78R893 KEG-D
By: Shapleigh S.B. No. 1147
A BILL TO BE ENTITLED
AN ACT
relating to the functions of the State Office of Administrative
Hearings, including hearings functions transferred to the office
from the Texas Department of Licensing and Regulation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 552, Government Code, is
amended by adding Section 552.141 to read as follows:
Sec. 552.141. EXCEPTION: WORKING PAPERS OF ADMINISTRATIVE
LAW JUDGES AT STATE OFFICE OF ADMINISTRATIVE HEARINGS. The
following working papers of an administrative law judge at the
State Office of Administrative Hearings are excepted from the
requirements of Section 552.021:
(1) notes recording the observations, thoughts, or
impressions of an administrative law judge;
(2) drafts of a proposal for decision;
(3) drafts of orders made in connection with
conducting contested case hearings; and
(4) drafts of orders made in connection with
conducting alternative dispute resolution procedures.
SECTION 2. Section 2003.021, Government Code, is amended by
adding Subsection (g) to read as follows:
(g) The office shall conduct all hearings in contested cases
under Chapter 2001 that are before the Texas Department of
Licensing and Regulation under Chapter 51, Occupations Code.
SECTION 3. Section 2003.022, Government Code, is amended by
adding Subsection (e) to read as follows:
(e) The appointment of the chief administrative law judge
shall be made without regard to the race, color, disability, sex,
religion, age, or national origin of the appointee.
SECTION 4. Subchapter B, Chapter 2003, Government Code, is
amended by adding Section 2003.0221 to read as follows:
Sec. 2003.0221. REMOVAL OF CHIEF ADMINISTRATIVE LAW JUDGE.
It is a ground for removal from the position of chief administrative
law judge that an appointee:
(1) does not have at the time of taking office the
qualifications required by Section 2003.022(b);
(2) does not maintain during service as chief
administrative law judge a license to practice law in this state;
(3) is ineligible to hold the position under Section
2003.0225;
(4) cannot, because of illness or disability,
discharge the appointee's duties for a substantial part of the
appointee's term; or
(5) engages in the practice of law in violation of
Section 2003.022(c).
SECTION 5. Subchapter B, Chapter 2003, Government Code, is
amended by adding Sections 2003.0225 and 2003.0226 to read as
follows:
Sec. 2003.0225. CONFLICT OF INTEREST. (a) In this section,
"Texas trade association" means a cooperative and voluntarily
joined statewide association of business or professional
competitors in this state designed to assist its members and its
industry or profession in dealing with mutual business or
professional problems and in promoting their common interest.
(b) A person may not hold the position of chief
administrative law judge and may not be employed by the office in a
"bona fide executive, administrative, or professional capacity,"
as that phrase is used for purposes of establishing an exemption to
the overtime provisions of the federal Fair Labor Standards Act of
1938 (29 U.S.C. Section 201 et seq.), and its subsequent
amendments, if:
(1) the person is an officer, employee, or paid
consultant of a Texas trade association in any field regulated by an
agency for which the office is required to conduct administrative
hearings; or
(2) the person's spouse is an officer, manager, or paid
consultant of a Texas trade association in any field regulated by an
agency for which the office is required to conduct administrative
hearings.
(c) A person may not hold the position of chief
administrative law judge or act as the general counsel to the chief
administrative law judge or the office if the person is required to
register as a lobbyist under Chapter 305 because of the person's
activities for compensation on behalf of a profession related to
the operation of the office, including a profession that is
licensed by an agency for which the office is required to conduct
administrative hearings.
Sec. 2003.0226. INFORMATION REGARDING REQUIREMENTS FOR
EMPLOYMENT AND STANDARDS OF CONDUCT. The chief administrative law
judge or the chief administrative law judge's designee shall
provide to office employees, as often as necessary, information
regarding the requirements for employment under this chapter,
including information regarding a person's responsibilities under
applicable laws relating to standards of conduct for state
employees.
SECTION 6. Section 2003.023, Government Code, is amended to
read as follows:
Sec. 2003.023. SUNSET PROVISION. The State Office of
Administrative Hearings is subject to review under Chapter 325
(Texas Sunset Act), but is not abolished under that chapter. The
office shall be reviewed during the periods in which state agencies
abolished in 2015 [2003] and every 12th year after 2015 [2003] are
reviewed.
SECTION 7. Section 2003.024, Government Code, is amended to
read as follows:
Sec. 2003.024. INTERAGENCY CONTRACTS; ANTICIPATED HOURLY
USAGE AND COST ESTIMATES. (a) If a state agency referred matters
to the office during any of the three most recent state fiscal years
for which complete information about the agency's hourly usage is
available and the costs to the office of conducting hearings and
alternative dispute resolution procedures for the [a] state agency
[that refers matters to the office] are not to be [otherwise] paid
by appropriations to the office during a state fiscal biennium, the
office and the agency shall enter into an interagency contract for
the biennium under which the referring agency pays the office, at
the start of each fiscal year of the biennium, a lump-sum amount to
cover the costs of conducting all hearings and procedures during
the fiscal year [a hearing or procedure]. The lump-sum amount
[costs] paid to the office under the contract must be based on:
(1) an hourly rate that is set by the office[. The
office shall set the hourly rate for a biennium] in time for the
rate to be reviewed by the legislature as part of the legislature's
review of the office's legislative appropriations request for the
biennium; and
(2) the anticipated hourly usage of the office's
services by the referring agency for each fiscal year of the
biennium, as estimated by the office under Subsection (a-1).
(a-1) Before the beginning of each state fiscal biennium,
the office shall estimate for each fiscal year of the biennium the
anticipated hourly usage for each state agency that referred
matters to the office during any of the three most recent state
fiscal years for which complete information about the agency's
hourly usage is available. The office shall estimate an agency's
anticipated hourly usage by evaluating:
(1) the number of hours spent by the office conducting
hearings or alternative dispute resolution procedures for the state
agency during the three most recent state fiscal years for which
complete information about the agency's hourly usage is available;
and
(2) any other relevant information, including
information provided to the office by the state agency, that
suggests an anticipated increase or decrease in the agency's hourly
usage of the office's services during the state fiscal biennium, as
compared to past usage.
(a-2) If a state agency did not refer matters to the office
during any of the three state fiscal years preceding a state fiscal
biennium for which complete information about the agency's hourly
usage would have been available and did not provide information to
the office sufficient for the office to reasonably and timely
estimate anticipated usage and enter into a contract with the
agency before the start of the state fiscal biennium, and the costs
to the office of conducting hearings and alternative dispute
resolution procedures for the state agency are not paid by
appropriations to the office for the state fiscal biennium, the
referring agency shall pay the office the costs of conducting
hearings or procedures for the agency based on the hourly rate that
is set by the office under Subsection (a) and on the agency's actual
usage of the office's services.
(b) If the costs to the office of conducting hearings and
alternative dispute resolution procedures for a state agency that
refers matters to the office are anticipated to be [otherwise] paid
by a lump-sum appropriation [appropriations] to the office for
[during] a state fiscal biennium, the office shall timely provide
to the legislature the information described by Subsection (c)
[office and the agency shall enter into an interagency contract for
each state fiscal year during the biennium under which the
referring agency pays the office the costs for the number of hours
spent by the office conducting hearings or alternative dispute
resolution procedures for the agency during the fiscal year that
exceeds by 10 percent or more the number of hours spent by the
office conducting hearings or alternative dispute resolution
procedures for the agency during the state fiscal year that ended
August 31, 1998. The costs paid under the contract must be based on
an hourly rate that is set by the office. The office shall set the
hourly rate for a biennium in time for the rate to be reviewed by the
legislature as part of the legislature's review of the office's
legislative appropriations request for the biennium].
(c) Each state fiscal biennium, the office as part of its
legislative appropriation request shall file:
(1) information, as estimated under Subsection (a-1),
related to the anticipated hourly usage of each state agency that
refers matters to the office for which the costs of hearings and
alternative dispute resolution procedures are anticipated to be
paid by appropriations to the office; and
(2) an estimate of its hourly costs in conducting each
type of hearing or dispute resolution procedure. The office shall
estimate the hourly cost based on the average cost per hour during
the preceding state fiscal year of:
(A) [(1)] the salaries of its administrative law
judges;
(B) [(2)] the travel expenses, hearing costs,
and telephone charges directly related to the conduct of a hearing
or procedure; and
(C) [(3)] the administrative costs of the
office, including docketing costs and the administrative costs of
the division of the office that conducts the hearing or procedure.
(d) This section does not apply to hearings conducted:
(1) by the natural resource conservation division or
the utility division; or
(2) under the administrative license revocation
program.
SECTION 8. Section 2003.050, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) Rules adopted by the chief administrative law judge
under this section shall specify procedures to permit a witness to
testify over the telephone at a hearing conducted by the office.
The rules must require the consent of all parties to the contested
case or other matter before a witness is permitted to testify over
the telephone and must include procedures for verification of the
identity of the witness by a third party.
SECTION 9. Subchapter C, Chapter 2003, Government Code, is
amended by adding Sections 2003.052, 2003.053, 2003.054, 2003.055,
and 2003.056 to read as follows:
Sec. 2003.052. HANDLING OF COMPLAINTS. (a) The office
shall maintain a file on each written complaint filed with the
office. The file must include:
(1) the name of the person who filed the complaint;
(2) the date the complaint is received by the office;
(3) the subject matter of the complaint;
(4) the name of each person contacted in relation to
the complaint;
(5) a summary of the results of the review or
investigation of the complaint; and
(6) an explanation of the reason the file was closed,
if the office closed the file without taking action other than to
investigate the complaint.
(b) The office shall provide to the person filing the
complaint and to each person who is a subject of the complaint a
copy of the office's policies and procedures relating to complaint
investigation and resolution.
(c) The office, at least quarterly until final disposition
of the complaint, shall notify the person filing the complaint and
each person who is a subject of the complaint of the status of the
investigation unless the notice would jeopardize an undercover
investigation.
Sec. 2003.053. EQUAL EMPLOYMENT OPPORTUNITY POLICY. (a)
The chief administrative law judge or the chief administrative law
judge's designee shall prepare and maintain a written policy
statement that implements a program of equal employment opportunity
to ensure that all personnel decisions are made without regard to
race, color, disability, sex, religion, age, or national origin.
(b) The policy statement must include:
(1) personnel policies, including policies relating
to recruitment, evaluation, selection, training, and promotion of
personnel, that show the intent of the office to avoid the unlawful
employment practices described by Chapter 21, Labor Code; and
(2) an analysis of the extent to which the composition
of the office's personnel is in accordance with state and federal
law and a description of reasonable methods to achieve compliance
with state and federal law.
(c) The policy statement must:
(1) be updated annually;
(2) be reviewed by the state Commission on Human
Rights for compliance with Subsection (b)(1); and
(3) be filed with the governor's office.
Sec. 2003.054. STATE EMPLOYEE INCENTIVE PROGRAM. The chief
administrative law judge or the chief administrative law judge's
designee shall provide to office employees information and training
on the benefits and methods of participation in the State Employee
Incentive Program.
Sec. 2003.055. EFFECTIVE USE OF TECHNOLOGY. The chief
administrative law judge shall develop and implement a policy
requiring the chief administrative law judge and office employees
to research and propose appropriate technological solutions to
improve the office's ability to perform its functions. The
technological solutions must:
(1) ensure that the public is able to easily find
information about the office on the Internet;
(2) ensure that persons who want to use the office's
services are able to:
(A) interact with the office through the
Internet; and
(B) access any service that can be provided
effectively through the Internet; and
(3) be cost-effective and developed through the
office's planning processes.
Sec. 2003.056. ALTERNATIVE DISPUTE RESOLUTION POLICY. The
chief administrative law judge shall develop and implement a policy
to encourage the use of alternative dispute resolution procedures
where appropriate to assist in the internal and external resolution
of disputes within the office's jurisdiction.
SECTION 10. Section 51.305, Occupations Code, is amended to
read as follows:
Sec. 51.305. HEARING ON RECOMMENDATIONS. (a) If the
respondent requests a hearing, the hearing shall be conducted by
the State Office of Administrative Hearings [department shall set a
hearing and give written notice of the hearing to the respondent].
(b) The State Office of Administrative Hearings shall
consider the department's applicable substantive rules and
policies when conducting a hearing under this subchapter [The
executive director may employ a hearings officer to conduct the
hearing].
(c) An administrative law judge at the State Office of
Administrative Hearings [The hearings officer] shall:
(1) make findings of fact and conclusions of law; and
(2) promptly issue to the commission a proposal for
decision as to the occurrence of the violation and the amount of any
proposed administrative penalty.
SECTION 11. Section 51.354(a), Occupations Code, is amended
to read as follows:
(a) A respondent is entitled to a hearing conducted by the
State Office of Administrative Hearings if the executive director
proposes to deny, suspend, or revoke a license.
SECTION 12. Section 1802.203, Occupations Code, is amended
to read as follows:
Sec. 1802.203. HEARING. [(a)] If the amount determined by
the department under Section 1802.202 is disputed by the auctioneer
or the aggrieved party, the department shall refer the matter to the
State Office of Administrative Hearings for a hearing on the
disputed claim [department's hearings examiner shall:
[(1) conduct a hearing on the claim in accordance with
department rules; and
[(2) determine the amount owed to the aggrieved
party].
[(b) A hearing on a claim may be conducted at the
department's Austin office or at another location as provided by
department rule.
[(c) After the hearing, the hearings examiner shall prepare
a proposal for decision for the commissioner.]
SECTION 13. Sections 51.354(b) and (c), Occupations Code,
are repealed.
SECTION 14. On September 1, 2003:
(1) all functions and activities performed by the
Texas Department of Licensing and Regulation that relate to
conducting administrative hearings at the department are
transferred to the State Office of Administrative Hearings;
(2) two full-time equivalent employee positions are
transferred from the Texas Department of Licensing and Regulation
to the State Office of Administrative Hearings to provide the
hearing services described in Sections 51.305, 51.354, and
1802.203, Occupations Code, as amended by this Act. When filling
the two full-time equivalent employee positions, the State Office
of Administrative Hearings shall give first consideration to an
applicant employed as a hearings examiner or administrative
technician at the Texas Department of Licensing and Regulation;
(3) all property, including records, in the custody of
the Texas Department of Licensing and Regulation related to
providing administrative hearings under the former Sections
51.305, 51.354, and 1802.203, Occupations Code, becomes the
property of the State Office of Administrative Hearings, but stays
in the same physical location unless moved in accordance with the
plan created under Section 15 of this Act; and
(4) all funds appropriated by the legislature to the
Texas Department of Licensing and Regulation for purposes relating
to conducting administrative hearings under the former Sections
51.305, 51.354, and 1802.203, Occupations Code, are transferred to
the State Office of Administrative Hearings.
SECTION 15. The Texas Department of Licensing and
Regulation and the State Office of Administrative Hearings shall
establish a transition plan for the transfer described in Section
14 of this Act. The plan must include:
(1) a timetable for any necessary or advisable
movement of the physical location of property;
(2) an inventory of records and other property
required to be transferred; and
(3) a plan for continued support and cooperation the
Texas Department of Licensing and Regulation must provide the State
Office of Administrative Hearings to ensure an efficient transfer
of services and planning for future needs, including:
(A) an informational training session conducted
by the Texas Department of Licensing and Regulation for hearings
officers at the State Office of Administrative Hearings; and
(B) procedures for forwarding requests for
administrative hearings submitted to the Texas Department of
Licensing and Regulation to the State Office of Administrative
Hearings.
SECTION 16. (a) This Act takes effect September 1, 2003.
(b) The change in law made by this Act to Section 2003.024,
Government Code, applies only in relation to the state fiscal
biennium beginning September 1, 2005, and any subsequent state
fiscal biennium.