(1) For purposes of this section, unless the context otherwise requires, "permit" means a grant of authority by an agency that authorizes the holder of the permit to do some act not forbidden by law but not allowed to be performed without such authority. "Permit" does not include a professional license issued by a licensing board or an agency to conduct a profession or occupation. "Permit" does not include a registration or certification issued by a board or state agency to an individual to pursue a profession, practice, or occupation. "Permit" does not include a water well permit issued by the state engineer pursuant to title 37, C.R.S.

(2) (a) The rules and any written statements of agency interpretation of the statutes of an agency that are in effect on the date that a person applies for issuance or renewal of a permit govern the application process and any permit eligibility requirement. If the rules or any written statements of agency interpretation of the statutes governing the agency's permit process or the requirements to qualify for a permit have been amended, the agency shall process the application under the rules and any written statements of agency interpretation of the statutes in effect on the date of the application, unless the agency determines in writing that:

(I) (A) The new rules materially affect the health and safety of the public; and

(B) Use of the rules in effect on the date of application is likely to result in an unsafe situation if the applicant does not comply with the new rules; or

(II) New rules or new requirements are necessary to ensure that the agency and the permit will be in compliance with the requirements of federal law and federal regulations; or

(III) New rules or new requirements are necessary to ensure that the agency and the permit will not be in conflict with state statutes; or

(IV) New rules or new requirements are necessary to ensure that the agency and the permit will be in compliance with the requirements of a court order.

(b) If the agency determines that one of the exceptions to the requirements of paragraph (a) of this subsection (2) will occur if the applicant does not comply with the new rules or new requirements, the agency shall:

(I) Treat the application as pending;

(II) Provide a written notice to the applicant stating the reasons the application is incomplete; and

(III) Give the applicant a reasonable opportunity to comply with the new rules or new requirements.

(3) If an agency adopts or amends rules that govern or impact the application process or any permit eligibility requirements after a person has applied for a permit or renewal of a permit and while the application is pending with the agency, the person shall have the option to have the application processed under the rules in existence at the time of the filing of the application or under the new rules.