AN ACT 1-1 relating to assessments performed before agency adoption of certain 1-2 environmental rules. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter B, Chapter 2001, Government Code, is 1-5 amended by adding Section 2001.0225 to read as follows: 1-6 Sec. 2001.0225. REGULATORY ANALYSIS OF MAJOR ENVIRONMENTAL 1-7 RULES. (a) This section applies only to a major environmental 1-8 rule adopted by a state agency, the result of which is to: 1-9 (1) exceed a standard set by federal law, unless the 1-10 rule is specifically required by state law; 1-11 (2) exceed an express requirement of state law, unless 1-12 the rule is specifically required by federal law; 1-13 (3) exceed a requirement of a delegation agreement or 1-14 contract between the state and an agency or representative of the 1-15 federal government to implement a state and federal program; or 1-16 (4) adopt a rule solely under the general powers of 1-17 the agency instead of under a specific state law. 1-18 (b) Before adopting a major environmental rule subject to 1-19 this section, a state agency shall conduct a regulatory analysis 1-20 that: 1-21 (1) identifies the problem the rule is intended to 1-22 address; 1-23 (2) determines whether a new rule is necessary to 2-1 address the problem; and 2-2 (3) considers the benefits and costs of the proposed 2-3 rule in relationship to state agencies, local governments, the 2-4 public, the regulated community, and the environment. 2-5 (c) When giving notice of a major environmental rule subject 2-6 to this section, a state agency shall incorporate into the fiscal 2-7 note required by Section 2001.024 a draft impact analysis 2-8 describing the anticipated effects of the proposed rule. The draft 2-9 impact analysis, at a minimum, must: 2-10 (1) identify the benefits that the agency anticipates 2-11 from adoption and implementation of the rule, including reduced 2-12 risks to human health, safety, or the environment; 2-13 (2) identify the costs that the agency anticipates 2-14 state agencies, local governments, the public, and the regulated 2-15 community will experience after implementation of the rule; 2-16 (3) describe the benefits and costs anticipated from 2-17 implementation of the rule in as quantitative a manner as feasible, 2-18 but including a qualitative description when a quantitative 2-19 description is not feasible or adequately descriptive; 2-20 (4) describe reasonable alternative methods for 2-21 achieving the purpose of the rule that were considered by the 2-22 agency and provide the reasons for rejecting those alternatives in 2-23 favor of the proposed rule; 2-24 (5) identify the data and methodology used in 2-25 performing the analysis required by this section; 3-1 (6) provide an explanation of whether the proposed 3-2 rule specifies a single method of compliance, and, if so, explain 3-3 why the agency determines that a specified method of compliance is 3-4 preferable to adopting a flexible regulatory approach, such as a 3-5 performance-oriented, voluntary, or market-based approach; 3-6 (7) state that there is an opportunity for public 3-7 comment on the draft impact analysis under Section 2001.029 and 3-8 that all comments will be addressed in the publication of the final 3-9 regulatory analysis; and 3-10 (8) provide information in such a manner that a 3-11 reasonable person reading the analysis would be able to identify 3-12 the impacts of the proposed rule. 3-13 (d) After considering public comments submitted under 3-14 Section 2001.029 and determining that a proposed rule should be 3-15 adopted, the agency shall prepare a final regulatory analysis that 3-16 complies with Section 2001.033. Additionally, the agency shall 3-17 find that, compared to the alternative proposals considered and 3-18 rejected, the rule will result in the best combination of 3-19 effectiveness in obtaining the desired results and of economic 3-20 costs not materially greater than the costs of any alternative 3-21 regulatory method considered. 3-22 (e) In preparing the draft impact analysis before 3-23 publication for comment and the final regulatory analysis for the 3-24 agency order adopting the rule, the state agency shall consider 3-25 that the purpose of this requirement is to identify for the public 4-1 and the regulated community the information that was considered by 4-2 the agency, the information that the agency determined to be 4-3 relevant and reliable, and the assumptions and facts on which the 4-4 agency made its regulatory decision. In making its final 4-5 regulatory decision, the agency shall assess: 4-6 (1) all information submitted to it, whether 4-7 quantitative or qualitative, consistent with generally accepted 4-8 scientific standards; 4-9 (2) actual data where possible; and 4-10 (3) assumptions that reflect actual impacts that the 4-11 regulation is likely to impose. 4-12 (f) A person who submitted public comment in accordance with 4-13 Section 2001.029 may challenge the validity of a major 4-14 environmental rule that is not proposed and adopted in accordance 4-15 with the procedural requirements of this section by filing an 4-16 action for declaratory judgment under Section 2001.038 not later 4-17 than the 30th day after the effective date of the rule. If a court 4-18 determines that a major environmental rule was not proposed and 4-19 adopted in accordance with the procedural requirements of this 4-20 section, the rule is invalid. 4-21 (g) In this section: 4-22 (1) "Benefit" means a reasonably identifiable, 4-23 significant, direct or indirect, favorable effect, including a 4-24 quantifiable or nonquantifiable environmental, health, or economic 4-25 effect, that is expected to result from implementation of a rule. 5-1 (2) "Cost" means a reasonably identifiable, 5-2 significant, direct or indirect, adverse effect, including a 5-3 quantifiable or nonquantifiable environmental, health, or economic 5-4 effect, that is expected to result from implementation of a rule. 5-5 (3) "Major environmental rule" means a rule the 5-6 specific intent of which is to protect the environment or reduce 5-7 risks to human health from environmental exposure and that may 5-8 adversely affect in a material way the economy, a sector of the 5-9 economy, productivity, competition, jobs, the environment, or the 5-10 public health and safety of the state or a sector of the state. 5-11 (h) The requirements of this section do not apply to state 5-12 agency rules that are proposed or adopted on an emergency basis to 5-13 protect the environment or to reduce risks to human health from 5-14 environmental exposure. 5-15 SECTION 2. This Act takes effect September 1, 1997, and 5-16 applies only to a major environmental rule, as defined by Section 5-17 2001.0225, Government Code, as added by this Act, that is proposed 5-18 by a state agency on or after that date. 5-19 SECTION 3. The importance of this legislation and the 5-20 crowded condition of the calendars in both houses create an 5-21 emergency and an imperative public necessity that the 5-22 constitutional rule requiring bills to be read on three several 5-23 days in each house be suspended, and this rule is hereby suspended. _______________________________ _______________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 633 passed the Senate on March 17, 1997, by the following vote: Yeas 25, Nays 6; and that the Senate concurred in House amendment on May 28, 1997, by a viva-voce vote. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 633 passed the House, with amendment, on May 26, 1997, by a non-record vote. _______________________________ Chief Clerk of the House Approved: _______________________________ Date _______________________________ Governor