(a) The office shall perform contested case hearings for the Texas Commission on Environmental Quality.
(b) The office shall conduct hearings relating to contested cases before the commission, other than a hearing conducted by one or more commissioners. The commission by rule may delegate to the office the responsibility to hear any other matter before the commission if consistent with the responsibilities of the office.

(c) The office may contract with qualified individuals to serve as temporary administrative law judges as necessary.
(d) To be eligible to preside at a hearing on behalf of the commission, an administrative law judge, regardless of temporary or permanent status, must be licensed to practice law in this state and have the expertise necessary to conduct hearings regarding technical or other specialized subjects that may come before the commission.
(e) In referring a matter for hearing, the commission shall provide to the administrative law judge a list of disputed issues. The commission shall specify the date by which the administrative law judge is expected to complete the proceeding and provide a proposal for decision to the commission. The administrative law judge may extend the proceeding if the administrative law judge determines that failure to grant an extension would deprive a party of due process or another constitutional right. The administrative law judge shall establish a docket control order designed to complete the proceeding by the date specified by the commission.
(e-1) This subsection applies only to a matter referred under Section 5.556, Water Code. Each issue referred by the commission must have been raised by an affected person in a comment submitted by that affected person in response to a permit application in a timely manner. The list of issues submitted under Subsection (e) must:
(1) be detailed and complete; and
(2) contain either:
(A) only factual questions; or
(B) mixed questions of fact and law.
(e-2) For a matter referred under Section 5.556 or 5.557, Water Code, the administrative law judge must complete the proceeding and provide a proposal for decision to the commission not later than the earlier of:
(1) the 180th day after the date of the preliminary hearing; or
(2) the date specified by the commission.
(e-3) The deadline specified by Subsection (e-2) or (e-6), as applicable, may be extended:
(1) by agreement of the parties with the approval of the administrative law judge; or
(2) by the administrative law judge if the judge determines that failure to extend the deadline would unduly deprive a party of due process or another constitutional right.
(e-4) For the purposes of Subsection (e-3)(2), a political subdivision has the same constitutional rights as an individual.
(e-5) This subsection applies only to a matter referred under Section 5.557, Water Code. The administrative law judge may not hold a preliminary hearing until after the executive director has issued a response to public comments under Section 5.555, Water Code.
(e-6) For a matter pertaining to an application described by Section 11.122(b-1), Water Code, the administrative law judge must complete the proceeding and provide a proposal for decision to the commission not later than the 270th day after the date the matter was referred to the office.
(f) Except as otherwise provided by this subsection, the scope of the hearing is limited to the issues referred by the commission. On the request of a party, the administrative law judge may consider an issue that was not referred by the commission if the administrative law judge determines that:
(1) the issue is material;
(2) the issue is supported by evidence; and
(3) there are good reasons for the failure to supply available information regarding the issue during the public comment period.
(g) The scope of permissible discovery is limited to:
(1) any matter reasonably calculated to lead to the discovery of admissible evidence regarding any issue referred to the administrative law judge by the commission or that the administrative law judge has agreed to consider; and
(2) the production of documents:
(A) reviewed or relied on in preparing application materials or selecting the site of the proposed facility; or
(B) relating to the ownership of the applicant or the owner or operator of the facility or proposed facility.
(h) The commission by rule shall:
(1) provide for subpoenas and commissions for depositions; and
(2) require that discovery be conducted in accordance with the Texas Rules of Civil Procedure, except that the commission by rule shall determine the level of discovery under Rule 190, Texas Rules of Civil Procedure, appropriate for each type of case considered by the commission, taking into account the nature and complexity of the case.
(i) The office and the commission jointly shall adopt rules providing for certification to the commission of an issue that involves an ultimate finding of compliance with or satisfaction of a statutory standard the determination of which is committed to the discretion or judgment of the commission by law. The rules must address, at a minimum, the issues that are appropriate for certification and the procedure to be used in certifying the issue. Each agency shall publish the jointly adopted rules.
(i-1) In a contested case regarding a permit application referred under Section 5.556 or 5.557, Water Code, the filing with the office of the application, the draft permit prepared by the executive director of the commission, the preliminary decision issued by the executive director, and other sufficient supporting documentation in the administrative record of the permit application establishes a prima facie demonstration that:
(1) the draft permit meets all state and federal legal and technical requirements; and
(2) a permit, if issued consistent with the draft permit, would protect human health and safety, the environment, and physical property.
(i-2) A party may rebut a demonstration under Subsection (i-1) by presenting evidence that:
(1) relates to a matter referred under Section 5.557, Water Code, or an issue included in a list submitted under Subsection (e) in connection with a matter referred under Section 5.556, Water Code; and
(2) demonstrates that one or more provisions in the draft permit violate a specifically applicable state or federal requirement.
(i-3) If in accordance with Subsection (i-2) a party rebuts a presumption established under Subsection (i-1), the applicant and the executive director may present additional evidence to support the draft permit.
(j) An administrative law judge hearing a case on behalf of the commission, on the judge’s own motion or on motion of a party and after notice and an opportunity for a hearing, may impose appropriate sanctions as provided by Subsection (k) against a party or its representative for:
(1) filing a motion or pleading that is groundless and brought:
(A) in bad faith;
(B) for the purpose of harassment; or
(C) for any other improper purpose, such as to cause unnecessary delay or needless increase in the cost of the proceeding;
(2) abuse of the discovery process in seeking, making, or resisting discovery; or
(3) failure to obey an order of the administrative law judge or the commission.
(k) A sanction imposed under Subsection (j) may include, as appropriate and justified, issuance of an order:
(1) disallowing further discovery of any kind or of a particular kind by the offending party;
(2) charging all or any part of the expenses of discovery against the offending party or its representatives;
(3) holding that designated facts be considered admitted for purposes of the proceeding;
(4) refusing to allow the offending party to support or oppose a designated claim or defense or prohibiting the party from introducing designated matters in evidence;
(5) disallowing in whole or in part requests for relief by the offending party and excluding evidence in support of those requests; and
(6) striking pleadings or testimony, or both, in whole or in part.
(l) After hearing evidence and receiving legal argument, an administrative law judge shall make findings of fact, conclusions of law, and any ultimate findings required by statute, all of which shall be separately stated. The administrative law judge shall make a proposal for decision to the commission and shall serve the proposal for decision on all parties. An opportunity shall be given to each party to file exceptions to the proposal for decision and briefs related to the issues addressed in the proposal for decision. The commission shall consider and act on the proposal for decision.
(m) Except as provided in Section 361.0832, Health and Safety Code, the commission shall consider the proposal for decision prepared by the administrative law judge, the exceptions of the parties, and the briefs and argument of the parties. The commission may amend the proposal for decision, including any finding of fact, but any such amendment thereto and order shall be based solely on the record made before the administrative law judge. Any such amendment by the commission shall be accompanied by an explanation of the basis of the amendment. The commission may also refer the matter back to the administrative law judge to reconsider any findings and conclusions set forth in the proposal for decision or take additional evidence or to make additional findings of fact or conclusions of law. The commission shall serve a copy of the commission’s order, including its finding of facts and conclusions of law, on each party.
(n) The provisions of Chapter 2001 shall apply to contested case hearings for the commission to the extent not inconsistent with this section.
(o) An administrative law judge hearing a case on behalf of the commission may not, without the agreement of all parties, issue an order referring the case to an alternative dispute resolution procedure if the commission has already conducted an unsuccessful alternative dispute resolution procedure. If the commission has not already conducted an alternative dispute resolution procedure, the administrative law judge shall consider the commission’s recommendation in determining whether to issue an order referring the case to the procedure.