HBA-RBT H.B. 801 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 801 By: Uher Environmental Regulation 4/13/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE The Texas Natural Resource Conservation Commission (commission) is responsible for permitting programs which authorize wastewater discharges, hazardous and solid waste management, underground injection, and air emissions. For certain commission actions, state law requires that the public be afforded an opportunity to request a contested case hearing. In 1975, the Legislature passed the Administrative Procedure and Texas Register Act, which established the current process for contested case hearings. This process pre-dates many of the refinements to administrative decision-making and public involvement that have occurred both at the federal level and in other states. C.S.H.B. 801 modifies the current permitting process for certain environmental permit programs administered by the commission for which public notice and opportunity for hearing are currently required. This bill requires early public notice, encourages early public involvement, and requires substantive public comment and agency response. This bill establishes criteria that would limit the scope of hearings by requiring referral of discrete issues that are in dispute and material to the decision of the commission. In addition, the bill requires the commission to establish hearing deadlines to prevent unnecessary delays in the permitting process. This process will apply to applications for issuance, amendment, and renewal of permits pursuant to Chapters 26 and 27 of the Water Code (water quality permits, underground injection permits) and Chapters 361 and 382 of the Health and Safety Code (solid waste permits, air permits). RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Natural Resource Conservation Commission in SECTION 2 (Sections 5.551, 5.552, 5.553, 5.555, and 5.556, Water Code); SECTION 4 (Section 382.056, Health and Safety Code); and SECTION 5 (Section 2003.47, Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 5.115(a), Water Code, to delete text providing that the Texas Natural Resource Conservation Commission (commission) is not required to hold a hearing if the commission determines that the basis of a person's request for a hearing as an affected person is not reasonable or is not supported by competent evidence. SECTION 2. Amends Chapter 5, Water Code, by adding Subchapter M, as follows: SUBCHAPTER M. ENVIRONMENTAL PERMITTING PROCEDURES Sec. 5.551. PERMITTING PROCEDURES; APPLICABILITY. Provides that this subchapter applies only to commission permit actions for which public notice and an opportunity for public hearing under Subchapter C-H, Chapter 2001 of the Government Code, are required under Chapter 26 or 27 of the Water Code (concerning water quality permits or underground injection permits) or under Chapter 361, Health and Safety Code (concerning solid waste permits). Provides that this subchapter does not expand or restrict the types of commission actions for which notice and an opportunity for public hearing under Subchapters C-H, Chapter 2001, Government Code, are required. Requires the commission by rule to provide for additional notice, opportunity for public comment, or opportunity for hearing to satisfy requirements for United States Environmental Protection Agency authorization of a state permit program. Defines "permit." Sec. 5.552. NOTICE OF INTENT TO OBTAIN PERMIT. Requires the executive director to determine when an application is administratively complete. Requires the applicant to publish notice of intent to obtain a permit within 30 days after the determination of administrative completeness. Specifies how and to whom notice must be given. Requires the commission, by rule, to establish the form and content of the initial notice. Specifies minimum requirements for information to be contained in the notice. Requires the applicant to comply with any additional public notice requirements imposed by the applicable requirements of Chapters 26 and 27 of the Water Code and Chapter 361 of the Health and Safety Code and the regulations promulgated under those chapters. Requires the permit applicant to place a copy of the application for review and copying in a public place in the county in which the facility is located or proposed to be located. Allows the permit applicant, in cooperation with the executive director, to hold a public meeting in the county where the facility is located or proposed to be located to inform the public about the application and to seek input from the public. Sec. 5.553. PRELIMINARY DECISION; NOTICE AND PUBLIC COMMENT. Requires the executive director to conduct a technical review of the application and issue a preliminary decision. Requires the applicant to publish notice announcing the executive director's preliminary decision. Requires the commission by rule to establish the form and content of the notice, the manner of newspaper publication, and the length of the comment period. Specifies minimum requirements for notice information. Requires the applicant to comply with any additional public notice requirements imposed by the applicable requirements of Chapters 26 and 27 of the Water Code and Chapter 361 of the Health and Safety Code and the regulations promulgated under those chapters. Requires the applicant to make a copy of the preliminary decision available for review and copying in a public place in the county in which the facility is located or proposed to be located. Sec. 5.554. PUBLIC MEETING. Authorizes the executive director, during the comment period, to convene public meetings in the county where the facility is located or proposed to be located. Requires that a public meeting be convened if requested by a member of the legislature from the general area in which the facility is located or proposed to be located, or if the executive director concludes that there is substantial public interest. Section 5.555. RESPONSE TO PUBLIC COMMENTS. Requires the executive director to file with the chief clerk of the commission a response to each relevant and material public comment on the preliminary decision. Requires the chief clerk to transmit to certain persons the executive director's response to comment responses, the executive director's decision, and instructions for seeking reconsideration. Section 5.556. REQUEST FOR RECONSIDERATION OR CONTESTED CASE HEARING. Provides that an affected person may request that the commission reconsider the preliminary decision or hold a contested case hearing. Provides that such a request must be filed with the commission within the time frame established by commission rule. Requires the commission to act on a request for reconsideration or for contested case hearing within the time frame established by commission rule. Prohibits the commission from granting a request for a contested case hearing unless the affected person mets the definition in Section 5.115 (Persons Affected in Commission Hearings; Notice of Application), Water Code. Specifies the criteria governing the commission's decision to refer an issue to the State Office of Administrative Hearings (SOAH) for hearing. Provides that if the commission grants a hearing request it must limit the number and scope of issues considered and specify the maximum expected duration of the hearing. Provides that nothing in the section precludes the commission from holding a hearing if it determines that the public interest warrants doing so. SECTION 3. Amends Section 361.088, Health and Safety Code, by amending Subsection (c), and by adding Subsections (e) and (f), to authorize the commission to act on certain types of applications without providing an opportunity for a contested case hearing after early public notice and notice of preliminary decision and public comment have been given as required. Requires the commission to provide an opportunity for a contested case hearing if the applicant's compliance history for the preceding five years raises an issue regarding the applicant's ability to comply with a material term of its permit. SECTION 4. Amends Section 382.056, Health and Safety Code, by amending Subsections (a), (b), (d), and (e), and adding Subsections (f)-(n), as follows: (a) Requires an applicant for a preconstruction permit, a federal operating permit, or a permit renewal review who publishes notice of intent to obtain the permit or permit review, to do so within 30 days following the determination of administrative completeness. Requires the commission to prescribe the form and content of the notice in addition to when notice must be published. (b) Provides additional notice requirements. Deletes text concerning a statement to be included in the notice by affected persons entitled to request a hearing. Makes conforming changes. (d) Requires the permit applicant to place a copy of the application for review and copying in a public place in the county in which the facility is located or proposed to be located. (e) Authorizes an applicant, in cooperation with the executive director, to hold a public meeting to inform the public about the application and to seek input from the public. (f) Requires the executive director to conduct a technical review of the application and issue a preliminary decision. (g) Provides for further public notice and comment procedures where a person makes a timely hearing request following the initial public notice that is not withdrawn prior to the executive director's preliminary decision. Prohibits the commission from seeking further public comment or holding a hearing in response to a hearing request on an amendment, modification, or renewal that would not result in an increase in allowable emissions and that would not result in the emission of an air contaminant not previously emitted. Makes conforming changes. (h) Requires the commission, by rule, to establish the form and content of the notice, the manner of publication, and the duration of the comment period. Specifies minimum requirements for notice. (i) Requires the applicant to make a copy of the preliminary decision available for review and copying at a public place in the county in which the facility or federal source is located or proposed to be located. (j) Authorizes the executive director to convene public meetings in the county where the facility is located or proposed. Specifies conditions under which the executive director is required to hold a public meeting. (k) Requires the executive director to prepare and file application decisions and comment responses with the chief clerk. (l) Requires the chief clerk to transmit to certain persons the executive director's comment responses, the executive director's decision, and instructions for seeking reconsideration. (m) Provides that the commission's consideration of a request for a public hearing and requests for reconsideration are governed by Section 5.556, Water Code, except as provided by Section 382.0561. (n) Makes a conforming change. SECTION 5. Amends Section 2003.047, Government Code, by amending Subsections (e)-(j), and adding Subsections (k)-(o), as follows: (e) Requires the commission to provide to the administrative law judge a date by which the proceeding is expected to be completed and a proposal for decision provided to the commission. Specifies circumstances in which the administrative law judge may extend the proceeding and requiring the administrative law judge to establish a docket control order. (f) Establishes the scope of issues to be considered at the hearing. (g) Establishes the scope of permissible discovery. (h) Requires the commission to promulgate discovery rules that are consistent with the nature and complexity of the types of cases considered by the commission. Redesignates Subsections (f)-(j) to (i)-(o) SECTION 6. Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 7. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1 of the original bill added Subchapter M, Chapter 5, Water Code (Environmental Permitting Procedures), including proposed Sections 5.551-5.559, Water Code, which: established a regulatory scheme for environmental permitting procedures which defined permit, set forth the circumstances in which the Act applied; provided for public notice and an opportunity to comment and allowed certain persons to request a public hearing; established procedures for public hearings; provided for a supplemental information process; required the executive director to issue decisions on the permit applications; and provided for commission and judicial review. The substitute in SECTION 2 adds a new proposed Subchapter M, Chapter 5, Water Code (Environmental Permitting Procedures), including Sections 5.551-5.556, Water Code, thereby replacing the proposed regulatory scheme with a different regulatory scheme for environmental permitting procedures, which: provides the applicability of permitting procedures; requires the publication of notice of intent to obtain a permit; requires the executive director to issue a preliminary decision and provide notice and an opportunity for public comment; provides for a public meeting; provides for a response to public comments, and provides for a request for reconsideration or contested case hearing. The substitute modifies the original in SECTION 1 by adding proposed Section 5.115(a), Water Code, to delete text providing that the Texas Natural Resource Conservation Commission (commission) is not required to hold a hearing if the commission determines that the basis of a person's request for a hearing as an affected person is not reasonable or is not supported by competent evidence. The substitute modifies the original in SECTION 3 by amending Section 361.088, Health and Safety Code, by amending Subsection (c), and by adding Subsections (e) and (f), relating to whether the commission is required to provide an opportunity for a contested case hearing The substitute modifies the original in SECTION 4 by amending Section 382.056, Health and Safety Code, by amending Subsections (a), (b), (d), and (e), and adding Subsections (f)-(n), authorizing the commission to renew certai permits without providing an opportunity for a contested case hearing. The substitute modifies the original in SECTION 5 by amending Section 2003.047, Government Code, by amending Subsections (e)-(j), and adding Subsections (k)-(o), to set forth requirements relating to the nature and scope of administrative hearings. The substitute modifies the original by redesignating SECTIONS 2 (effective date) and 3 (emergency clause) as SECTIONS 6 and 7.