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.