HBA-MPM, RBT H.B. 801 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 801 By: Uher Environmental Regulation 7/26/1999 Enrolled 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. 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 (commission) in SECTION 2 (Sections 5.551, 5.552, 5.553, and 5.555, Water Code); SECTION 3 (Section 26.0286, Water Code); SECTION 5 (Section 382.056, Health and Safety Code); and SECTION 6 (Section 2003.047, Government Code; and that rulemaking authority previously delegated to the commission is modified in SECTION 5 (Section 382.056, Health and Safety Code), of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 5.115(a), Water Code, to remove language which states that the Texas Natural Resource Conservation Commission (commission) is not required to hold a hearing if it determines that the basis of a person's request for a hearing as an affected person is not reasonable or 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. Establishes procedures for providing public notice, an opportunity for public comment, and an opportunity for public hearing under Subchapters C-H, Chapter 2001 (Administrative Procedure), Government Code, regarding commission actions relating to a permit issued under Chapter 26 (Water Quality Control) or Chapter 27 (Injection Wells), Water Code, or Chapter 361 (Solid Waste Disposal Act), Health and Safety Code. Provides that this subchapter is procedural in nature and does not expand or restrict commission actions with respect to the procedures listed in this section. Requires the commission, by rule, to provide for additional notice, opportunity for public comment or for hearing as necessary to satisfy a United States Environmental Protection Agency's requirement for authorization of a state permit program. Defines "permit" for purposes of this subchapter. Sec. 5.552. NOTICE OF INTENT TO OBTAIN PERMIT. Requires the executive director of the commission to determine when an application is administratively complete. Requires the applicant and the chief clerk of the commission to perform certain duties with respect to the notice of intent to obtain a permit that is required to be filed as part of the application process no later than the 30th day after the executive director determines the application to be complete. Requires the commission, by rule, to establish the form and content of the notice of intent. Sets forth the information that is required to be included in the notice. Requires an applicant to comply with any public notice requirements under Chapters 26 and 27, Water Code, Chapter 361, Health and Safety Code, and rules adopted under those chapters. Requires the applicant to make a copy of the application available for review and copying at a public place in the county where the facility is located or is proposed to be located. Authorizes the applicant, in cooperation with the executive director, to hold a public meeting in the relevant county to inform the public about the application, as well as to obtain public input. 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, and requires the applicant to publish notice announcing this 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 information that must be included in the notice. Requires the applicant to comply with any applicable public notice requirements imposed by the applicable requirements under Chapters 26 and 27, Water Code; Chapter 361, Health and Safety Code; and rules adopted 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 hold one or more public meetings in the county where the facility is located or proposed to be located. Requires the executive director to hold a public meeting if requested by a member of the legislature representing the general area in which the facility is located or proposed to be located, or if the executive director determines there is substantial public interest. Section 5.555. RESPONSE TO PUBLIC COMMENTS. Requires the executive director, according to procedures provided by commission rule, to file with the chief clerk of the commission a response to each relevant and material public comment on the preliminary decision filed during the public comment period. Requires the chief clerk to transmit the executive director's decision, response to public comments, and instructions for seeking reconsideration to certain persons. Section 5.556. REQUEST FOR RECONSIDERATION OR CONTESTED CASE HEARING. Authorizes a person to request the commission reconsider the executive director's decision or hold a contested case hearing. Provides that the request for reconsideration must be filed with the commission within the time frame provided by commission rule. Requires the commission to respond to the request within the time frame allotted by rule, and prohibits it from granting a request for a contested case hearing unless it is determined that it was filed by an affected person as defined by Section 5.115 (Persons Affected in Commission Hearings; Notice of Application), Water Code. Prohibits the commission from referring an issue to the State Office of Administrative Hearings (SOAH) for a hearing unless the commission determines that the case meets certain criteria. Requires the commission, if granting a request for a contested case hearing, to limit the number and scope of issues considered and specify the maximum expected duration of the hearing. Provides that this section does not preclude the commission from holding a hearing if the public interest warrants doing so. SECTION 3. Amends Subchapter B, Chapter 26, Water Code, by adding Section 26.0286, as follows: Sec. 26.286. PROCEDURES APPLICABLE TO PERMITS FOR CERTAIN CONCENTRATED ANIMAL FEEDING OPERATIONS. Defines "sole-source surface drinking water supply" for purposes of this section. Requires the commission to process an application for authorization to construct or operate a concentrated animal feeding operations as a specific permit under Section 26.028 (Action on Application), Water Code, subject to procedures provided by Subchapter M, Chapter 5 (Texas Natural Resource Conservation Commission), if the feeding operation is located or proposed to be located in the watershed of a sole-source surface drinking water supply, and is sufficiently close, as determined by commission rule, to an intake of a public water supply system in the sole-surface drinking water supply that contaminants discharged from the feeding operation could potentially affect the public drinking water supply. SECTION 4. 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 5. Amends Section 382.056, Health and Safety Code, by amending Subsections (a), (b), (d), and (e), and adding Subsections (f)-(p), 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 the application's administrative completeness. Requires, rather than authorizes, the commission to require an applicant for a federal operating permit under Section 382.054 (Federal Operating Permit), Health and Safety Code, to publish notice of intent to obtain a permit or permit review consistent with federal requirements and with the requirements of Subsection (b), rather than this section. Requires the commission, by rule, to prescribe the form and content of the notice of intent, in addition to other information. Authorizes the commission, by rule, to prescribe alternative procedures for publication of the notice in a newspaper if the applicant is a small business stationary resource as defined by Section 382.0365(Small Business Stationary Source Assistance Program), Health and Safety Code, and will not have a significant effect on air quality. Provides that these alternatives must be cost-effective while ensuring adequate notice. Makes conforming changes. (b) Provides additional information which must be included in a notice of intent. Deletes the requirement that a statement that a person who may be affected by the emission of air contaminants from the facility or source is entitled to request a hearing from the commission be included in the notice. Makes a nonsubstantive change. (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 in the relevant county to inform the public about the application and to seek the public's input. (f) Requires the executive director to conduct a technical review of the application and issue a preliminary decision. (g) Requires an applicant to publish notice of the preliminary decision in a newspaper and the commission to seek public comment on the decision if, in response to the notice published under Subsection (a) for a permit under Section 382.0518 (Preconstruction Permit), Health and Safety Code, or a permit renewal review under Section 382.055 (Review and Renewal of Preconstruction Permit), Health and Safety Code, a person requests during the period provided by commission rule that the commission hold a public hearing and the request is not withdrawn before the preliminary decision is issued. Requires the commission to consider the request for public hearing under the procedures provided by Subsections (i)(n), and prohibits it from seeking further public comment or holding a request for a public hearing under the procedures provided by these subsections in response to a public hearing on an amendment, modification, or renewal that would not lead to an increase in allowable emissions and would not result in the emission of an air contaminant not previously emitted. Deletes existing procedural language in this subsection, which requires the commission or its delegate, except as provided by Section 382.0561 (Federal Operating Permit: Hearing), Health and Safety Code, or Subsection (e), to hold a public hearing on the permit application or renewal application prior to granting the permit or renewal if a person who may be affected by emissions or a member or the legislature from the relevant area requests a hearing in the period set by commission rule. Further deletes existing language prohibiting the commission from holding a hearing if the basis of a request by such a potentially affected person is deemed unreasonable. Deletes the requirement that reasons for which a request for a hearing on a permit be considered unreasonable include but are not be limited to an amendment, modification, or renewal that would not result in an increase in allowable emissions or the emission of an air contaminant not previously emitted. (h) Requires the commission to consider a request for a public hearing under the procedures provided by Section 382.0561, Health and Safety Code, and not under those provided by Subsections (i)-(n) if, in response to the notice published under Subsection (a) for a permit under Section 382.054 (Federal Operating Permit), Health and Safety Code, a person requests during the public comment period provided by commission rule that such a hearing take place. (i) Requires the commission, by rule, to establish the form and content of the notice, the manner of the publication, and the duration of the public comment period. Requires the notice to contain certain information. (j) Requires the applicant to make a copy of the preliminary decision available for review and copying at a public place in the county where the facility is located or proposed to be located. (k) Authorizes the executive director to hold one or more public meetings, during the public comment period, in the county where the facility is located or proposed to be located, and requires the executive director to hold a public meeting under certain conditions. (l) Requires the executive director, according to procedures adopted by the commission by rule, to file a response to each relevant and material public comment on the preliminary decision filed during the public comment period with the chief clerk of the commission. (m) Requires the chief clerk of the commission to transmit the executive director's decision, response to public comments, and instructions for requesting that the commission reconsider the decision or hold a contested case hearing to certain parties. (n) Requires the commission to consider a request that it reconsider the executive director's decision or hold a public hearing according to procedures provided by Section 5.556, Water Code, except as provided by Section 382.0561, Health and Safety Code. (o) Makes a conforming change. (p) Requires the commission, by rule, to provide for additional notice or opportunity for public comment or public hearing as necessary to satisfy a requirement to obtain or maintain a delegation or approval of a federal program. SECTION 6. 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 requires the administrative law judge to establish a docket control order designed to complete the proceeding by the date the commission specifies. Makes conforming and nonsubstantive changes. (f) Limits the scope of the hearing to the issues referred by the commission, except as provided by this subsection. Authorizes the administrative law judge to consider an unreferred issue under certain circumstances. (g) Limits the scope of permissible discovery to certain matters and the production of certain documents. (h) Requires the commission, by rule, to provide for subpoenas and commissions for depositions and require that discovery be conducted in a specific manner. (i) Deletes existing text to make conforming changes. Redesignated from existing Subsection (f). Redesignates Subsections (g)-(j) to (j)-(o). Makes conforming changes within these sections. SECTION 7. Effective date: September 1, 1999. Makes application of this Act prospective to applications declared administratively complete on or after the effective date. Specifies that the changes in law made by Section 5 of this Act do not expand or restrict the types of actions of the commission for which public notice, an opportunity for public comment, and an opportunity for public hearing are otherwise provided by existing code. SECTION 8. Emergency clause.