      TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                      NO. 03-12-00335-CV



  The Texas Commission on Environmental Quality and Waste Control Specialists, LLC,
                                   Appellants

                                                 v.

                                      Sierra Club, Appellee


     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
     NO. D-1-GN-09-000894, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING



                                          OPINION


               Appellants the Texas Commission on Environmental Quality (TCEQ) and

Waste Control Specialists, LLC (WCS) appeal from a district-court judgment that reversed a TCEQ

order granting WCS a low-level radioactive waste disposal license. Sierra Club sought judicial

review of TCEQ’s order on the grounds that TCEQ erred by issuing the license before WCS had

title to the relevant property interests and by denying Sierra Club’s contested-case hearing request.

The district court agreed with Sierra Club that it was error to deny the hearing request, reversed

TCEQ’s order on that ground, and remanded the case for a contested-case hearing on the merits of

WCS’s application. On appeal, TCEQ and WCS challenge the district court’s judgment, arguing

that (1) TCEQ properly denied Sierra Club’s hearing request, and (2) the district court should not

have allowed Sierra Club to supplement the administrative record. For the reasons explained below,

we reverse the district court’s judgment and render judgment affirming TCEQ’s order.
                                          BACKGROUND

               WCS is a waste-control company specializing in the treatment, storage, and

disposal of radioactive, hazardous, and mixed waste. WCS holds licenses to dispose of industrial

and hazardous waste and to process, store, and dispose of radioactive material at a 36-acre waste-

disposal facility in Andrews County, Texas. WCS’s disposal facility, which is situated within a

14,900-acre former ranch that extends into Lea County, New Mexico, is about 25 feet east of

the Texas–New Mexico border, five miles east of Eunice, New Mexico, and 30 miles west of

Andrews, Texas.1

               In August 2004, WCS filed an application with TCEQ for a license to construct and

operate two facilities on its ranch property for the near-surface land disposal of low-level radioactive

waste.2 See Tex. Health & Safety Code §§ 401.101 (requiring license for disposal of radioactive

waste), .201 (granting TCEQ authority over radioactive materials disposal licenses). The first of

       1
         This facility has been and is the subject of numerous lawsuits. See, e.g., Sierra Club
v. Texas Comm’n on Envtl. Quality, __ S.W.3d__, No. 03-11-000102-CV, 2014 WL 1349014
(Tex. App.—Austin Apr. 4, 2014, no pet. h.); In re Sierra Club, 420 S.W.3d 153, (Tex. App.—El
Paso Nov. 28, 2012, orig. proceeding); Sierra Club v. Andrews Cnty., 418 S.W.3d 711
(Tex. App.—El Paso 2013, pet. filed); Texas Comm’n on Envtl. Quality v. Sierra Club, No. 03-12-
00625-CV, 2014 WL 902513 (Tex. App.—Austin Mar. 7, 2014, no pet. h.); In re Sierra Club,
No. 03-12-00712-CV, 2012 WL 6554812 (Tex. App.—Austin Dec. 14, 2012, orig. proceeding,
mem. op.); In re Sierra Club, No. 08-12-00282-CV, 2012 WL 5949789 (Tex. App.—El Paso
Nov. 28, 2012, orig. proceeding, mem. op.).
       2
         Low-level radioactive waste is a broad category of waste defined by statute, see Tex. Health
& Safety Code § 401.004, but it can be described simply, albeit circularly, as all radioactive
wastes that are not classified as high-level radioactive wastes, including high-level wastes such
as “spent reactor fuel, wastes from reprocessed reactor fuel, uranium mine and mill tailings or
items contaminated with specified levels of transuranic elements,” H.R. Rep. No. 314, 99th Cong.,
1st Sess., pt. 2, at 15 (1985). Examples of low-level radioactive waste include medical clothing
and laboratory glassware. Office of Tech. Assessment, OTA-0-426, Partnership Under Pressure:
Managing Commercial Low-Level Radioactive Waste (1989); National Council on Radiation Prot.
and Measurements, NCRP Comm. No. 5, Review of the Publication, Living Without Landfills
(1989).

                                                   2
WCS’s proposed facilities will receive and dispose of commercially-generated waste from Texas and

Vermont as well as other waste approved for importation to Texas by the Texas Low Level

Radioactive Waste Disposal Compact Commission.3 The second proposed facility will receive and

dispose of low-level radioactive waste that is the responsibility of the federal government under the

federal Low Level Radioactive Waste Policy Act and its amendments. See 42 U.S.C. § 2021b–j

(provisions of federal act); see also Tex. Health & Safety Code §§ 401.2005(4) (defining “federal

facility waste”), .216 (granting TCEQ authority to license federal-facility waste disposal).

               After declaring WCS’s application administratively complete in February 2005,

TCEQ began its technical review of the application, including preparation of a written analysis of the

facilities’ effect on the environment. See Tex. Health & Safety Code §§ 401.113 (requiring TCEQ

to conduct environmental analysis), .231 (elements of administratively complete application), .237

(requiring technical review). TCEQ retained the University of Texas Bureau of Economic Geology

and Texas A&M University’s Department of Nuclear Engineering to assist with the environmental

analysis. During the review, which took place over three years, TCEQ notified WCS of numerous

problems and deficiencies with the application, and WCS addressed the deficiencies in various




       3
          The federal Low Level Radioactive Waste Policy Act, as amended in 1985, see 42 U.S.C.
§§ 2021b–2021j, requires each state to provide for the disposal of low-level radioactive waste
generated within its borders, see id. § 2021c. That same legislation encourages states to enter into
agreements with other states to establish low-level radioactive waste disposal sites. See id. § 2021d.
The Texas-Vermont Compact, as its name suggests, is an agreement between Texas and Vermont
that requires Texas to develop, operate, and maintain, for compensation, a facility for the disposal
of Texas and Vermont wastes. See Texas Low-Level Radioactive Waste Disposal Compact Consent
Act, Pub. L. No. 105-236, 112 Stat. 1542, 1542–43 (codified at 42 U.S.C. § 2021d (2006)) (text of
agreement); Tex. Health & Safety Code §§ 403.001–.006 (“Texas Low-Level Radioactive Waste
Disposal Compact”). The Texas Low Level Radioactive Waste Disposal Compact Commission was
created by and is responsible for administering the provisions of the Texas-Vermont Compact. See
Tex. Health & Safety Code §§ 403.005 (powers and duties of commission), .006 (text of compact).

                                                  3
supplements to its original license application. TCEQ’s draft environmental analysis, which was

completed in August 2008, included the following required information:


       (1)     an assessment of radiological and nonradiological effects of the activity on
               the public health;

       (2)     an assessment of any effect on a waterway or groundwater resulting from the
               activity;

       (3)     consideration of alternatives to the activities to be conducted under the
               license; and

       (4)     consideration of the long-term effects associated with activities, including
               decommissioning, decontamination, and reclamation impacts, including the
               management of low-level radioactive waste, to be conducted under the
               license.


Id. § 401.113(c). The environmental analysis concluded that WCS’s proposed facility was “adequate

to protect the public health and safety in that [it] provides reasonable assurance that the general

population will be protected from releases of radioactivity” as required by TCEQ regulations. See

30 Tex. Admin. Code §§ 336.1–.1317 (Radioactive Substances Rules).4

               Based on the technical review of WCS’s application, TCEQ’s Executive Director

concluded that WCS’s final application met the relevant statutory and regulatory requirements. He

then prepared a draft license that generally required WCS to construct and operate the landfill as

described in its final application, but which also included additional license terms to address

concerns raised during the technical review and environmental analysis. For example, to address

potential groundwater intrusion, the draft license included a provision changing the boundary and




       4
        All references to Title 30 of the Texas Administrative Code are to rules promulgated
by TCEQ.

                                                4
raising the facility floor of one landfill to maintain an appropriate buffer zone of unsaturated soil.

The draft license also included a prohibition against receiving waste by rail because the application

did not address the management of waste at railcar facilities. As a final example of modifications,

the draft license required additional environmental monitoring and studies to confirm that site

characteristics used in the models accurately depicted actual conditions.

               In August 2008, the Executive Director published the draft license and the draft

environmental analysis for public notice. See Tex. Health & Safety Code § 401.114. During the

public-comment period, Sierra Club timely submitted written comments opposing the license,

arguing that WCS’s application was incomplete and emphasizing its contention that the draft

environmental analysis raised technical questions concerning the application. Sierra Club also

requested a contested-case hearing on the merits of WCS’s application, identifying two of its

members, Rose Gardner and Fletcher Williams of Eunice, New Mexico, as members who had

standing to request a hearing in their own right because they lived and owned businesses, used

highways, and used natural resources in the vicinity of the proposed facility.5 See id. § 401.239(a)

(giving “affected person” right to contested-case hearing); 30 Tex. Admin. Code §§ 55.251–.256

(allowing “affected person” to request hearing and setting forth factors to determine affected-person

status). Both TCEQ’s Executive Director and WCS recommended that Sierra Club’s hearing request

be denied, arguing that neither Gardner nor Williams had standing to request a contested-case

hearing because neither qualified as an “affected person” under relevant statutes and TCEQ




       5
         Gardner and Williams are the same members Sierra Club relied on in connection with the
contested-case hearing request at issue in Sierra Club, 2014 WL 1349014, at *8 (affirming denial
of hearing request in by-product licensing matter at same disposal site).

                                                  5
regulations. The Office of Public Interest Counsel6 encouraged the commission to grant the hearing

requests because, in its opinion, Sierra Club’s request met the requirements for associational

standing.

                TCEQ’s commissioners evaluated Sierra Club’s hearing request and WCS’s license

application at a January 2009 hearing. After reviewing Sierra Club’s request, the responses to that

request, Sierra Club’s reply, WCS’s sworn application, the Executive Director’s technical review,

including the environmental analysis, and other information before the commission, two of the

three commissioners voted to deny Sierra Club’s hearing request and to issue the license to WCS.7

                After exhausting its administrative remedies, Sierra Club filed the underlying suit for

judicial review of TCEQ’s order in Travis County District Court, seeking to—


        •       reverse TCEQ’s decision to grant the license and render a decision that
                TCEQ exceeded its statutory authority in considering the application before
                WCS acquired all property interests;

        •       reverse TCEQ’s decision to deny Sierra Club’s hearing request and remand
                for reconsideration of that decision or for an evidentiary hearing regarding the
                hearing request; or




       6
          The primary duty of the Office of Public Interest Counsel is “to represent the public interest
as a party to matters before the [TCEQ].” Tex. Water Code § 5.271.
       7
           At the hearing, the third commissioner asked TCEQ’s general counsel whether WCS had
met the Texas Radiation Control Act’s (TRCA) property-acquisition requirements. See Tex. Health
& Safety Code § 401.204. When TCEQ’s general counsel responded that WCS had not yet acquired
all the property, the third commissioner announced he would not participate in the deliberation of
WCS’s application based on his “belief that section 401.204 precludes” consideration of the license
until all property interests are acquired. TCEQ’s order granting the license was predicated “upon
a demonstration by [WCS] that [WCS] has acquired free and clear title to and all interests in land
and buildings, including the surface and mineral estates, of the proposed disposal sites.”

                                                   6
       •         reverse TCEQ’s decision to grant the license and remand for a denial of the
                 application or for a contested-case hearing on the merits of the application.8


See Tex. Health & Safety Code § 401.240(a) (allowing “person affected by an action of the

commission” to file suit for judicial review of that action). Sierra Club argued in its petition to the

district court that TCEQ erred by considering WCS’s application before WCS had acquired total

ownership of the mineral rights underlying the disposal site and also by denying Sierra Club’s

request for a contested-case hearing. WCS and TCEQ filed pleas to the jurisdiction and special

exceptions that were later denied. And in response to a motion by Sierra Club to supplement the

administrative record, which was denied in part and granted in part, the district court admitted into

evidence two internal TCEQ memos related to a different licensing matter and an affidavit from a

separate case.

                 After a bench trial on the merits, the district court issued a final order “find[ing] that

the TCEQ erred in denying Sierra Club’s Hearing Request regarding WCS’s Application,” reversing

TCEQ’s January 20, 2009 order, and remanding the matter to TCEQ “to allow Sierra Club to

participate in a contested case hearing.” The order denied all other requested relief. It is from this

final order that TCEQ and WCS now appeal.


                                             DISCUSSION

                 In two issues, TCEQ and WCS (1) defend the propriety of TCEQ’s decision to deny

Sierra Club’s hearing request and (2) challenge the district court’s decision to allow Sierra Club to

supplement the administrative record.


       8
         Sierra Club filed two separate petitions for judicial review of TCEQ’s order. These suits
were ultimately consolidated in the underlying suit.

                                                     7
Sierra Club’s Request for a Contested-Case Hearing

                In their first issue, TCEQ and WCS assert that the denial of Sierra Club’s hearing

request was proper because the two members that Sierra Club relied on as “affected persons” in

support of its request are not affected persons under the relevant statutes and regulations. See id.

§ 401.003(15) (defining “affected person”); 30 Tex. Admin. Code § 55.256 (affected-person factors).

Sierra Club, relying on our decision in City of Waco v. Texas Commission on Environmental Quality,

347 S.W.3d 366 (Tex. App.—Austin 2012), reversed by 413 S.W.3d 409 (Tex. 2013), maintains that

TCEQ’s denial of Sierra Club’s hearing request was arbitrary and capricious because Sierra Club

alleged sufficient facts in its request to satisfy the hearing-request requirements.9


        Standard of review

                Sierra Club argues that TCEQ’s decision to deny its hearing request was arbitrary and

capricious given that the request alleged facts sufficient to satisfy the hearing-request requirements.

See id. But, in addition to the fact that the supreme court has recently rejected this standard for

contested-case hearing requests under the Water Code, see City of Waco, 413 S.W.3d at 410

(applying abuse of discretion standard), the TRCA provisions specific to the disposal license sought

here—i.e., for low-level radioactive wastes—mandate that we review TCEQ’s decision under

the “substantial evidence” standard. See Tex. Health & Safety Code § 401.240(a). This standard


        9
           Sierra Club also asserts on appeal that the conditional nature of TCEQ’s order—i.e., that
it would not be granted until WCS acquired all necessary title to property—supports affirming the
district court’s order. Although Sierra Club raised this issue at the district court, the district court’s
judgment denied “all other relief not expressly granted.” Thus, resolution of this issue in Sierra
Club’s favor would require altering the district court’s judgment. However, Sierra Club did not
file a notice of appeal. Accordingly, we lack jurisdiction to consider this issue. See Texas Bd.
of Chiropractic Exam’rs. v. Texas Med. Ass’n, 375 S.W.3d 464, 492 (Tex. App.—Austin 2012,
pet. denied) (holding that party seeking to alter trial court’s judgment must file notice of appeal).

                                                    8
requires that we reverse or remand a case for further proceedings only “if substantial rights of

the petitioner have been prejudiced because the administrative findings, inferences, conclusions,

or decisions”—


       (A)     are in violation of a constitutional or statutory provision;
       (B)     are in excess of the commission’s statutory authority;
       (C)     are made through unlawful procedure;
       (D)     are affected by other error of law;
       (E)     are not reasonably supported by substantial evidence considering the reliable
               and probative evidence in the record as a whole; or
       (F)     are arbitrary or capricious or characterized by abuse of discretion or clearly
               unwarranted exercise of discretion.


Id. § 401.240(b)(2). Essentially, this standard of review is a rational-basis test to determine, as a

matter of law, whether an agency’s order finds reasonable support in the record. See Texas Health

Facilities Comm’n v. Charter Med.-Dallas, Inc., 665 S.W.2d 446, 452–53 (Tex. 1984). “The true

test is not whether the agency reached the correct conclusion, but whether some reasonable basis

exists in the record for the action taken by the agency.” Id. at 452. We apply this analysis without

deference to the district court’s judgment. County of Reeves v. Texas Comm’n on Envtl. Quality,

266 S.W.3d 516, 528 (Tex. App.—Austin 2008, no pet.) (citing Texas Dep’t of Pub. Safety v. Alford,

209 S.W.3d 101, 103 (Tex. 2006)). We must sustain the agency’s action if the evidence is such that

reasonable minds could have reached the conclusion that the agency must have reached in order

to justify its action. Charter Med.-Dallas, 665 S.W.2d at 453 (citing Suburban Util. Corp. v. Public

Util. Comm’n, 652 S.W.2d 358, 364 (Tex. 1976)). Subsection E, which has been described as

the “crux” of the substantial-evidence review, see Granek v. Texas State Bd. of Med. Exam’rs,

172 S.W.3d 761, 778 (Tex. App.—Austin 2005, no pet.) (citing John E. Powers, Agency

Adjudications 163 (1990)), is highly deferential to the agency’s determination: “substantial

                                                 9
evidence” in this sense “does not mean a large or considerable amount of evidence”—in fact, the

evidence may even preponderate against the agency’s finding—but requires only “such relevant

evidence as a reasonable mind might accept as adequate to support a [finding] of fact.” Slay v. Texas

Comm’n on Envtl. Quality, 351 S.W.3d 532, 549 (Tex. App.—Austin 2011, pet. denied). Likewise,

we “may not substitute [our] judgment for the judgment of the state agency on the weight of the

evidence on questions committed to agency discretion.” Tex. Health & Safety Code § 401.240(b).


        Contested-case hearing requests

                Under TRCA, TCEQ must hold a contested-case hearing on the merits of an

application for a low-level radioactive waste disposal license if a “person affected” requests such a

hearing. See id. § 401.229(a). Likewise, TCEQ’s enabling statute forbids it from granting a hearing

request in a matter under its jurisdiction unless it determines that the request was filed by an affected

person. See Tex. Water Code § 5.556. Thus the critical, or threshold, inquiry in contested-case

hearing requests—and importantly the focus of the parties to this appeal—is whether the person

requesting the hearing is an “affected person.” See City of Waco, 413 S.W.3d at 417. That question,

in turn, is principally controlled by the affected-person factors created by TCEQ:


        (a)     For any application, an affected person is one who has a personal justiciable
                interest related to a legal right, duty, privilege, power, or economic interest
                affected by the application. An interest common to members of the general
                public does not qualify as a personal justiciable interest.

        ...

        (c)     All relevant factors shall be considered, including, but not limited to, the
                following:

                (1)     whether the interest claimed is one protected by the law under which
                        the application will be considered;


                                                   10
                (2)     distance restrictions or other limitations imposed by law on the
                        affected interest;
                (3)     whether a reasonable relationship exists between the interest claimed
                        and the activity regulated;
                (4)     likely impact of the regulated activity on the health, safety, and use of
                        property of the person;
                (5)     likely impact of the regulated activity on use of the impacted natural
                        resource by the person; and
                (6)     for governmental entities, their statutory authority over or
                        interest in the issues relevant to the application.


30 Tex. Admin. Code § 55.256 (“Determination of Affected Person”); see Tex. Water Code § 5.556

(directing TCEQ to adopt rules specifying factors that must be considered in determining affected-

person status); see also City of Waco, 413 S.W.3d at 416–17, 420 (discussing TCEQ-created factors).

If, upon consideration of these factors at a Commission meeting,10 the TCEQ commissioners

determine that the requestor is an affected person and otherwise meets the regulatory requirements

regarding contested-case hearings, the commissioners must grant the hearing request and refer the

application to the State Office of Administrative Hearings for a contested-case hearing. See 30 Tex.

Admin. Code § 55.255(a)(3) (Commission Action on Hearing Request). Conversely, if the TCEQ

commissioners determine that the requestor is not an affected person or that the hearing request

does not otherwise meet the regulatory requirements, the commissioners may, as they did here,

deny the hearing request and act on the permit application without a contested-case hearing, see id.

§ 55.255(a)(1), or instead schedule additional public hearings before acting on the application, see id.

§ 55.255(a)(2).




        10
          Upon receiving a hearing request, TCEQ’s executive director must schedule the hearing
request for consideration at a commission meeting and allow the executive director, public interest
counsel, and the permit applicant to file responses to the hearing request and the hearing requestor an
opportunity to reply. See 30 Tex. Admin. Code § 55.254(c)(2), (e)–(f) (Hearing Request Processing).

                                                   11
       TCEQ’s evaluation of Sierra Club’s hearing request

               As stated above, to withstand review under the substantial evidence standard, TCEQ’s

decision to deny Sierra Club’s hearing request must find support within the administrative record.

See Charter Med.-Dallas, 665 S.W.2d at 452–53. The administrative record the commission had

before it when it evaluated Sierra Club’s hearing request included Sierra Club’s hearing request,

WCS’s final application, the draft permit, the draft environmental analysis, public comments, the

Executive Director’s responses to comments and hearing requests, WCS’s and OPIC’s responses to

hearing requests, and Sierra Club’s reply to those responses. Therefore, we will review these items

and their contents to determine whether they support TCEQ’s decision.

               Sierra Club’s first purported “affected person” member, Rose Gardner, owns property

four miles west of the proposed facility, in Eunice, New Mexico, where she grows alfalfa and hay

and raises horses, cattle, goats, chickens, and a pig that feed on the alfalfa and hay. Sierra Club’s

hearing request alleged that Gardner’s health and property would potentially be affected by WCS’s

facility in the following ways:


•      Negative publicity associated with the radioactive disposal facility will cause economic
       damage to her two businesses, which rely on travelers from outside Eunice, New Mexico.

•      A traffic accident involving toxic or radioactive material destined for the WCS facility would
       “have the potential to impact her livelihood and health.”

•      Dispersal of radioactive material from the site to the west would “have the potential to
       impact her livelihood and health.”

•      Groundwater contamination from the facility might affect her health and livelihood because
       the well on her property is “potentially hydrologically connected to groundwater resources”
       in the vicinity of the site.




                                                 12
•       If depleted uranium from the uranium enrichment plant near her home town of Eunice,
        New Mexico is disposed of at the WCS facility, it would be transported on the same roads
        that Gardner uses.11

•       Although railcar transport is not allowed under the terms of the draft license, WCS might
        later seek to receive waste by rail and, if it does, any accidents involving transportation of
        radioactive waste by rail to the WCS facility would affect Gardner because she travels near
        the railroad that would be used.

•       Gardner lives in “the same hydrological basin as the WCS site.”

•       “High single-direction winds traveling westward from the site have the potential to materially
        harm” Gardner’s property, livelihood, and health if they disperse radioactive material
        from the site.

•       “The very limited financial assurances provided by” WCS would affect her if WCS were to
        “walk away without providing proper clean-up or closure of the facility.”12


Sierra Club’s request asserted similar adverse effects to its second member representative, Williams,

including that she travels along the highways that will be used to transport the radioactive waste, that

her home is near a railroad line that would be used to transport radioactive material if that mode of

transport is ever allowed, that she uses groundwater in the vicinity of the disposal site, and that she

would be exposed to radiation by westerly high winds common in the area.

                WCS’s application and the draft permit, generally stated, provide that the low-level

radioactive waste designated for disposal at the WCS site will arrive at the facility in secure packages

or containers in compliance with applicable state and federal laws. The waste disposed of in the

Texas–Vermont Compact waste facility will be encased in carbon-steel reinforced concrete canisters

placed in an engineered below-ground disposal unit. The waste for the federal-waste facility will

       11
           WCS emphasizes that disposal of materials from the uranium enrichment plant near
Eunice is not authorized under the proposed license.
       12
           Most of these alleged adverse affects were also offered (and addressed) in the case
discussed supra note 5.

                                                  13
be placed in concrete canisters or in compacted one-foot layers of waste in engineered disposal units

that are placed below ground. The liner systems underneath each facility will include reinforced

concrete barriers, drainage systems, and a compacted clay liner, with sensors placed under the liners

to verify that they are working. The liner for the federal-waste facility will also have a double-layer

flexible membrane liner with leak-detection monitoring and leachate-collection systems. The top

of all waste at both facilities will be at least five meters below the surface. The top cover for both

facilities will consist of a multilayer design of between 25 and 40 feet of composite-cover system

with a reinforced concrete barrier, compacted red-bed clay, synthetic membranes, and water drainage

and leak detection systems to prevent horizontal or vertical migration of moisture from the facilities.

               Regarding surface and groundwater in the vicinity of the proposed facilities, WCS’s

application shows that the surface water flows not west toward where Gardner and Williams

are located, but rather away from them toward the southwest, and that the groundwater in the

area likewise flows south/southwest or downgradient of Gardner and Williams. WCS’s plan also

includes installation of a berm on the uphill side of the landfill and a channel to divert rainwater

runoff around the three landfills. According to the application, rain falling within the landfill area

will be collected in a bermed area large enough to retain the rainfall from a 100-year, 24-hour storm

event. Rain falling in an active cell of the landfill will be captured and removed by the leachate-

collection system. WCS’s plans also require monitoring of area surface water and installation of

groundwater-monitoring wells around the site at differing elevations to provide early detection of

any subsurface release of contaminants.

               Regarding climate and meteorology, the data in WCS’s application indicates that

the prevailing winds at the site come from a southerly direction, while winds blow from east to



                                                  14
west—i.e., toward Gardner and Williams—only about six percent of the time. Further, neither

facility will be allowed to conduct waste operations during windy conditions, and WCS will monitor

air particulates.

                WCS’s application also included a performance assessment it had conducted to

analyze the potential radiation exposure to workers and the general public during operations and for

a thousand years after the facility closes. For the operational period, the performance assessment

models the radiological effects of both normal operations and unexpected failures of protective

aspects of the design, such as a breach of the liner system or an explosion of a waste container. It

examined various pathways for potential releases, including groundwater and dispersal by

high winds. According to WCS’s assessment, the radiological impact of normal operations on the

hypothetical “near resident” was predicted to be less than .0004 percent of the allowable standard

of 25 millirems per year, and the impact from worst-case scenarios—i.e., severe winds and tornadic

conditions—was less than .002 percent of the allowable standard.13 For the post-closure period,

WCS modeled the impact on a hypothetical resident living adjacent to the landfill who uses

groundwater for drinking and livestock watering, and also the impact on an hypothetical “intruder-

resident”—i.e., trespasser—living directly above the disposal unit and using water from a well




        13
            See, e.g., 10 C.F.R. § 61.41 (Nuclear Regulatory Comm’n, Protection of the general
population from releases of radioactivity) (“Concentrations of radioactive material which may be
released to the general environment . . . shall not result in an annual dose above background
exceeding an equivalent of 25 millirems to the whole body, 75 millirems to the thyroid, or
25 millirems to any other organ of any member of the public.”); 30 Tex. Admin. Code § 336.724
(Protection of the General Population from Releases of Radioactivity) (same). According to at
least one study, the average American absorbs approximately 300 millirems per year of
natural background radiation—i.e., radiation from nature. Health Physics Soc’y, Radiation Risk in
Perspective, Position Statement of the Health Physics Soc’y (Aug. 2004) at 1 (available at
http://hps.org/documents/radiationrisk.pdf).

                                                15
drilled directly through the waste for drinking and livestock watering. The long-term estimates

assumed that all engineered systems, such as the liner system, would fail. WCS’s modeling

predicted an exposure of 3.4 millirems per year for the hypothetical post-closure resident living

adjacent to the facility and 4.6 millirems per year for the intruder resident—both significantly lower

than the allowable 25 millirems per year.

               TCEQ’s environmental analysis of WCS’s proposed facility, which again is

required by statute, consists of a “written analysis of the effect on the environment of a proposed

licensed activity that the commission determines has a significant effect on the human environment.”

Tex. Health & Safety Code § 401.113(a). It is organized by subject area, analyzing the license

application materials WCS submitted and the related technical analysis of those materials. It

discusses the review and analysis of technical issues in several critical areas and includes:


       (1)     an assessment of radiological and nonradiological effects of the activity on
               the public health;
       (2)     an assessment of any effect on a waterway or groundwater resulting from the
               activity;
       (3)     consideration of alternatives to the activities to be conducted under the
               license; and
       (4)     consideration of the long-term effects associated with activities, including
               decommissioning, decontamination, and reclamation impacts, including the
               management of low-level radioactive waste, to be conducted under the
               license.


Id. § 401.113(c). Stated very generally, the nearly 400-page environmental analysis of WCS’s

license operation offers detailed analysis of the application, conclusions regarding whether the

proposed facility meets statutory and regulatory requirements, and suggested modifications to the

license to achieve compliance with certain regulations.




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               The Executive Director’s responses to comments and hearing requests, which

relied on information from the environmental analysis, the draft permit, and WCS’s application,

recommended that Sierra Club’s hearing request be denied because neither Gardner nor Williams

is a “person affected” or “affected person” under the TCEQ rules for evaluating hearing requests.

The Executive Director’s response instead concludes that Gardner’s and Williams’s concerns

are common to the general public and that Sierra Club failed to show there was “even a plausible

risk [Gardner or Williams] would be adversely affected by the regulated activity” because they

are “upstream, upgradient, and upwind” from the facility. Regarding the specific affected-person

factors that TCEQ must consider in evaluating hearing requests, the Executive Director’s response

concluded that most weighed against finding that either Gardner or Williams was an affected person.

The Executive Director’s conclusions can be summarized generally as follows:


•      Section 55.256(c)(1)—Gardner’s and Williams’s “concerns about groundwater and
       airborne contamination and financial assurance are addressed by the laws under which the
       application will be considered.” “Although concerns about negative publicity, transportation
       requirements, and the licensing of a nuclear power plant are not addressed by the laws under
       which the WCS application is reviewed,” TCEQ does not regulate the transportation of
       radioactive materials or the use of roadways in Texas or New Mexico. Transportation of
       radioactive materials must comply with all applicable state and federal laws and regulations.
       Further, the draft license prohibits receipt of radioactive material by rail.

•      Section 55.256(c)(2)—“[T]here are no established distance restrictions or other limitations
       imposed by law on an affected interest.” Further, Gardner and Williams live and own
       property more than three miles from the proposed facility.

•      Section 55.256(c)(3)—“There is a reasonable relationship between the concern
       about groundwater and airborne contamination as well as the amount of required
       financial assurance and the regulation of low-level radioactive waste disposal. However,
       these concerns are common to all and were addressed in the review of the application and are
       reflected in the various conditions of the draft license.” The draft license requires financial
       assurance in amounts approved by the Executive Director based on TCEQ rules. Neither
       Gardner nor Williams is party to any financial assurance requirements and would not be
       liable for any shortfall.

                                                 17
•      Section 55.256(c)(4)—“There is no likely impact of the regulated activity on [Gardner’s or
       Williams’s] health, safety and use of property.” There is no likely impact from groundwater
       contamination because the application provided adequate information on the characterization
       of the geology and hydrology of the proposed site and design. The proposed design calls for
       excavation below certain relevant formations, and other relevant formations “are not likely
       conduits of potential contamination from the proposed disposal facilities to groundwater in
       Eunice” because of separation and direction of groundwater flow. Recommended revisions
       to draft license regarding buffer zones provided “additional protection of public health and
       safety and the environment.”

•      Regarding windborne migration and contamination concerns, the application shows
       prevailing winds primarily from the south, whereas Gardner and Williams are both due west
       of the proposed facility. Further, the application’s modeling shows that exposure will be
       well below required limits. Finally, the Executive Director recommended revisions to the
       draft license to require a particulate emission study to address high-wind events and
       additional analysis of emissions controls during average and high-wind events.

•      Section 55.256(c)(5)—“[T]here is no likely impact of the regulated activity on [Gardner’s
       or Williams’s] use of groundwater resources.” The likelihood of groundwater contamination
       and migration of contaminates into a well used by Gardner or Williams is remote given
       the location of the regional aquifers, groundwater flow and gradients within the regional
       aquifers, and the design of the facility as required by the draft permit.


       “Substantial-evidence” analysis

               We agree with TCEQ and WCS that the above-described information contained in

the administrative record and available to the commissioners—i.e., the Executive Director’s response

and recommendation, the information contained in its response, the environmental analysis, the draft

permit, and WCS’s application, among others—provides a reasonable basis for TCEQ’s decision to

deny Sierra Club’s hearing request. See Charter-Med., 665 S.W.2d at 452 (noting it “is not whether

the agency reached the correct conclusion, but whether some reasonable basis exists in the record

for the action taken by the agency”). First, there is evidence in the record that WCS’s application

met the statutory requirements for a low-level radioactive waste disposal license and that the

operation of the facility within the parameters of the draft license is not likely to contaminate the



                                                 18
groundwater, soils, surface water, or air in the vicinity of the disposal site, at least not in dosage

amounts that are prohibited under applicable federal and state laws and regulations. Relatedly, the

administrative record shows that even in the event of safeguard failures, the facility is not likely to

cause contamination that exceeds federal and state laws and regulations. Further, the evidence in

the record shows that Gardner and Williams live, work, and travel in an area that is upwind,

upgradient, and upstream of the facility. As such, it would have been reasonable for TCEQ to

conclude that the proposed facility and its related activities will have minimal impact on Gardner’s

and Williams’s health, safety, use of property, and use of natural resources. See 30 Tex. Admin.

Code § 55.256(c)(4)–(5) (requiring TCEQ to consider likely impact of regulated activity). The

information before the commission also supports a conclusion that Gardner’s and Williams’s stated

concerns over possible traffic and railway accidents were not reasonably related to the regulated

activity as TCEQ has no jurisdiction over the transportation of radioactive materials and the permit

does not allow for receipt of materials by railcar. See id. § 55.256(c)(3). Relatedly, Gardner’s

concern regarding the possible effects of negative publicity on her business is not an interest

protected by the TRCA because that law addresses public health safety and the environment, not

public relations. See id. § 55.256(c)(1).

               In sum, the administrative record provides a reasonable basis for TCEQ’s conclusion

that a majority of the affected-person factors weigh against Gardner and Williams. See Charter

Med., 665 S.W.2d at 452–53. Thus, by extension, it supports TCEQ’s conclusion that neither

Gardner nor Williams are affected persons. Therefore, TCEQ’s decision to deny Sierra Club’s

request was appropriate. See Tex. Water Code § 5.115 (TCEQ “may not grant a request for a

contested case hearing unless the commission determines that the request was filed by an affected



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person”). Further, and more relevant here, because TCEQ’s decision to deny Sierra Club’s hearing

request is reasonably supported by the record, it was error for the district court to reverse

that decision. See Tex. Health & Safety Code § 401.240(b); Charter Med., 665 S.W.2d at 452–53.

Accordingly, we sustain TCEQ’s and WCS’s first issue on appeal.


Supplemental Evidence

               Having sustained appellants’ first issue on appeal, we need not address their

second issue challenging the district court’s decision to supplement the administrative record with

internal TCEQ memos regarding another type of disposal license and with a third-party affidavit

from another case. See Tex. R. App. P. 47.1 (requiring opinion be “as brief as practicable but . . .

address[ing] every issue raised and necessary to final disposition”).


                                         CONCLUSION

               Having determined that TCEQ’s decision to deny Sierra Club’s request for a

contested-case hearing is supported by the administrative record, we reverse the district court’s

judgment and render judgment affirming TCEQ’s decision to deny the hearing request. See

Tex. Health & Safety Code § 401.240(b).




                                              ___________________________________________
                                              Jeff Rose, Justice

Before Justices Puryear, Pemberton, and Rose

Reversed and Rendered

Filed: April 18, 2014

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