85R26050 SLB-F     By: Phelan H.B. No. 3742     Substitute the following for H.B. No. 3742:     By:  Larson C.S.H.B. No. 3742       A BILL TO BE ENTITLED   AN ACT   relating to the procedure for action by the Texas Commission on   Environmental Quality on an application for a new or amended water   right.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 5.115, Water Code, is amended by   amending Subsection (b) and adding Subsection (h) to read as   follows:          (b)  At the time an application for a permit or license under   this code, other than an application for a water right or an   amendment to a water right under Chapter 11, is filed with the   executive director and is administratively complete, the   commission shall give notice of the application to any person who   may be affected by the granting of the permit or license. At the   time an application for a water right or an amendment to a water   right under Chapter 11 is filed with the executive director and is   technically complete, the commission shall give notice as required   by law. A state agency that receives notice under this subsection   may submit comments to the commission in response to the notice but   may not contest the issuance of a permit or license by the   commission. For the purposes of this subsection, "state agency"   does not include a river authority.          (h)  Subsections (a) and (a-1) do not apply to a hearing on an   application for a water right or an amendment to a water right 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 as provided by commission rule to   a person [to the persons] who in the judgment of the commission   should receive notice [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 requests and   submissions 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, if published notice is   required by commission rule;                (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 all persons to   whom notice is required to be mailed under commission rules adopted   under Subsection (a)[:                      [(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 the period specified in the [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 30-day notice 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," "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; or                (2)  has timely submitted one or more disputed issues   of fact or mixed questions of fact and law that are relevant and   material to the decision on the application and have the potential   to affect the justiciable interest asserted by the person, and the   person:                      (A)  owns or leases a permit, certified filing,   certificate of adjudication, or other water right recognized under   this chapter in the same basin as the basin affected by the   application;                      (B)  has an administratively complete application   pending before the commission for a new or amended water right in   the same basin as the basin affected by the application;                      (C)  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                      (D)  is otherwise an affected person under   Subsection (b).          (e)  The following are not affected persons:                (1)  a group or association that does not:                      (A)  timely request a contested case hearing; 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)(1), (d)(2)(A), (d)(2)(B), (d)(2)(C), 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, public comments, hearing requests, related filings,   and any supporting documentation;                (3)  the analysis and opinions of the executive   director;                (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; and                (5)  any other factors the commission considers   relevant.          SECTION 5.  Section 11.133, Water Code, is amended to read as   follows:          Sec. 11.133.  CONTESTED CASE HEARING ON APPLICATION.  (a)  If   an applicant requests that the applicant's application be referred   to the State Office of Administrative Hearings for a contested case   hearing, the commission shall refer the application to the office.          (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 contested case 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)  The commission may not refer an issue regarding an   application for a contested case hearing under Subsection (b)   unless the commission determines that the issue:                (1)  is a disputed issue of fact or mixed question of   fact and law;                (2)  is relevant and material to a decision on the   application; and                (3)  was raised by an affected person whose hearing   request was granted by the commission.          (e)  If the commission grants a request for a contested case   hearing under Subsection (b), the commission shall:                (1)  determine the number and scope of issues to be   referred for a hearing; and                (2)  consistent with the nature and number of issues to   be considered at the hearing, specify the maximum expected duration   of the proceeding, beginning with the holding of the preliminary   hearing and concluding with the issuance of the 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 require that the period be extended.          (f)  The administrative law judge who conducts the contested   case hearing or the commission, if the commission conducts the   hearing, may extend the proceeding beyond the period specified by   the commission under Subsection (e)(2) if:                (1)  the parties to the hearing agree to an extension;   or                (2)  the administrative law judge or the commission, if   the commission conducts the hearing, determines that failure to   extend the proceeding would deprive a party of due process or   another constitutional right.          (g)  For the purposes of Subsection (f)(2), a political   subdivision has the same constitutional rights as an individual.          (h)  If the commission refers an application for a contested   case hearing under Subsection (a), the administrative law judge who   conducts the hearing:                (1)  may not grant party status to:                      (A)  a person who is not an affected person under   Section 11.1321; or                      (B)  a person whose hearing request was denied by   the commission; and                (2)  shall determine the number and scope of issues to   be considered at the hearing in accordance with the limitations   contained in Subsection (d).          (i)  Subsection (h)(1) does not apply to the office of public   interest counsel or the executive director.          (j)  In the event of a conflict between this section and any   other law, this section prevails.          SECTION 6.  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 7.  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 8.  Section 11.132(f), Water Code, is repealed.          SECTION 9.  (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 for a new or amended water right 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 10.  This Act takes effect immediately if it   receives a vote of two-thirds of all the members elected to each   house, as provided by Section 39, Article III, Texas Constitution.     If this Act does not receive the vote necessary for immediate   effect, this Act takes effect September 1, 2017.