By:  Duncan                                                       S.B. No. 344
	(In the Senate - Filed February 3, 2005; February 7, 2005, 
read first time and referred to Committee on Natural Resources; 
May 3, 2005, reported adversely, with favorable Committee 
Substitute by the following vote:  Yeas 8, Nays 0; May 3, 2005, sent 
to printer.)


COMMITTEE SUBSTITUTE FOR S.B. No. 344                                    By:  Armbrister

A BILL TO BE ENTITLED
AN ACT
relating to the notice, hearing, rulemaking, and permitting procedures for groundwater conservation districts. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 36.101, Water Code, is amended by amending Subsection (b) and adding Subsections (d) through (l) to read as follows: (b) Except as provided by Section 36.1011, after [After] notice and hearing, the board shall adopt and enforce rules to implement this chapter, including rules governing procedure before the board. [Notice in this section shall include publication of the agenda of the hearing in one or more newspapers of general circulation in the county or counties in which the district is located.] (d) Not later than the 20th day before the date of a rulemaking hearing, the general manager or board shall: (1) post notice in a place readily accessible to the public at the district office; (2) provide notice to the county clerk of each county in the district; (3) publish notice in one or more newspapers of general circulation in the county or counties in which the district is located; (4) provide notice by mail, facsimile, or electronic mail to any person who has requested notice under Subsection (i); and (5) make available a copy of all proposed rules at a place accessible to the public during normal business hours and, if the district has a website, post an electronic copy on a generally accessible Internet site. (e) The notice provided under Subsection (d) must include: (1) the time, date, and location of the rulemaking hearing; (2) a brief explanation of the subject of the rulemaking hearing; and (3) a location or Internet site at which a copy of the proposed rules may be reviewed or copied. (f) The presiding officer shall conduct a rulemaking hearing in the manner the presiding officer determines to be most appropriate to obtain information and comments relating to the proposed rule as conveniently and expeditiously as possible. Comments may be submitted orally at the hearing or in writing. The presiding officer may hold the record open for a specified period after the conclusion of the hearing to receive additional written comments. (g) A district may require each person who participates in a rulemaking hearing to submit a hearing registration form stating: (1) the person's name; (2) the person's address; and (3) whom the person represents, if the person is not at the hearing in the person's individual capacity. (h) The presiding officer shall prepare and keep a record of each rulemaking hearing in the form of an audio or video recording or a court reporter transcription. (i) A person may submit to the district a written request for notice of a rulemaking hearing. A request is effective for the remainder of the calendar year in which the request is received by the district. To receive notice of a rulemaking hearing in a later year, a person must submit a new request. An affidavit of an officer or employee of the district establishing attempted service by first class mail, facsimile, or e-mail to the person in accordance with the information provided by the person is proof that notice was provided by the district. (j) A district may use an informal conference or consultation to obtain the opinions and advice of interested persons about contemplated rules and may appoint advisory committees of experts, interested persons, or public representatives to advise the district about contemplated rules. (k) Failure to provide notice under Subsection (d)(4) does not invalidate an action taken by the district at a rulemaking hearing. (l) Subsections (b)-(k) do not apply to the Edwards Aquifer Authority. SECTION 2. Subchapter D, Chapter 36, Water Code, is amended by adding Section 36.1011 to read as follows: Sec. 36.1011. EMERGENCY RULES. (a) A board may adopt an emergency rule without prior notice or hearing, or with an abbreviated notice and hearing, if the board: (1) finds that a substantial likelihood of imminent peril to the public health, safety, or welfare, or a requirement of state or federal law, requires adoption of a rule on less than 20 days' notice; and (2) prepares a written statement of the reasons for its finding under Subdivision (1). (b) Except as provided by Subsection (c), a rule adopted under this section may not be effective for longer than 90 days. (c) If notice of a hearing on the final rule is given not later than the 90th day after the date the rule is adopted, the rule is effective for an additional 90 days. (d) A rule adopted under this section must be adopted at a meeting held as provided by Chapter 551, Government Code. (e) This section does not apply to the Edwards Aquifer Authority. SECTION 3. Sections 36.113 and 36.114, Water Code, are amended to read as follows: Sec. 36.113. PERMITS FOR WELLS; PERMIT AMENDMENTS. (a) Except as provided by Section 36.117, a [A] district shall require a permit [permits] for the drilling, equipping, operating, or completing of wells or for substantially altering the size of wells or well pumps. A district may require that a change in the withdrawal or use of groundwater during the term of a permit issued by the district may not be made unless the district has first approved a permit amendment authorizing the change. (a-1) A district may not require a permit or a permit amendment for maintenance or repair of a well if the maintenance or repair does not increase the production capabilities of the well to more than its authorized or permitted production rate. (b) A district shall require that an application for a permit or a permit amendment be in writing and sworn to. (c) A district may require that the following be included in the permit or permit amendment application: (1) the name and mailing address of the applicant and the owner of the land on which the well will be located; (2) if the applicant is other than the owner of the property, documentation establishing the applicable authority to construct and operate a well for the proposed use; (3) a statement of the nature and purpose of the proposed use and the amount of water to be used for each purpose; (4) a water conservation plan or a declaration that the applicant will comply with the district's management plan; (5) the location of each well and the estimated rate at which water will be withdrawn; (6) a water well closure plan or a declaration that the applicant will comply with well plugging guidelines and report closure to the commission; and (7) a drought contingency plan. (d) Before granting or denying a permit or permit amendment, the district shall consider whether: (1) the application conforms to the requirements prescribed by this chapter and is accompanied by the prescribed fees; (2) the proposed use of water unreasonably affects existing groundwater and surface water resources or existing permit holders; (3) the proposed use of water is dedicated to any beneficial use; (4) the proposed use of water is consistent with the district's certified water management plan; (5) the applicant has agreed to avoid waste and achieve water conservation; and (6) the applicant has agreed that reasonable diligence will be used to protect groundwater quality and that the applicant will follow well plugging guidelines at the time of well closure. (e) The district may impose more restrictive permit conditions on new permit applications and permit amendment applications to increase [increased] use by historic users if the limitations: (1) apply to all subsequent new permit applications and permit amendment applications to increase [increased] use by historic users, regardless of type or location of use; (2) bear a reasonable relationship to the existing district management plan; and (3) are reasonably necessary to protect existing use. (f) Permits and permit amendments may be issued subject to the rules promulgated by the district and subject to terms and provisions with reference to the drilling, equipping, completion, [or] alteration, or operation of, or production of groundwater from, [of] wells or pumps that may be necessary to prevent waste and achieve water conservation, minimize as far as practicable the drawdown of the water table or the reduction of artesian pressure, lessen interference between wells, or control and prevent subsidence. [(g) A district may require that changes in the withdrawal and use of groundwater under a permit not be made without the prior approval of a permit amendment issued by the district.] Sec. 36.114. PERMIT; PERMIT AMENDMENT; APPLICATION AND HEARING. (a) The district by rule shall determine each activity regulated by the district for which a permit or permit amendment is required. (b) For each activity for which the district determines a permit or permit amendment is required under Subsection (a), the district by rule shall determine whether a hearing on the permit or permit amendment application is required. (c) For all applications for which a hearing is not required under Subsection (b), the board shall act on the application at a meeting, as defined by Section 551.001, Government Code, unless the board by rule has delegated to the general manager the authority to act on the application. (d) The district shall promptly consider and act on each administratively complete application for a permit or permit amendment as provided by Subsection (c) or Subchapter M. (e) If, within 60 [30] days after the date an [the] administratively complete application is submitted, the [an] application has not been acted on or set for a hearing on a specific date, the applicant may petition the district court of the county where the land is located for a writ of mandamus to compel the district to act on the application or set a date for a hearing on the application, as appropriate. (f) For applications requiring a hearing, the initial [A] hearing shall be held within 35 days after the setting of the date, and the district shall act on the application within 60 [35] days after the date [of] the final hearing on the application is concluded. (g) The district may by rule set a time when an application will expire if the information requested in the application is not provided to the district. (h) An administratively complete application requires information set forth in accordance with Sections 36.113 and 36.1131. SECTION 4. Subchapter L, Chapter 36, Water Code, is amended by adding Section 36.3705 to read as follows: Sec. 36.3705. DEFINITION. In this subchapter, "applicant" means a newly confirmed district applying for a loan from the loan fund. SECTION 5. Chapter 36, Water Code, is amended by adding Subchapter M to read as follows:
SUBCHAPTER M. PERMIT AND PERMIT AMENDMENT APPLICATIONS;
NOTICE AND HEARING PROCESS
Sec. 36.401. DEFINITION. In this subchapter, "applicant" means a person who is applying for a permit or a permit amendment. Sec. 36.402. APPLICABILITY. Except as provided by Section 36.416, this subchapter applies to the notice and hearing process used by a district for permit and permit amendment applications. Sec. 36.403. SCHEDULING OF HEARING. (a) The general manager or board may schedule a hearing on permit or permit amendment applications received by the district as necessary, as provided by Section 36.114. (b) The general manager or board may schedule more than one application for consideration at a hearing. (c) A hearing must be held at the district office or regular meeting location of the board unless the board provides for hearings to be held at a different location. (d) A hearing may be held in conjunction with a regularly scheduled board meeting. Sec. 36.404. NOTICE. (a) If the general manager or board schedules a hearing on an application for a permit or permit amendment, the general manager or board shall give notice of the hearing as provided by this section. (b) The notice must include: (1) the name of the applicant; (2) the address or approximate location of the well or proposed well; (3) a brief explanation of the proposed permit or permit amendment, including any requested amount of groundwater, the purpose of the proposed use, and any change in use; (4) the time, date, and location of the hearing; and (5) any other information the general manager or board considers relevant and appropriate. (c) Not later than the 10th day before the date of a hearing, the general manager or board shall: (1) post notice in a place readily accessible to the public at the district office; (2) provide notice to the county clerk of each county in the district; and (3) provide notice by: (A) regular mail to the applicant; (B) regular mail, facsimile, or electronic mail to any person who has requested notice under Subsection (d); and (C) regular mail to any other person entitled to receive notice under the rules of the district. (d) A person may request notice from the district of a hearing on a permit or a permit amendment application. The request must be in writing and is effective for the remainder of the calendar year in which the request is received by the district. To receive notice of a hearing in a later year, a person must submit a new request. An affidavit of an officer or employee of the district establishing attempted service by first class mail, facsimile, or e-mail to the person in accordance with the information provided by the person is proof that notice was provided by the district. (e) Failure to provide notice under Subsection (c)(3)(B) does not invalidate an action taken by the district at the hearing. Sec. 36.405. HEARING REGISTRATION. The district may require each person who participates in a hearing to submit a hearing registration form stating: (1) the person's name; (2) the person's address; and (3) whom the person represents, if the person is not there in the person's individual capacity. Sec. 36.406. HEARING PROCEDURES. (a) A hearing must be conducted by: (1) a quorum of the board; or (2) an individual to whom the board has delegated in writing the responsibility to preside as a hearings examiner over the hearing or matters related to the hearing. (b) Except as provided by Subsection (c), the board president or the hearings examiner shall serve as the presiding officer at the hearing. (c) If the hearing is conducted by a quorum of the board and the board president is not present, the directors conducting the hearing may select a director to serve as the presiding officer. (d) The presiding officer may: (1) convene the hearing at the time and place specified in the notice; (2) set any necessary additional hearing dates; (3) designate the parties regarding a contested application; (4) establish the order for presentation of evidence; (5) administer oaths to all persons presenting testimony; (6) examine persons presenting testimony; (7) ensure that information and testimony are introduced as conveniently and expeditiously as possible without prejudicing the rights of any party; (8) prescribe reasonable time limits for testimony and the presentation of evidence; and (9) exercise the procedural rules adopted under Section 36.415. (e) Except as provided by a rule adopted under Section 36.415, a district may allow any person, including the general manager or a district employee, to provide comments at a hearing on an uncontested application. (f) The presiding officer may allow testimony to be submitted in writing and may require that written testimony be sworn to. On the motion of a party to the hearing, the presiding officer may exclude written testimony if the person who submits the testimony is not available for cross-examination by phone, a deposition before the hearing, or other reasonable means. (g) If the board has not acted on the application, the presiding officer may allow a person who testifies at the hearing to supplement the testimony given at the hearing by filing additional written materials with the presiding officer not later than the 10th day after the date of the hearing. A person who files additional written material with the presiding officer under this subsection must also provide the material, not later than the 10th day after the date of the hearing, to any person who provided comments on an uncontested application or any party to a contested hearing. A person who receives additional written material under this subsection may file a response to the material with the presiding officer not later than the 10th day after the date the material was received. (h) The district by rule adopted under Section 36.417 may authorize the presiding officer, at the presiding officer's discretion, to issue an order at any time before board action under Section 36.411 that: (1) refers parties to a contested hearing to an alternative dispute resolution procedure on any matter at issue in the hearing; (2) determines how the costs of the procedure shall be apportioned among the parties; and (3) appoints an impartial third party as provided by Section 2009.053, Government Code, to facilitate that procedure. Sec. 36.407. EVIDENCE. (a) The presiding officer shall admit evidence that is relevant to an issue at the hearing. (b) The presiding officer may exclude evidence that is irrelevant, immaterial, or unduly repetitious. Sec. 36.408. RECORDING. (a) Except as provided by Subsection (b), the presiding officer shall prepare and keep a record of each hearing in the form of an audio or video recording or a court reporter transcription. On the request of a party to a contested hearing, the presiding officer shall have the hearing transcribed by a court reporter. The presiding officer may assess any court reporter transcription costs against the party that requested the transcription or among the parties to the hearing. Except as provided by this subsection, the presiding officer may exclude a party from further participation in a hearing for failure to pay in a timely manner costs assessed against that party under this subsection. The presiding officer may not exclude a party from further participation in a hearing as provided by this subsection if the parties have agreed that the costs assessed against that party will be paid by another party. (b) If a hearing is uncontested, the presiding officer may substitute minutes or the report required under Section 36.410 for a method of recording the hearing provided by Subsection (a). Sec. 36.409. CONTINUANCE. The presiding officer may continue a hearing from time to time and from place to place without providing notice under Section 36.404. If the presiding officer continues a hearing without announcing at the hearing the time, date, and location of the continued hearing, the presiding officer must provide notice of the continued hearing by regular mail to the parties. Sec. 36.410. REPORT. (a) Except as provided by Subsection (e), the presiding officer shall submit a report to the board not later than the 30th day after the date a hearing is concluded. (b) The report must include: (1) a summary of the subject matter of the hearing; (2) a summary of the evidence or public comments received; and (3) the presiding officer's recommendations for board action on the subject matter of the hearing. (c) The presiding officer or general manager shall provide a copy of the report to: (1) the applicant; and (2) each person who provided comments or each designated party. (d) A person who receives a copy of the report under Subsection (c) may submit to the board written exceptions to the report. (e) If the hearing was conducted by a quorum of the board and if the presiding officer prepared a record of the hearing as provided by Section 36.408(a), the presiding officer shall determine whether to prepare and submit a report to the board under this section. Sec. 36.411. BOARD ACTION. The board shall act on a permit or permit amendment application not later than the 60th day after the date the final hearing on the application is concluded. Sec. 36.412. REQUEST FOR REHEARING OR FINDINGS AND CONCLUSIONS. (a) An applicant in a contested or uncontested hearing on an application or a party to a contested hearing may administratively appeal a decision of the board on a permit or permit amendment application by requesting written findings and conclusions or a rehearing before the board not later than the 20th day after the date of the board's decision. (b) On receipt of a timely written request, the board shall make written findings and conclusions regarding a decision of the board on a permit or permit amendment application. The board shall provide certified copies of the findings and conclusions to the person who requested them, and to each person who provided comments or each designated party, not later than the 35th day after the date the board receives the request. A person who receives a certified copy of the findings and conclusions from the board may request a rehearing before the board not later than the 20th day after the date the board issues the findings and conclusions. (c) A request for rehearing must be filed in the district office and must state the grounds for the request. If the original hearing was a contested hearing, the person requesting a rehearing must provide copies of the request to all parties to the hearing. (d) If the board grants a request for rehearing, the board shall schedule the rehearing not later than the 45th day after the date the request is granted. (e) The failure of the board to grant or deny a request for rehearing before the 91st day after the date the request is submitted is a denial of the request. Sec. 36.413. DECISION; WHEN FINAL. (a) A decision by the board on a permit or permit amendment application is final: (1) if a request for rehearing is not filed on time, on the expiration of the period for filing a request for rehearing; or (2) if a request for rehearing is filed on time, on the date: (A) the board denies the request for rehearing; or (B) the board renders a written decision after rehearing. (b) Except as provided by Subsection (c), an applicant or a party to a contested hearing may file a suit against the district under Section 36.251 to appeal a decision on a permit or permit amendment application not later than the 60th day after the date on which the decision becomes final. (c) An applicant or a party to a contested hearing may not file suit against the district under Section 36.251 if a request for rehearing was not filed on time. Sec. 36.414. CONSOLIDATED HEARING ON APPLICATIONS. (a) Except as provided by Subsection (b), a district shall process applications from a single applicant under consolidated notice and hearing procedures on written request by the applicant if the district requires a separate permit or permit amendment application for: (1) drilling, equipping, operating, or completing a well or substantially altering the size of a well or well pump under Section 36.113; (2) the spacing of water wells or the production of groundwater under Section 36.116; or (3) transferring groundwater out of a district under Section 36.122. (b) A district is not required to use consolidated notice and hearing procedures to process separate permit or permit amendment applications from a single applicant if the board cannot adequately evaluate one application until it has acted on another application. Sec. 36.415. RULES; ADDITIONAL PROCEDURES. (a) A district by rule shall adopt procedural rules to implement this subchapter and may adopt notice and hearing procedures in addition to those provided by this subchapter. (b) In adopting the rules, a district shall: (1) define under what circumstances an application is considered contested; and (2) limit participation in a hearing on a contested application to persons who have a personal justiciable interest related to a legal right, duty, privilege, power, or economic interest that is within a district's regulatory authority and affected by a permit or permit amendment application, not including persons who have an interest common to members of the public. Sec. 36.416. HEARINGS CONDUCTED BY STATE OFFICE OF ADMINISTRATIVE HEARINGS. If a district contracts with the State Office of Administrative Hearings to conduct a hearing, the hearing shall be conducted as provided by Subchapters C, D, and F, Chapter 2001, Government Code. Sec. 36.417. RULES; ALTERNATIVE DISPUTE RESOLUTION. A district by rule may develop and use alternative dispute resolution procedures in the manner provided for governmental bodies under Chapter 2009, Government Code. Sec. 36.418. APPLICABILITY OF ADMINISTRATIVE PROCEDURE ACT. (a) A district may adopt rules establishing procedures for contested hearings consistent with Subchapters C, D, and F, Chapter 2001, Government Code, including the authority to issue a subpoena, require a deposition, or order other discovery. (b) Except as provided by this section and Section 36.416, Chapter 2001, Government Code, does not apply to a hearing under this subchapter. Sec. 36.419. EDWARDS AQUIFER AUTHORITY. (a) Except as provided by Subsection (b), this subchapter does not apply to the Edwards Aquifer Authority. (b) Sections 36.412 and 36.413 apply to the Edwards Aquifer Authority. SECTION 6. Subdivision (17), Section 36.001, Water Code, is repealed. SECTION 7. The change in law made by this Act applies only to a permit or permit amendment application determined to be administratively complete or a rulemaking hearing for which notice is given by a groundwater conservation district on or after the effective date of this Act. A permit or permit amendment application determined to be administratively complete or a rulemaking hearing for which notice was given by a groundwater conservation district before the effective date of this Act is governed by the law in effect at the time the application was determined to be administratively complete or the notice was given, and the former law is continued in effect for that purpose. SECTION 8. This Act takes effect September 1, 2005.
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