Establish an Independent Office of Environmental Public Interest Counsel

To ensure citizen representation in environmental administrative hearings, state law should establish an independent Office of Environmental Public Interest Counsel to be attached to the Texas Natural Resource Conservation Commission.


Background
Most environmental cases handled administratively by the Texas Air Control Board (TA CB) involve the conflicting interests of various parties. First, any company regulated by the agency has an interest in ensuring that its position is represented before the board. TACB, through its general counsel, is responsible for supporting and defendi ng agency laws, rules, policies and decisions. Individuals affected by actions of the regulated company also may be a party to the case and seek to protect their personal interests. In some cases, the general public may have an interest different from that of any of the other parties.

State law provides for contested case hearings to be held whenever a company seeks a permit and persons who may be affected by that company s emissions request a hearing. The hearings examiner sets the hearing and publicizes it through notices in local papers and the Texas Register . The examiner also holds a pre-hearing conference to identify parties to the hearing and to consider disputed issues and other preliminary matters.

Before the hearing, a TACB hearings examiner s ets a date by which the parties must exchange all documentary or written evidence and lists of prospective witnesses. The hearing itself is a formal procedure, broadly similar to a civil court proceeding, featuring rules of evidence, agency procedural rule s, formal motions, sworn witnesses and direct and cross-examination of witnesses. Individuals may not testify without being called as witnesses by a party or the examiner, and general comments from the public normally are not permitted. Parties may hire at torneys to represent them, but are not required to do so. The applicant must prove by a preponderance of the evidence the standard in civil cases that a permit should be issued. Records of the hearing are transcribed and used by the examiner to prepare a proposed decision for TACB board members, who make the final decision.

TACB hearings are related to permit matters, although the agency s statute also provides for hearings in enforcement cases if the agency proposes that a company pay a penalty for a violation and the company protests the penalty. Hearings of this nature have not been held recently. Typically, when TACB and a violating company do not agree on a penalty amount, the agency refers the case to the Office of the Attorney General for action.

The Texas Performance Review (TPR) examined TACB s hearings process to determine if all parties to contested cases are afforded equal representation, and if the system allows sufficient public input. Interviews were conducted with hearings examiners, pub lic interest groups, public interest counsels and other persons. In addition, laws and information relating to the purpose and benefits of such counsels were reviewed.

Heightened public awareness of environmental issues has resulted in a rising number of requests for hearings by citizens and citizen groups. Because some critical environmental cases are handled in relatively complex, quasi-judicial settings, the need for public representation and protection is increasing. Members of the public generally f ind that companies are represented by attorneys with expertise in environmental matters; according to the agency, virtually all companies use attorneys at permit hearings.

By contrast, TACB estimates that of about 60 hearings held each year, 35 to 45 of them lacked any attorney representation for the public. Although TACB is charged with protecting the state s air quality, TACB attorneys are specifically responsible for representing the agency s position in contested case hearings. TACB does not represent public citizens in cases where the views or actions of the agency are not consistent with those of citizens.

For example, in a recent asphalt plant pre-issuance hearing, citizens argued for a more stringent agency review and health screening process. However, TACB s position must support existing policies, procedures, rules and laws. Citizens may find it difficult, without considerable resources or expertise, to identify weaknesses in these agency processes and present a case with the same level of cred ibility that a company s legal counsel can muster in opposing arguments.

In other cases involving complex governmental decisions with a serious potential impact on the public, Texas has provided for adequate representation and protection of the public through the use of public interest counsels. The purpose of such counsels is to provide the public with advocacy resources. 1 The public interest counsel helps make the legal system work for citizens groups fighting agencies and large industries. They have become surrogate representatives for all the citizens who share the consumer interest . . . 2

In Texas and other states, Public Utility Counsels (PUCs) represent citizens who must pay utilities, while Public Insurance Counsels (PICs) represent the public to ensure that insurance rates set by the state are established in a fair manner. Both the PIC and the PUC in Texas are independent offices with their own budgets. The insurance counsel is funded through assessments on insurance companies, while the utility counsel is funded by gross receipts taxes on utility companies.

The Texas Water Commission (TWC) also provides an Office of Public Interest Counsel to represent the public and participate in proceedings before the agency. The public counsel is employed by the agency and reports to the commissioner. The counsel s purpose is to ensure that the commission promotes the public s interest and is responsive to environmental and citizens concerns including environmental quality and consumer protection. 3 TWC s public interest counsel attempts to participate in all contested cases, provides witnesses in cases on behalf of the public, tracks hearings, helps the public understand the process and responds to citizens telephone calls.

In 1993, when TACB and TWC are consolidated into the new Texas Natural Resource Conservation Commission (TNRCC), the public counsel also will represent the public on all air pollution-related cases. TWC s public counsel already has taken on landfill cases as part of the solid waste-related functions that have been transferred from the Texas Department of Health (TDH). Because all TACB hearings will be part of the public counsel s workload in 1993, TPR analyzed the process of public representation to determine if the counsel could adequately assume these responsibilities.

TWC s Office of Public Interest Counsel is currently staffed by the Counsel and two other attorneys, as well as an administrative technician. The counsel s budget was $211,000 for fiscal 1992, a figure that i ncludes salaries, travel and other expenses. Because of its workload, the counsel s office has used volunteer attorneys and paralegals to assist with cases. The counsel also is at liberty to use any in-house expertise to help resolve water issues. Current resources do not permit the counsel to attend all hearings.

TPR identified several concerns related to the TWC s Office of Public Interest Counsel. First, the counsel is employed by and answerable to the commissioner. To properly represent the public, the counsel should have no personal connections or interests with any party to the dispute except the public. The counsel should have no pecuniary interest that could be affected by the proceeding s outcome. The current situation, in which the counsel is paid by one of the parties to hearings held in the agency, could result in a conflict of interest if the counsel must make arguments that are contrary to the agency s position.

Second, the counsel s budget is considered along with all of the other functions of the TWC (and, in 1993, TNRCC) a situation that does not provide for the most objective consideration of the counsel s needs. The counsel must calculate projected staffing and resource needs and submit this to budget staff and ultimately to the execu tive director and the commissioners. In determining what to include in a Legislative Appropriations Request (LAR), the director and commissioners must weigh all of the agency s needs against those of the counsel. In effect, the LAR must reflect overall agency needs and not necessarily the needs of the counsel. In contrast, when the Public Insurance Counsel prepares an LAR, the document reflects that counsel s projections on the actual needs of the office.

Most experts suggest that, for any public advocacy or public interest law office to be effective, it must operate independently. An independent office can avoid the conflicting ethical interests springing from representing both the public and the agency.

These problems support the need for an independen t environmental public counsel. However, this need must be weighed against the costs of such an office. TPR has found models in state government for an entity that can be independent in its operations and budget matters, yet still avoid some of the costs of functioning as a separate agency.

The Interagency Council on Early Childhood Intervention (ECI), which is administratively attached to TDH, provides a model similar to the change recommended here. This council submits its own Legislative Appropriatio ns Request, but the council is able to receive certain services from the state agencies it serves. This arrangement eliminates the need for separate leasing contracts, accounting and purchasing staff and the purchase of equipment that would be necessary in a totally separate setting.


Recommendation
An independent Office of Environmental Public Interest Counsel should be established and administratively attached to Texas Natural Resource Conservation Commission (TNRCC).

The Public Interest Counsel would be appointed by the governor. The office would prepare its own legislative appropriations request and have authority over all of its budgetary expenditures.


Implications
This change will help to ensure that the public is explicitly represented in hearings before the TNRCC.


Fiscal Impact
Since current law already provides for a public interest counsel to represent the public in cases before TNRCC and requires that counsel be adequately funded, there should be no significant impact from the recommend ation. An office already exists within the Water Commission and additional staff to handle the cases can be housed with the commission. The major change in this recommendation is that the counsel be established as an independent entity, rather than reporti ng to the commission.

The office would derive its funding from fees paid by TNRCC-regulated entities. The public interest counsel office would estimate the number of cases and the cost of conducting activities for each of the regulated entities; funds wou ld be allocated accordingly. TACB could fund the portion of the program relating to air pollution control activities with fees paid by the companies it regulates. The office could enter into an interagency contract with TNRCC for lease space and administra tive support, when using the TNRCC s resources proves to be more cost-effective than conducting similar activities within the independent counsel s office.

Actual costs to operate the independent office cannot be estimated at this time. The office would need to submit an appropriations request based on an estimated number of cases expected.



Endnotes
1 David M. Trubek, Louise F, Trubek, Jonathan Becker, Innovations in the Legal Services Research on Service Delivery, Legal Services and the Administrative State: From Public Interest Law to Public Advocacy, vol. I, (Erhard Blankenburg, 1980), p. 143.
2 Ibid., p. 148.
3 State Water Administration, Subchapter G, Office of the Public Interest Counsel, 5.271, p. 11.