75R10504 JJT-F                           

         By Talton                                             H.B. No. 2444

         Substitute the following for H.B. No. 2444:

         By Allen                                          C.S.H.B. No. 2444

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to certain environmental permitting procedures of the

 1-3     Texas Natural Resource Conservation Commission.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Chapter 5, Water Code, is amended by adding

 1-6     Subchapter J to read as follows:

 1-7             SUBCHAPTER J.  ENVIRONMENTAL PERMITTING PROCEDURES

 1-8           Sec. 5.371.  GENERAL PERMITTING PROCEDURES.  (a)  This

 1-9     subchapter applies to commission procedures for an application to

1-10     issue, amend, or renew a permit for which public notice and an

1-11     opportunity for public hearing is required by or allowed under

1-12     Chapter 26 or 27 or required by or allowed under Chapter 361 or

1-13     382, Health and Safety Code.  Subchapters C-H, Chapter 2001,

1-14     Government Code, do not apply to a proceeding to which this

1-15     subchapter applies.

1-16           (b)  The commission by rule shall provide for additional

1-17     notice, opportunity for public comment, and opportunity for hearing

1-18     to the extent necessary to satisfy a requirement for United States

1-19     Environmental Protection Agency authorization of a state permit

1-20     program.

1-21           (c)  The commission shall provide for permits-by-rule under

1-22     the chapters listed in Subsection (a) to the greatest extent

1-23     practicable and consistent with the requirements for United States

1-24     Environmental Protection Agency authorization of a state permit

 2-1     program.

 2-2           (d)  The commission by rule may identify categories of

 2-3     applications related to permits for which notice or opportunity for

 2-4     public hearing is not required.  The commission may exempt from

 2-5     notice and public hearing requirements an application to:

 2-6                 (1)  maintain or improve the permitted quality or

 2-7     method of disposal of waste, control of emissions of air

 2-8     contaminants, or injection of fluid if there is not:

 2-9                       (A)  a significant increase in the quantity of

2-10     waste, air contaminants, or fluid to be discharged, emitted, or

2-11     injected; or

2-12                       (B)  a material change in the place of discharge,

2-13     injection, emission, control, treatment, storage, or disposal;

2-14                 (2)  amend a permit in a manner that will not:

2-15                       (A)  cause a potential deterioration of water

2-16     quality in the state;

2-17                       (B)  relax a standard or criterion in a manner

2-18     that raises a potential for deterioration of water quality in the

2-19     state;

2-20                       (C)  result in a significant net increase in

2-21     permitted allowable emissions; or

2-22                       (D)  allow a significant emission of air

2-23     contaminants not previously emitted under the permit;

2-24                 (3)  increase emissions of air contaminants that are

2-25     incidental to the installation of an emission control device or

2-26     implementation of a control technique; or

2-27                 (4)  change a facility in a manner within the scope and

 3-1     limitations of a flexible permit.

 3-2           (e)  For an application described by Subsection (d), the

 3-3     commission by rule may provide for the executive director to take

 3-4     action on the application.

 3-5           Sec. 5.372.  ISSUANCE OF PERMIT, DRAFT PERMIT, OR NOTICE OF

 3-6     INTENT TO DENY.  (a)  After an application related to a permit is

 3-7     administratively and technically complete, the executive director

 3-8     shall prepare and issue:

 3-9                 (1)  a notice of intent to deny; or

3-10                 (2)  a draft permit.

3-11           (b)  The executive director shall include with a notice of

3-12     intent to deny or draft permit a record of proposed decision

3-13     prepared in accordance with Section 5.373.

3-14           (c)  A notice of intent to deny must state the executive

3-15     director's reasons for denial.

3-16           (d)  A draft permit must contain all appropriate conditions,

3-17     compliance schedules, monitoring requirements, and technical

3-18     standards consistent with applicable commission rules.

3-19           (e)  The commission shall send a copy of the record of

3-20     proposed decision to:

3-21                 (1)  the applicant;

3-22                 (2)  a state or federal agency, as required or as

3-23     appropriate; and

3-24                 (3)  any person on that person's request.

3-25           (f)  Unless precluded by a requirement for United States

3-26     Environmental Protection Agency authorization of a state permit

3-27     program, an applicant may give public notice of the application

 4-1     before the executive director issues a draft permit or notification

 4-2     of intent to deny.

 4-3           (g)  If the executive director determines that there is not a

 4-4     significant degree of public interest in an application or the

 4-5     commission does not receive a request for a public hearing on the

 4-6     application, the executive director may take final action on the

 4-7     application notwithstanding this section and Sections 5.373-5.377,

 4-8     and the permit is effective immediately.

 4-9           Sec. 5.373.  RECORD OF PROPOSED DECISION FOR DRAFT PERMIT.

4-10     (a)  A record of proposed decision prepared for a draft permit

4-11     must:

4-12                 (1)  be based on the administrative record; and

4-13                 (2)  briefly state the principal facts and significant

4-14     factual, legal, methodological, and policy issues considered in

4-15     preparing the draft permit.

4-16           (b)  The record of proposed decision, as applicable, must:

4-17                 (1)  briefly describe the type of facility or activity

4-18     that is the subject of the draft permit;

4-19                 (2)  state the type and quantity of wastes proposed to

4-20     be or that are being treated, stored, disposed of, injected,

4-21     emitted, or discharged under the permit;

4-22                 (3)  briefly summarize the reasons for the draft permit

4-23     conditions, including references to applicable statutes or rules;

4-24                 (4)  state the reasons a requested variance or

4-25     alternative to a required standard is or is not justified;

4-26                 (5)  describe the procedures for reaching a final

4-27     decision on the draft permit, including:

 5-1                       (A)  the dates the comment period begins and

 5-2     ends;

 5-3                       (B)  the address where comments will be received;

 5-4     and

 5-5                       (C)  a description of:

 5-6                             (i)  procedures for requesting a hearing;

 5-7                             (ii)  the nature of the hearing; and

 5-8                             (iii)  any other procedures by which the

 5-9     public may participate in the final decision process; and

5-10                 (6)  include the name and telephone number of a person

5-11     to contact for additional information.

5-12           (c)  The commission shall make the record of proposed

5-13     decision available to the public when the public notice is

5-14     published.

5-15           Sec. 5.374.  NOTICE OF INITIAL DETERMINATION; COMMENTS AND

5-16     REQUESTS FOR HEARING.   (a)  The commission by rule shall provide

5-17     for public notice for each draft permit or notice of intent to deny

5-18     that is prepared.

5-19           (b)  The executive director shall provide for a period of at

5-20     least 30 days for public review, comments, and requests for public

5-21     hearing.  The period for public review and comments must be

5-22     extended until the close of the public hearing, if a public hearing

5-23     is held.  The commission or the executive director at any time

5-24     before a final decision is issued may extend or reopen the comment

5-25     period to allow the receipt of information that may help the

5-26     commission to resolve an issue raised in the application.

5-27           (c)  Each person, including an applicant, who believes that a

 6-1     condition of a draft permit is inappropriate, or that the executive

 6-2     director's tentative decision to deny an application, terminate a

 6-3     permit, or prepare a draft permit is inappropriate, must raise all

 6-4     reasonably ascertainable issues and present all reasonably

 6-5     available arguments supporting the person's position on or before

 6-6     the date the public comment period closes.  The executive director

 6-7     shall grant additional time for comment to the extent that a person

 6-8     who requests additional time to comment demonstrates a reasonable

 6-9     need for that time.

6-10           (d)  Notice required under this section is in addition to the

6-11     requirements of Section 26.028 and of Sections 361.081 and 361.082,

6-12     Health and Safety Code.  Notice required under this section may be

6-13     combined with notice required by another section of this code or of

6-14     the Health and Safety Code to satisfy the requirements of each

6-15     section.

6-16           (e)  The commission by rule shall provide for additional

6-17     notice and opportunity for public comment to the extent necessary

6-18     to satisfy a requirement for United States Environmental Protection

6-19     Agency authorization of a state permit program.

6-20           (f)  If the commission receives a timely written notice of

6-21     opposition to a draft permit issued by the executive director and a

6-22     request for a public hearing on the draft permit, the executive

6-23     director shall respond to the request and attempt to resolve the

6-24     issues that create the opposition.  The executive director may

6-25     refer parties to alternative dispute resolution to resolve the

6-26     issues that create the opposition.  The opponent may withdraw the

6-27     request for a public hearing following the executive director's

 7-1     response.

 7-2           Sec. 5.375.  PUBLIC HEARINGS.  (a)  A ruling on a permit

 7-3     issuance or denial may not be made without an opportunity for a

 7-4     public hearing.

 7-5           (b)  At a public hearing under this subchapter, any person

 7-6     may present an oral or written statement or information concerning

 7-7     the draft permit or notice of intent to deny.  The person or panel

 7-8     conducting a hearing may:

 7-9                 (1)  set reasonable limits on the time allowed for oral

7-10     comments; or

7-11                 (2)  require statements to be presented in writing or

7-12     under oath.

7-13           (c)  The executive director shall hold the public hearing if

7-14     the executive director determines:

7-15                 (1)  that there is a significant degree of public

7-16     interest in the draft permit or notice of intent to deny, after

7-17     examining requests for a public hearing; or

7-18                 (2)  that a public hearing should be held to clarify

7-19     one or more issues in the permit decision, regardless of whether

7-20     the commission receives a timely request for a public hearing.

7-21           (d)  When a draft permit or notice of intent to deny for a

7-22     hazardous waste management permit is at issue, the executive

7-23     director shall hold a public hearing in any case in which the

7-24     commission receives a notice of opposition to the permit decision

7-25     and a request for a public hearing on or before the end of the

7-26     period provided under Section 5.374 for public hearing requests.

7-27     Whenever it is possible to do so, the executive director shall hold

 8-1     the public hearing under this subsection at a location convenient

 8-2     to the population center nearest the place proposed for the

 8-3     activity to be permitted.

 8-4           (e)  The executive director may designate a presiding officer

 8-5     or hearing panel to conduct the hearing in an orderly manner and to

 8-6     receive comments at the hearing.  A hearing panel may include

 8-7     technical experts on the executive director's staff.

 8-8           (f)  The presiding officer or hearing panel shall conduct the

 8-9     hearing in a manner that helps develop the administrative record.

8-10     The presiding officer or panel may ask questions of persons who

8-11     testify to develop the record fully or to clarify a factual or

8-12     regulatory issue.

8-13           (g)  Chapter 2001, Government Code, does not apply to a

8-14     public hearing held under this section.  A hearing held under this

8-15     section shall be conducted so that all relevant information, views,

8-16     arguments, and other data are sufficiently and fairly received

8-17     without undue repetition.

8-18           (h)  A hearing held under this section shall be recorded.  A

8-19     hearing shall be transcribed on request.  The person who requests a

8-20     hearing transcription shall bear the cost of the transcription.

8-21           (i)  The commission shall provide the record and, if

8-22     prepared, the transcript of a hearing for review by any person at

8-23     the commission's main office.

8-24           (j)  A person who requests a copy of the record or of a

8-25     transcript  shall bear the cost of the copy.

8-26           Sec. 5.376.  FINAL DECISION OF EXECUTIVE DIRECTOR.  (a)  For

8-27     a decision on an application processed under Sections 5.373-5.375,

 9-1     the executive director shall consider all comments received during

 9-2     the public comment period and during any public hearing in

 9-3     determining:

 9-4                 (1)  whether to issue the permit; and

 9-5                 (2)  conditions to be placed on the permit if a permit

 9-6     is issued.

 9-7           (b)  In ruling on a permit application, the executive

 9-8     director may:

 9-9                 (1)  deny the permit in whole or in part or provide

9-10     reasonable conditions to a permit if:

9-11                       (A)  the permit applied for does not meet

9-12     applicable requirements; or

9-13                       (B)  the applicant refuses to agree to a permit

9-14     condition the executive director determines is necessary; and

9-15                 (2)  consider any adjudicated decision within five

9-16     years before the date on which the application is filed that

9-17     addressed the applicant's noncompliance with the terms of any

9-18     permit or order issued by the commission.

9-19           (c)  The executive director may not deny an application

9-20     because of an adjudicated decision considered under Subsection

9-21     (b)(2) unless the executive director determines that:

9-22                 (1)  the applicant's noncompliance resulted in harm to

9-23     public health or the environment; and

9-24                 (2)  the applicant has not made a substantial attempt

9-25     to correct the noncompliance.

9-26           (d)  When the executive director issues a final decision on

9-27     an application, the executive director shall issue a response to

 10-1    comments the commission received on the application.  The response

 10-2    must:

 10-3                (1)  identify any provision of the draft permit that

 10-4    has been changed for the final permit and state the reasons for the

 10-5    change; and

 10-6                (2)  briefly describe and respond to all significant

 10-7    comments the commission receives on the draft permit or permit

 10-8    application.

 10-9          (e)  The response must be available to the public.

10-10          (f)  The executive director shall mail notice of the final

10-11    decision on the application to the applicant and to each person who

10-12    commented during the public comment period or participated in the

10-13    public hearing.  The notice must:

10-14                (1)  include the response issued under Subsection (d);

10-15                (2)  explain the petition process; and

10-16                (3)  identify the location and availability of the

10-17    administrative record.

10-18          (g)  A final decision under this section on a permit

10-19    application becomes effective 30 days after the date notice of the

10-20    decision is mailed, unless a petition for review is filed in

10-21    accordance with Section 5.377, or at a later time specified by the

10-22    executive director in the decision.

10-23          Sec. 5.377.  PETITION FOR COMMISSION REVIEW.  (a)  The

10-24    commission shall review the executive director's decision on a

10-25    permit application as provided by this section.

10-26          (b)  A person who submitted a comment or participated in a

10-27    public hearing on the tentative decision of the executive director,

 11-1    or an applicant in a case in which the executive director takes

 11-2    action under Section 5.372(g), may file a petition for review with

 11-3    the commission.  A person who did not submit a comment or did not

 11-4    participate in the public hearing may file a petition for review

 11-5    only to the extent of the changes made to the tentative decision

 11-6    that are reflected in the final permit decision.  A petition for

 11-7    review must be filed on or before the 30th day after the date the

 11-8    executive director's notice of final decision is mailed.

 11-9          (c)  The act of filing a petition under this section

11-10    automatically stays the effect of a permit issued by the executive

11-11    director until the commission determines whether to grant a

11-12    petition for review.  To the extent a condition of a new permit is

11-13    stayed under this section, a person who holds an existing permit

11-14    must comply with any condition of the existing permit that

11-15    corresponds to the stayed condition, unless compliance with the

11-16    condition of the existing permit would be technologically

11-17    incompatible with compliance with a condition of the new permit

11-18    that has not been stayed.

11-19          (d)  The petition must:

11-20                (1)  include a statement of the reasons that support

11-21    commission review of the decision;

11-22                (2)  demonstrate that the issue raised by the petition:

11-23                      (A)  was raised during the public comment period

11-24    or public hearing; or

11-25                      (B)  if not raised during the comment period or

11-26    hearing, was not raised for a good cause;

11-27                (3)  identify all provisions of the draft permit or

 12-1    order of denial of the application with which the appellant

 12-2    disagrees; and

 12-3                (4)  show that the decision or a permit condition is

 12-4    based on:

 12-5                      (A)  a finding of fact or a conclusion of law

 12-6    that is clearly in error; or

 12-7                      (B)  an important policy consideration or an

 12-8    exercise of discretion that the commission should review.

 12-9          (e)  The commission shall act on a petition not later than

12-10    the 60th day after the date the notice of final decision is mailed.

12-11    If the commission does not act on or before that date, the petition

12-12    is denied.

12-13          Sec. 5.378.  COMMISSION REVIEW.  (a)  If the commission

12-14    grants the petition for review, the commission shall give notice to

12-15    the petitioner and each person who commented during the public

12-16    comment period or participated in the public hearing.  The notice

12-17    must:

12-18                (1)  provide a briefing schedule for the review;

12-19                (2)  identify provisions of permits stayed under

12-20    Subsection (b); and

12-21                (3)  state that any person who submitted comments on

12-22    the tentative decision of the executive director or participated in

12-23    the public hearing may file an amicus brief.

12-24          (b)  If a petition for review is granted, the effect of the

12-25    contested permit conditions shall be stayed pending final

12-26    commission action.  If the permit involves a new facility,

12-27    injection well, source, or discharger, the applicant shall be

 13-1    without a permit for the proposed new facility, injection well,

 13-2    source, or discharger pending final commission action.  All permit

 13-3    provisions for the existing facility, injection well, source, or

 13-4    discharging person or facility that are not stayed under this

 13-5    subsection remain in effect and enforceable.  To the extent a

 13-6    condition of a new permit is stayed under this section, a person

 13-7    who holds an existing permit must comply with any condition of the

 13-8    existing permit that corresponds to the stayed condition, unless

 13-9    compliance with the existing condition would be technologically

13-10    incompatible with compliance with a condition of the new permit

13-11    that has not been stayed.

13-12          (c)  If the commission modifies or rejects the executive

13-13    director's decision, the commission must issue a written decision

13-14    that includes a statement of the reason and legal basis for the

13-15    decision.

13-16          (d)  The decision must be supported by the administrative

13-17    record.  The commission shall mail the decision to the petitioner

13-18    and each person who commented during the public comment period or

13-19    who participated in the public hearing.

13-20          (e)  The commission may remand any matter to the executive

13-21    director if the commission considers the remand necessary to

13-22    resolve a difficult issue or conflicting factual claims.  The

13-23    commission may limit the scope of the remand to particular issues.

13-24          (f)  On the initiative of the commission, the commission may

13-25    review any condition of a draft permit prepared by the executive

13-26    director.

13-27          Sec. 5.379.  MOTION TO RECONSIDER.  A motion to reconsider a

 14-1    final order of the commission:

 14-2                (1)  must be filed before the 11th day after the date

 14-3    of service of the final order;

 14-4                (2)  must state the matters claimed to be erroneously

 14-5    decided and the nature of the alleged errors; and

 14-6                (3)  does not stay the effective date of the final

 14-7    order unless the commission specifically orders the stay.

 14-8          Sec. 5.380.  JUDICIAL REVIEW OF COMMISSION PERMIT DECISIONS.

 14-9    (a)  A person aggrieved by the executive director's final decision

14-10    on a permit application or the commission's action on the petition

14-11    that modifies or rejects the executive director's decision may

14-12    petition for judicial review.  The petition must be filed not later

14-13    than the 30th day after the date:

14-14                (1)  the commission mails the decision on the petition

14-15    for commission review under Section 5.378(d); or

14-16                (2)  the petition for commission review is denied.

14-17          (b)  Failure to timely petition for commission review of the

14-18    executive director's decision is a bar to judicial review of the

14-19    decision.

14-20          (c)  In reviewing a decision of the commission, a court may

14-21    not substitute the court's judgment for the commission's judgment

14-22    on the weight of information in the administrative record related

14-23    to a question committed to the commission's discretion.  The court:

14-24                (1)  may affirm the commission's decision in whole or

14-25    in part; and

14-26                (2)  shall reverse or remand the case for further

14-27    proceedings if a substantial right of an appellant has been

 15-1    prejudiced because of a finding, inference, conclusion, or decision

 15-2    that:

 15-3                      (A)  violates the Texas Constitution, the federal

 15-4    constitution, or a statute;

 15-5                      (B)  exceeds the commission's authority;

 15-6                      (C)  is made through an unlawful procedure;

 15-7                      (D)  is affected by an error of law;

 15-8                      (E)  is arbitrary or capricious; or

 15-9                      (F)  is characterized by abuse of discretion or a

15-10    clearly unwarranted exercise of discretion.

15-11          (d)  The filing of a petition for review does not stay an

15-12    action required by the commission's decision.

15-13          (e)  Except as provided by Subsection (f), the record for

15-14    review is limited to all written and oral substantive public

15-15    comments, the transcript of the hearing, all related

15-16    correspondence, all responses to comments, and all other

15-17    information on which the commission relied in deciding on the

15-18    executive director's decision.

15-19          (f)  A party may apply to the court to present additional

15-20    information.  If the court finds that the additional information is

15-21    material and that failure to present the additional information in

15-22    the proceeding was for a good reason, the court may order the

15-23    additional information to be taken before the commission on

15-24    conditions the court determines.  The commission may change the

15-25    commission's findings or decision after consideration of the

15-26    additional information.  The commission shall file the additional

15-27    information with the reviewing court together with any change in

 16-1    the commission's findings or decisions.

 16-2          (g)  A court shall conduct the review sitting without a jury.

 16-3    The court may not go outside the administrative record, except that

 16-4    the court may receive evidence of any procedural irregularity

 16-5    alleged to have occurred before the commission that is not

 16-6    reflected in the record.

 16-7          SECTION 2.  Sections 361.0833(a), (c), (d), (f), and (g),

 16-8    Health and Safety Code, are amended to read as follows:

 16-9          (a)  After considering the factors in Subsection (e), the

16-10    commission may order the applicant for a permit for a new hazardous

16-11    waste management facility to pay reasonable costs an interested

16-12    [incurred by a] person incurred [affected] in presenting to the

16-13    commission information described by [set out in] Subsection (b)

16-14    pertinent to [to the commission on] the question of the issuance of

16-15    the permit.

16-16          (c)  The commission may order the applicant for a permit for

16-17    a new hazardous waste management facility to pay reasonable costs

16-18    an interested [incurred by a] person incurred in presenting to the

16-19    commission at a hearing [affected who presented] information [to

16-20    the commission at a hearing] showing that the applicant:

16-21                (1)  knowingly made false or misleading statements in

16-22    the application;

16-23                (2)  knowingly made false or misleading statements

16-24    during the hearing; or

16-25                (3)  failed to present information that the applicant

16-26    had in its possession that would have materially affected the

16-27    issues of fact and law on which the decision of the commission was

 17-1    based.

 17-2          (d)  The total costs awarded under Subsection (a) to all

 17-3    interested persons [affected under Subsection (a)] may not exceed

 17-4    $100,000 for a new commercial hazardous waste management facility

 17-5    or $20,000 for a new noncommercial hazardous waste management

 17-6    facility.  The total costs awarded under Subsection (c) to all

 17-7    interested persons [affected under Subsection (c)] may not exceed

 17-8    $150,000 for a new commercial hazardous waste management facility

 17-9    or $30,000 for a new noncommercial hazardous waste management

17-10    facility.

17-11          (f)  If the applicant fails or refuses to pay the amount of

17-12    costs ordered not later than the 30th day after the date of entry

17-13    of the final order granting payment of costs, the commission shall

17-14    order the applicant's bond or other financial assurance forfeited

17-15    in the amount of the costs ordered reimbursed under Subsection (a)

17-16    or (c) up to and including the full amount of the bond or other

17-17    financial assurance.  The commission shall forward the forfeited

17-18    amount to the interested person [affected].

17-19          (g)  If a [no] request [is made] for an award of costs under

17-20    this section is not made or if the commission determines that each

17-21    interested [a] person who requests an award for costs is not

17-22    [affected is determined by the commission not to be] entitled to an

17-23    award of costs, the commission shall release the bond or other

17-24    financial assurance of the applicant subject to an appeal of the

17-25    denial of costs under this section.  The commission shall also

17-26    release the bond or other financial assurance on presentation of

17-27    proof that the costs awarded have been paid.

 18-1          SECTION 3.   Subchapter I, Chapter 2001, Government Code, is

 18-2    amended by adding Section 2001.227 to read as follows:

 18-3          Sec. 2001.227.  CERTAIN ENVIRONMENTAL PERMITS.  Subchapters

 18-4    C-H do not apply to a permit application required to be filed with

 18-5    the Texas Natural Resource Conservation Commission for an

 18-6    authorization under Chapter 26 or 27, Water Code, or Chapter 361 or

 18-7    382, Health and Safety Code, if the application is subject to

 18-8    Subchapter J, Chapter 5, Water Code.

 18-9          SECTION 4.  On the effective date of this Act, Subchapters

18-10    C-H, Chapter 2001, Government Code, or any provision in those

18-11    subchapters, do not apply to the subject matter of a reference to

18-12    that law that occurs in Chapter 26 or 27, Water Code, or Chapter

18-13    361 or 382, Health and Safety Code.  Subchapter J, Chapter 5, Water

18-14    Code, applies to the subject matter in place of the referenced law.

18-15          SECTION 5.  The importance of this legislation and the

18-16    crowded condition of the calendars in both houses create an

18-17    emergency and an imperative public necessity that the

18-18    constitutional rule requiring bills to be read on three several

18-19    days in each house be suspended, and this rule is hereby suspended,

18-20    and that this Act take effect and be in force from and after its

18-21    passage, and it is so enacted.