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.