    hearing on such an application made under Section 382.056(d) or

10-15    382.0561(c), Health and Safety Code, as amended by this Act.

10-16          SECTION 7.  The importance of this legislation and the

10-17    crowded condition of the calendars in both houses create an

10-18    emergency and an imperative public necessity that the

10-19    constitutional rule requiring bills to be read on three several

10-20    days in each house be suspended, and this rule is hereby suspended.