HBA-DMH C.S.S.B. 1071 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 1071 By: Armbrister Environmental Regulation 5/3/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE The 76th Texas Legislature enacted legislation to create a new procedure for contested case proceedings on certain environmental permitting actions by the Texas Natural Resource Conservation Commission (TNRCC). The legislation required early notice of applications, more detailed public comments, and a narrowing of contested issues prior to a referral of a matter to the State Office of Administrative Hearings for a contested case hearing. The legislation intended to increase public participation and streamline contested case matters before TNRCC. Both industry and environmental groups believed that early review of an application and an examination of disputed issues would result in more efficient, less costly permit proceedings. C.S.S.B. 1071 provides applicants the option of proceeding directly to a contested case hearing immediately after the executive director of TNRCC issues a preliminary decision. 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 1 (Section 5.557, Water Code) and SECTION 3 of this bill. ANALYSIS C.S.S.B. 1071 amends the Water and Health and Safety codes relating to contested case hearings regarding applications for certain environmental permits. The bill requires the Texas Natural Resource Conservation Commission (TNRCC), immediately after the executive director of TNRCC issues a preliminary decision on a permit application and on the request of the applicant or the executive director, to refer the application directly to the State Office of Administrative Hearings for a contested case hearing on whether the application complies with all applicable statutory and regulatory requirements. The bill requires TNRCC by rule to provide for public comment and the executive director's response to public comment to be entered into the administrative record of decision on an application. The bill requires TNRCC to adopt rules to implement these provisions as soon as is necessary for the rules to take effect on or before January 1, 2002. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 1071 differs from the original bill to apply the public comment provisions to all environmental permits under this section, whereas the original only applied the provisions to a permit under a delegated or authorized federal program if the comment and response are required for permit decisions under that program. The substitute provides that the executive director, in addition to an applicant, may request a referral of a permit application. The substitute requires the Texas Natural Resource Conservation Commission (TNRCC), rather than TNRCC or the general counsel, to refer the application directly to the State Office of Administrative Hearings for a contested case hearing on whether the application complies with all applicable statutory and regulatory requirements.