85R6203 SLB-F

By: Phelan H.B. No. 3742

A BILL TO BE ENTITLED

AN ACT

relating to the procedure for contested case hearings regarding water rights permit applications and amendments to certain water management plans.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 5.115, Water Code, is amended by adding Subsection (h) to read as follows:

(h) This section does not apply to a hearing on an application for a water rights permit or an amendment to a water rights permit under Chapter 11.

SECTION 2. Section 11.1273(d), Water Code, is amended to read as follows:

(d) The commission shall provide an opportunity for public comment and a contested case [public] hearing on the application, consistent with the process for other water rights applications.

SECTION 3. Sections 11.132(a), (c), and (d), Water Code, are amended to read as follows:

(a) Notice shall be given to the persons who in the judgment of the commission may be affected by an application, including those persons listed in Subdivision (2), Subsection (d), of this section. The commission, on the motion of a commissioner or on the request of the executive director, the applicant, or any affected person, shall hold a contested case [public] hearing on the application.

(c) In the notice, the commission shall:

(1) state the name and address of the applicant;

(2) state the date the application was filed;

(3) state the purpose and extent of the proposed appropriation of water;

(4) identify the source of supply and the place where the water is to be stored or taken or diverted from the source of supply;

(5) describe the process by which the commission will consider the application [specify the time and location where the commission will consider the application]; [and]

(6) provide notice that, not later than the 30th day after the date of the notice, a person described by Subsection (a) may:

(A) request a contested case hearing; or

(B) submit:

(i) comments on the application; or

(ii) disputed issues of fact or mixed questions of fact and law that are relevant and material to the decision on the application;

(7) describe the process for the submissions and requests described by Subdivision (6); and

(8) give any additional information the commission considers necessary.

(d) The commission may act on the application without holding a contested case [public] hearing if:

(1) not less than 30 days before the date of action on the application by the commission, the applicant has published the commission's notice of the application at least once in a newspaper regularly published or circulated within the section of the state where the source of water is located;

(2) not less than 30 days before the date of action on the application by the commission, the commission mails a copy of the notice by first-class mail, postage prepaid, to:

(A) each claimant or appropriator of water from the source of water supply, the record of whose claim or appropriation has been filed with the commission; and

(B) all navigation districts within the river basin concerned; and

(3) within 30 days after the date of the newspaper publication of the commission's notice:

(A) [,] a contested case [public] hearing has not been requested in writing by a commissioner, the executive director, the applicant, or an affected person; or

(B) no disputed issue of fact or mixed question of fact and law that is relevant and material to the decision on the application has been submitted by the applicant or an affected person [who objects to the application].

SECTION 4. Subchapter D, Chapter 11, Water Code, is amended by adding Section 11.1321 to read as follows:

Sec. 11.1321. AFFECTED PERSON. (a) In this section, "timely" means within the period described by Section 11.132.

(b) For the purpose of an administrative hearing held by or for the commission involving a contested case under this chapter, "affected person," or "person affected," or "person who may be affected" means a person who has a personal justiciable interest related to a legal right, duty, privilege, power, or economic interest affected by the administrative hearing. An interest common to members of the general public does not qualify as a personal justiciable interest.

(c) Unless an application is referred to the State Office of Administrative Hearings under Section 11.133(a), the commission shall determine whether a person is an affected person at a public meeting of the commission.

(d) The commission shall make a determination that a person is an affected person regarding the application if the person:

(1) is the applicant;

(2) owns or leases a permit, certified filing, or certificate of adjudication of a senior or superior water right in the same basin as the basin affected by the application;

(3) has an application pending before the commission for a new or amended water right in the same basin as the basin affected by the application;

(4) has an application pending before the commission for a change of ownership of a water right in the same basin as the basin affected by the application; or

(5) has timely submitted one or more disputed issues of fact or mixed questions of fact and law that:

(A) are relevant and material to the decision on the application; and

(B) have the potential to affect the justiciable interest asserted by the person.

(e) The following are not affected persons:

(1) a group or association that does not:

(A) timely request a contested case hearing in writing; and

(B) identify by name and physical address or location a member of the group or association who would be an affected person in the person's own right;

(2) a hearing requestor, even if otherwise an affected person, who did not timely submit in writing a disputed issue of fact or mixed question of fact and law that is relevant and material to the decision on the application; or

(3) a person, even if otherwise an affected person, who did not timely request a contested case hearing.

(f) For a person other than those described by Subsection (d) or (e), the commission shall make a determination regarding whether a person is an affected person by considering:

(1) the likely impact of approving the application on the health, safety, and use of the property of the hearing requestor, to the extent the impact relates to issues within the commission's jurisdiction;

(2) the administrative record, including the permit application and any supporting documentation;

(3) the analysis and opinions of the executive director; and

(4) any other expert reports, affidavits, opinions, or data submitted on or before any applicable deadline to the commission by the executive director, the applicant, or a hearing requestor.

SECTION 5. Section 11.133, Water Code, is amended to read as follows:

Sec. 11.133. HEARING. (a) If an applicant requests a contested case hearing and that the hearing be referred to the State Office of Administrative Hearings, the commission shall refer the hearing to the State Office of Administrative Hearings.

(b) If the commission determines at a public meeting of the commission that a contested case hearing has been requested by an affected person, the commission shall either:

(1) hold a contested case hearing on the application before the commission at a time and place designated by the commission; or

(2) refer the application to the State Office of Administrative Hearings.

(c) [At the time and place stated in the notice, the commission shall hold a hearing on the application.] Any affected person may appear at the hearing in person or by attorney or may enter the person's [his] appearance in writing. Any affected person who appears may present objection to the issuance of the permit. The commission or the State Office of Administrative Hearings may receive evidence, orally or by affidavit, in support of or in opposition to the issuance of the permit, and it may hear arguments. Chapter 2001, Government Code, applies to a contested case hearing held under this section.

(d) If the commission grants a request for a hearing, the commission shall:

(1) for a hearing other than a hearing referred to the State Office of Administrative Hearings under Subsection (a), determine the number and scope of issues to be considered in the contested case hearing; and

(2) consistent with the nature and number of issues to be considered at the hearing, specify the maximum duration of the hearing, beginning on the date of the preliminary hearing and concluding with the issuance of a proposal for decision, which may not exceed a period of 270 days, unless the commission determines that the nature and number of issues to be considered at the hearing requires that the period be extended.

(e) An issue included in the scope of issues determined under Subsection (d)(1) must be an issue the commission determines:

(1) involves a disputed question of fact or a mixed question of fact and law;

(2) is relevant and material to the decision on the application; and

(3) was raised by an affected person during the notice period described by Section 11.132.

SECTION 6. Subchapter D, Chapter 11, Water Code, is amended by adding Section 11.1335 to read as follows:

Sec. 11.1335. HEARINGS CONDUCTED BY THE STATE OFFICE OF ADMINISTRATIVE HEARINGS. (a) The presiding administrative law judge of a contested case hearing referred under Section 11.133(b)(2):

(1) may not grant party status to a person who is not an affected person as determined by the commission under Section 11.1321; and

(2) shall limit the scope of the hearing to the disputed issues of fact or mixed questions of fact and law identified by the commission under Section 11.133(d)(1).

(b) The presiding administrative law judge of a contested case hearing referred under Section 11.133(a):

(1) may not grant party status to a person who is not an affected person; and

(2) shall limit the scope of the hearing to:

(A) disputed issues of fact or mixed questions of fact and law that:

(i) are relevant and material to the decision on the application; and

(ii) were raised by a party to the hearing within the period described by Section 11.132;

(B) issues that the parties have agreed to include in the hearing, with the approval of the presiding judge; and

(C) issues that the presiding judge determines are necessary to prevent the deprivation of due process or another constitutional right to a party.

(c) The administrative law judge who hears the case shall issue a proposal for decision on or before the deadline determined by the commission under Section 11.133(d)(2) unless the judge determines that failure to extend the deadline would unduly deprive a party to the hearing of due process or another constitutional right.

(d) For the purposes of Subsections (b) and (c), a political subdivision has the same rights as an individual.

SECTION 7. Sections 11.143(d) and (g), Water Code, are amended to read as follows:

(d) Except as otherwise specifically provided by this subsection, before the commission may approve the application and issue the permit, it shall give notice and hold a hearing as prescribed by this section. The commission may act on the application without holding a contested case [public] hearing if:

(1) not less than 30 days before the date of action on the application by the commission, the applicant has published the commission's notice of the application at least once in a newspaper regularly published or circulated within the section of the state where the source of water is located;

(2) not less than 30 days before the date of action on the application by the commission, the commission mails a copy of the notice by first-class mail, postage prepaid, to each person whose claim or appropriation has been filed with the commission and whose diversion point is downstream from that described in the application; and

(3) within 30 days after the date of the newspaper publication of the commission's notice, a contested case [public] hearing is not requested in writing by a commissioner, the executive director, or an affected person who objects to the application.

(g) If on the date specified in the notice prescribed by Subsection (d) of this section, the commission determines that a contested case [public] hearing must be held, the matter shall be remanded for hearing without the necessity of issuing further notice other than advising all parties of the time and place where the hearing is to convene.

SECTION 8. Section 11.174, Water Code, is amended to read as follows:

Sec. 11.174. COMMISSION MAY INITIATE PROCEEDINGS. When the commission finds that its records do not show that some portion of the water has been used during the past 10 years, the executive director may initiate proceedings, terminated by contested case [public] hearing, to cancel the permit, certified filing, or certificate of adjudication in whole or in part.

SECTION 9. Section 11.132(f), Water Code, is repealed.

SECTION 10. (a) As soon as practicable after the effective date of this Act, the Texas Commission on Environmental Quality shall adopt rules to implement the changes in law made by this Act.

(b) The changes in law made by this Act apply only to an application received by the Texas Commission on Environmental Quality on or after the effective date of the rules adopted under Subsection (a) of this section. An application received before the effective date of the rules adopted under Subsection (a) of this section is governed by the law in effect on the date the application was received, and the former law is continued in effect for that purpose.

SECTION 11. This Act takes effect September 1, 2017.