On May 23rd, Governor Abbott signed SB 709, fundamentally changing Texas’s contested hearing process for environmental permits. Effective September 1, SB 709 requires the Texas Commission on Environmental Quality to adopt rules implementing its changes by no later than January 1, 2016 and to provide notice before then that these changes apply to applications filed after September 1. Written in response to complaints about the time required to process environmental permit applications, specifically as compared with the process in neighboring states, SB 709 makes a number of fundamental changes to streamline the process. These changes apply to most of the environmental permitting programs the TCEQ administers.

First, each issue referred by the Commission must have been raised by an “affected person” in a comment filed in a timely manner during a prescribed comment period. Each such issue must be detailed and complete and contain either factual questions or mixed questions of fact and law.

Second, the administrative law judge (“ALJ”) to whom the matter has been referred must complete the proceeding and provide a proposal for decision (“PFD”) no later than the 180th day after the preliminary hearing or a date specified by the Commission unless the parties agree otherwise or the ALJ determines a failure to extend the deadline would unduly deprive a party of due process or another constitutional right.

Third, the filing of an application at the State Office of Administrative Hearings, the preparation by the TCEQ Executive Director of a draft permit and a preliminary decision, and “other sufficient supporting documentation of the administrative record” “establishes a prima facie demonstration – a presumption – that (1) the draft permit meets all federal and state legal and technical requirements and (2) a permit issued consistent with that draft would protect human health and safety, the environment, and physical property.”

  • To rebut that demonstration, a protestant must present evidence that, in general, relates to the referred issue and that demonstrates that one or more provisions in the draft permit violate a specifically applicable state or federal requirement.
  • If the protestant is able to rebut that demonstration, the applicant and the Executive Director may present additional evidence to support the draft permit.

Fourth, the TCEQ must adopt rules specifying the factors that must be considered in determining whether a person is an affected person entitled to a contested case hearing under the agency’s air, waste, and water programs, as well as whether an association is too. The act specifically allows the agency to consider: (1) the merits of the application; (2) the administrative record, including the permit application and supporting documentation; (3) the analysis and opinions of the Executive Director; and (4) any other expert reports, affidavits, opinions, or data submitted by the Executive Director, the applicant, or a protestant on or before any applicable deadline. The Commission may not find that an association is an affected person unless that association identifies a member who would be an affected person in their own right. The Commission also may not find an individual to be an affected person unless they timely submitted comments on the permit application.

Fifth, the Executive Director must participate as a party to a contested case proceeding to provide information to complete the administrative record and to support the Executive Director’s position developed in the underlying proceeding unless the Executive Director has reversed or revised that position.

Sixth, the Commission must provide written notice to the affected state senator and representative not later than the 30th day before the Commission issues the draft permit.

The act contains provisions for transitioning to this new streamlined procedure. The net effect will be not only to streamline the process, but also to shift the burden of proof to the protestant and possibly to raise the threshold for protestants to be entitled to a contested case hearing.