1-1           By:  Brown                                       S.B. No. 633

 1-2           (In the Senate - Filed February 18, 1997; February 20, 1997,

 1-3     read first time and referred to Committee on Natural Resources;

 1-4     February 27, 1997, reported favorably, as amended, by the following

 1-5     vote:  Yeas 7, Nays 2; February 27, 1997, sent to printer.)

 1-6     COMMITTEE AMENDMENT NO. 1                                By:  Brown

 1-7     Amend S.B. No. 633 in SECTION 1 of the bill, in proposed Section

 1-8     2001.0225, Government Code, by striking the sentence beginning on

 1-9     page 3, line 19 as follows:  "The agency shall make every effort to

1-10     adopt rules that provide the maximum flexibility to the regulated

1-11     community in complying with the rule."

1-12                            A BILL TO BE ENTITLED

1-13                                   AN ACT

1-14     relating to assessments performed before agency adoption of certain

1-15     environmental rules.

1-16           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-17           SECTION 1.  Chapter 2001, Government Code, is amended by

1-18     adding Section 2001.0225 to read as follows:

1-19           Sec. 2001.0225.  REGULATORY ANALYSIS OF MAJOR ENVIRONMENTAL

1-20     RULES.  (a)  This section applies only to a major environmental

1-21     rule adopted by a state agency, the result of which is to:

1-22                 (1)  exceed a standard set by federal law, unless the

1-23     rule is specifically required by state law;

1-24                 (2)  exceed an express requirement of state law, unless

1-25     the rule is specifically required by federal law;

1-26                 (3)  exceed a requirement of a delegation agreement or

1-27     contract between the state and an agency or representative of the

1-28     federal government to implement a state and federal program; or

1-29                 (4)  adopt a rule solely under the general powers of

1-30     the agency instead of under a specific state law.

1-31           (b)  Before adopting a major environmental rule subject to

1-32     this section, a state agency shall conduct a regulatory analysis

1-33     that:

1-34                 (1)  identifies the problem the rule is intended to

1-35     address;

1-36                 (2)  determines whether a new rule is necessary to

1-37     address the problem; and

1-38                 (3)  considers the benefits and costs of the proposed

1-39     rule in relationship to state agencies, local governments, the

1-40     public, the regulated community, and the environment.

1-41           (c)  When giving notice of a major environmental rule subject

1-42     to this section, a state agency shall incorporate into the fiscal

1-43     note required by Section 2001.024 a draft impact analysis

1-44     describing the anticipated effects of the proposed rule.  The draft

1-45     impact analysis, at a minimum, must:

1-46                 (1)  identify the benefits that the agency anticipates

1-47     from adoption and implementation of the rule, including reduced

1-48     risks to human health, safety, or the environment;

1-49                 (2)  identify the costs that the agency anticipates

1-50     state agencies, local governments, the public, and the regulated

1-51     community will experience after implementation of the rule;

1-52                 (3)  describe the benefits and costs anticipated from

1-53     implementation of the rule in as quantitative a manner as feasible,

1-54     but including a qualitative description when a quantitative

1-55     description is not feasible or adequately descriptive;

1-56                 (4)  describe reasonable alternative methods for

1-57     achieving the purpose of the rule that were considered by the

1-58     agency and provide the reasons for rejecting those alternatives in

1-59     favor of the proposed rule;

1-60                 (5)  identify the data and methodology used in

1-61     performing the analysis required by this section;

1-62                 (6)  provide an explanation of whether the proposed

1-63     rule specifies a single method of compliance, and, if so, explain

 2-1     why the agency determines that a specified method of compliance is

 2-2     preferable to adopting a flexible regulatory approach, such as a

 2-3     performance-oriented, voluntary, or market-based approach;

 2-4                 (7)  state that there is an opportunity for public

 2-5     comment on the draft impact analysis under Section 2001.029 and

 2-6     that all comments will be addressed in the publication of the final

 2-7     regulatory analysis; and

 2-8                 (8)  provide information in such a manner that a

 2-9     reasonable person reading the analysis would be able to identify

2-10     the impacts of the proposed rule.

2-11           (d)  After considering public comments submitted under

2-12     Section 2001.029 and determining that a proposed rule should be

2-13     adopted, the agency shall prepare a final regulatory analysis that

2-14     complies with Section 2001.033.  Additionally, the agency shall

2-15     find that, compared to the alternative proposals considered and

2-16     rejected, the rule will result in the best combination of

2-17     effectiveness in obtaining the desired results and of economic

2-18     costs not materially greater than the costs of any alternative

2-19     regulatory method considered.  The agency shall make every effort

2-20     to adopt rules that provide the maximum flexibility to the

2-21     regulated community in complying with the rule.

2-22           (e)  In preparing the draft impact analysis before

2-23     publication for comment and the final regulatory analysis for the

2-24     agency order adopting the rule, the state agency shall consider

2-25     that the purpose of this requirement is to identify for the public

2-26     and the regulated community the information that was considered by

2-27     the agency, the information that the agency determined to be

2-28     relevant and reliable, and the assumptions and facts upon which the

2-29     agency made its regulatory decision.  In making its final

2-30     regulatory decision, the agency shall assess:

2-31                 (1)  all information submitted to it, whether

2-32     quantitative or qualitative, consistent with generally accepted

2-33     scientific standards;

2-34                 (2)  actual data where possible; and

2-35                 (3)  assumptions that reflect actual impacts that the

2-36     regulation is likely to impose.

2-37           (f)  A person who submitted public comment in accordance with

2-38     Section 2001.029 may challenge the validity of a major

2-39     environmental rule that is not proposed and adopted in accordance

2-40     with the procedural requirements of this section by filing an

2-41     action for declaratory judgment under Section 2001.038 not later

2-42     than the 30th day after the effective date of the rule.  If a court

2-43     determines that a major environmental rule was not proposed and

2-44     adopted in accordance with the procedural requirements of this

2-45     section, the rule is invalid.

2-46           (g)  In this section:

2-47                 (1)  "Benefit" means a reasonably identifiable,

2-48     significant, direct or indirect, favorable effect, including a

2-49     quantifiable or nonquantifiable environmental, health, or economic

2-50     effect, that is expected to result from implementation of a rule.

2-51                 (2)  "Cost" means a reasonably identifiable,

2-52     significant, direct or indirect, adverse effect, including a

2-53     quantifiable or nonquantifiable environmental, health, or economic

2-54     effect, that is expected to result from implementation of a rule.

2-55                 (3)  "Major environmental rule" means a rule the

2-56     specific intent of which is to protect the environment or reduce

2-57     risks to human health from environmental exposure and that may

2-58     adversely affect in a material way the economy, a sector of the

2-59     economy, productivity, competition, jobs, the environment, or the

2-60     public health and safety of the state.

2-61           SECTION 2.  This Act takes effect September 1, 1997, and

2-62     applies only to a major environmental rule, as defined by Section

2-63     2001.0225, Government Code, as added by this Act, that is proposed

2-64     by a state agency on or after that date.

2-65           SECTION 3.  The importance of this legislation and the

2-66     crowded condition of the calendars in both houses create an

2-67     emergency and an imperative public necessity that the

2-68     constitutional rule requiring bills to be read on three several

2-69     days in each house be suspended, and this rule is hereby suspended.