1. (a) The executive director shall deny an application submitted under Section 361.804 if:

   1. (1) any of the eligibility criteria described in Section 361.803 have not been met for the property for which the municipal setting designation is sought;
   2. (2) the application is incomplete or inaccurate; or
   3. (3) after the 60-day comment period described by Section 361.805(e), the executive director determines that the municipal setting designation would negatively impact the current and future regional water resource needs or obligations of a municipality, a retail public utility, or a private well owner described by Section 361.805(a).
2. (b) If the executive director determines that an application is incomplete or inaccurate, the executive director, not later than the 90th day after receipt of the application, shall provide the applicant with a list of all information needed to make the application complete or accurate.

3. (c) If the executive director denies the application, the executive director shall:

   1. (1) notify the applicant that the application has been denied; and
   2. (2) explain the reasons for the denial of the application.

Acts 2003, 78th Leg., ch. 731, Sec. 1, eff. Sept. 1, 2003.