H.B. No. 2154
 
 
 
 
AN ACT
  relating to the functions and operation of the State Office of
  Administrative Hearings.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 2001.058, Government Code, is amended by
  adding Subsection (d-1) to read as follows:
         (d-1)  On making a finding that a party to a contested case
  has defaulted under the rules of the State Office of Administrative
  Hearings, the administrative law judge may dismiss the case from
  the docket of the State Office of Administrative Hearings and
  remand it to the referring agency for informal disposition under
  Section 2001.056. After the case is dismissed and remanded, the
  agency may informally dispose of the case by applying its own rules
  or the procedural rules of the State Office of Administrative
  Hearings relating to default proceedings. This subsection does not
  apply to a contested case in which the administrative law judge is
  authorized to render a final decision.
         SECTION 2.  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 2027 [2015] and every 12th year after 2027 [2015] are
  reviewed.
         SECTION 3.  Section 2003.024, Government Code, is amended by
  amending Subsections (a), (a-2), (c), and (d) and adding Subsection
  (a-3) to read as follows:
         (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 state agency are not to be 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
  either a lump-sum amount[,] at the start of each fiscal year of the
  biennium or a fixed amount at the start of each fiscal quarter of
  the biennium for all services provided to the agency[, a lump-sum
  amount to cover the costs of conducting all hearings and
  procedures] during the fiscal year. The office shall report to the
  Legislative Budget Board any agency that fails to make a timely
  payment under the contract. The lump-sum or quarterly amount paid
  to the office under the contract must be based on:
               (1)  an hourly rate that is set by the office:
                     (A)  in an amount that sufficiently covers the
  office's full costs in providing services to the agency, including
  costs for items listed in Subsection (c)(2); and
                     (B)  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, in
  determining the office's legislative appropriations 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-2)  The office, for a contract entered into as provided by
  Subsection (a) under which a quarterly amount is paid by the
  referring agency to the office, shall:
               (1)  track the agency's actual hourly usage of the
  office's services during each fiscal quarter; and
               (2)  forecast, after each fiscal quarter, the agency's
  anticipated hourly usage for the rest of the fiscal year.
         (a-3)  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.
         (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)  the salaries of its administrative law
  judges;
                     (B)  the travel expenses, hearing costs, and
  telephone charges directly related to the conduct of a hearing or
  procedure; and
                     (C)  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)  under Section 2003.047 or 2003.049 [by the natural
  resource conservation division or the utility division]; or
               (2)  under the administrative license revocation
  program.
         SECTION 4.  Subchapter B, Chapter 2003, Government Code, is
  amended by adding Section 2003.025 to read as follows:
         Sec. 2003.025.  REQUIRED INFORMATION REGARDING ANTICIPATED
  HOURLY USAGE. (a) This section applies to a state agency that has
  entered into a contract with the office for the conduct of hearings
  and alternative dispute resolution procedures for the agency,
  including a contract under Section 2003.024, 2003.048, 2003.049, or
  2003.105, during any of the three most recent state fiscal years.
         (b)  On a date determined by the office before the beginning
  of each state fiscal biennium, a state agency to which this section
  applies shall submit to the office and the Legislative Budget Board
  information regarding the agency's anticipated hourly usage of the
  office's services for each fiscal year of that biennium.
         SECTION 5.  Section 2003.0421(c), Government Code, is
  amended to read as follows:
         (c)  This section applies to any contested case hearing
  conducted by the office, except hearings conducted on behalf of the
  Texas [Natural Resource Conservation] Commission on Environmental
  Quality or the Public Utility Commission of Texas which are
  governed by Sections 2003.047 and 2003.049.
         SECTION 6.  The heading to Section 2003.047, Government
  Code, is amended to read as follows:
         Sec. 2003.047.  HEARINGS FOR TEXAS COMMISSION ON
  ENVIRONMENTAL QUALITY [NATURAL RESOURCE CONSERVATION DIVISION].
         SECTION 7.  Sections 2003.047(a), (b), and (c), Government
  Code, are amended to read as follows:
         (a)  The office shall [establish a natural resource
  conservation division to] perform [the] contested case hearings for
  the Texas [Natural Resource Conservation] Commission on
  Environmental Quality.
         (b)  The office [division] shall conduct hearings relating
  to contested cases before the commission, other than a hearing
  conducted by one or more commissioners. The commission by rule may
  delegate to the office [division] the responsibility to hear any
  other matter before the commission if consistent with the
  responsibilities of the office [division].
         (c)  [Only an administrative law judge in the division may
  conduct a hearing on behalf of the commission. An administrative
  law judge in the division may conduct hearings for other state
  agencies as time allows.] The office may [transfer an
  administrative law judge to the division on a permanent or
  temporary basis and may] contract with qualified individuals to
  serve as temporary administrative law judges as necessary.
         SECTION 8.  Section 2003.048, Government Code, is amended to
  read as follows:
         Sec. 2003.048.  TEXAS [NATURAL RESOURCE CONSERVATION]
  COMMISSION ON ENVIRONMENTAL QUALITY HEARINGS FEE. The office shall
  charge the Texas [Natural Resource Conservation] Commission on
  Environmental Quality a fixed annual fee rather than an hourly rate
  for services rendered by the office to the commission. The amount
  of the fee may not be less than the amount appropriated to the Texas
  [Natural Resource Conservation] Commission on Environmental
  Quality in the General Appropriations Act for payment to the office
  [natural resource conservation division] to conduct commission
  hearings. The amount of the fee shall be based on the costs of
  conducting the hearings, the costs of travel expenses and telephone
  charges directly related to the hearings, docketing costs, and
  other applicable administrative costs of the office [including the
  administrative costs of the natural resource conservation
  division]. The office and the Texas [Natural Resource
  Conservation] Commission on Environmental Quality shall negotiate
  the amount of the fixed fee biennially, subject to the approval of
  the governor, to coincide with the commission's legislative
  appropriations request.
         SECTION 9.  The heading to Section 2003.049, Government
  Code, is amended to read as follows:
         Sec. 2003.049.  UTILITY HEARINGS [DIVISION].
         SECTION 10.  Sections 2003.049(a), (b), and (c), Government
  Code, are amended to read as follows:
         (a)  The office shall [establish a utility division to]
  perform [the] contested case hearings for the Public Utility
  Commission of Texas as prescribed by the Public Utility Regulatory
  Act of 1995 and other applicable law.
         (b)  The office [utility division] shall conduct hearings
  relating to contested cases before the commission, other than a
  hearing conducted by one or more commissioners. The commission by
  rule may delegate the responsibility to hear any other matter
  before the commission if consistent with the duties and
  responsibilities of the office [division].
         (c)  [Only an administrative law judge in the utility
  division may conduct a hearing on behalf of the commission. An
  administrative law judge in the utility division may conduct
  hearings for other state agencies as time allows.] The office may
  [transfer an administrative law judge into the division on a
  temporary or permanent basis and may] contract with qualified
  individuals to serve as temporary administrative law judges as
  necessary.
         SECTION 11.  Section 2003.051, Government Code, is amended
  to read as follows:
         Sec. 2003.051.  ROLE OF REFERRING AGENCY. (a) Except in
  connection with interim appeals of orders or questions certified to
  an agency by an administrative law judge, as permitted by law, a
  state agency that has referred a matter to the office in which the
  office will conduct a hearing may not take any adjudicative action
  relating to the matter until the office has issued its proposal for
  decision or otherwise concluded its involvement in the matter. The
  state agency may exercise its advocacy rights in the matter before
  the office in the same manner as any other party.
         (b)  If the office issues a proposal for decision in a matter
  referred to the office by a state agency, the referring agency shall
  send to the office an electronic copy of the agency's final decision
  or order in the matter.
         SECTION 12.  The heading to Subchapter D, Chapter 2003,
  Government Code, is amended to read as follows:
  SUBCHAPTER D. TAX HEARINGS [DIVISION]
         SECTION 13.  The heading to Section 2003.101, Government
  Code, is amended to read as follows:
         Sec. 2003.101.  TAX HEARINGS [DIVISION].
         SECTION 14.  Sections 2003.101(a), (b), (d), and (i),
  Government Code, are amended to read as follows:
         (a)  The office shall [establish a tax division to] conduct
  hearings relating to contested cases involving the collection,
  receipt, administration, and enforcement of taxes, fees, and other
  amounts as prescribed by Section 111.00455, Tax Code.
         (b)  An administrative law judge who presides at a [in the]
  tax hearing [division] is classified as a "master administrative
  law judge II."  Section 2003.0411 does not apply to this section.
         (d)  To be eligible to preside at a tax [division] hearing,
  an administrative law judge, including a temporary administrative
  law judge contracted with under Section 2003.043, must:
               (1)  be a United States citizen;
               (2)  be an attorney in good standing with the State Bar
  of Texas;
               (3)  have been licensed in this state to practice law
  for at least seven years; and
               (4)  have substantial experience in tax cases in making
  the record suitable for administrative review [or otherwise; and
               [(5)     have devoted at least 75 percent of the person's
  legal practice to Texas state tax law in at least five of the past 10
  years before the date on which the person begins employment in the
  tax division].
         (i)  For each hearing conducted under this section, an
  administrative law judge [in the tax division] shall issue a
  proposal for decision that includes findings of fact and
  conclusions of law.  In addition, the proposal for decision must
  include the legal reasoning and other analysis considered by the
  judge in reaching the decision.  Each finding of fact or conclusion
  of law made by the judge must be:
               (1)  independent and impartial; and
               (2)  based on state law and the evidence presented at
  the hearing.
         SECTION 15.  Sections 2003.103(a) and (b), Government Code,
  are amended to read as follows:
         (a)  The office [tax division] shall conduct all hearings
  under this subchapter in a timely manner.
         (b)  The office [tax division] shall use every reasonable
  means to expedite a case under this subchapter when the comptroller
  requests that the office [division] expedite the case.
         SECTION 16.  The heading to Section 2003.104, Government
  Code, is amended to read as follows:
         Sec. 2003.104.  CONFIDENTIALITY OF TAX HEARING [DIVISION]
  INFORMATION.
         SECTION 17.  The heading to Section 2003.105, Government
  Code, is amended to read as follows:
         Sec. 2003.105.  TAX [DIVISION] HEARINGS FEE.
         SECTION 18.  Section 2003.109, Government Code, is amended
  to read as follows:
         Sec. 2003.109.  RULES; EARLY REFERRAL. (a) The comptroller
  may adopt rules to provide for the referral to the office [tax
  division] of issues related to a case described by Section
  111.00455, Tax Code, to resolve a procedural or other preliminary
  dispute between the comptroller and a party.
         (b)  After a referral under this section, the office [tax
  division] shall docket the case and assign an administrative law
  judge under Section 2003.101.  If additional proceedings are
  required after the consideration of the procedural or other
  preliminary dispute, the office [tax division] shall appoint the
  same administrative law judge to hear the case.
         SECTION 19.  The heading to Section 111.00455, Tax Code, is
  amended to read as follows:
         Sec. 111.00455.  CONTESTED CASES CONDUCTED BY [TAX DIVISION
  OF] STATE OFFICE OF ADMINISTRATIVE HEARINGS.
         SECTION 20.  Sections 111.00455(a) and (c), Tax Code, are
  amended to read as follows:
         (a)  The [tax division of the] State Office of Administrative
  Hearings shall conduct any contested case hearing as provided by
  Section 2003.101, Government Code, in relation to the collection,
  receipt, administration, and enforcement of:
               (1)  a tax imposed under this title; and
               (2)  any other tax, fee, or other amount that the
  comptroller is required to collect, receive, administer, or enforce
  under a law not included in this title.
         (c)  A reference in law to the comptroller that relates to
  the performance of a contested case hearing described by Subsection
  (a) means the [tax division of the] State Office of Administrative
  Hearings.
         SECTION 21.  Section 524.032(b), Transportation Code, is
  amended to read as follows:
         (b)  A hearing shall be rescheduled if, before the fifth day
  before the date scheduled for the hearing, [the department
  receives] a request for a continuance from the person who requested
  the hearing is received in accordance with the memorandum of
  understanding adopted under Section 524.033(c). Unless both
  parties agree otherwise, the hearing shall be rescheduled for a
  date not earlier than the fifth day after the date [the department
  receives] the request for [the] continuance is received.
         SECTION 22.  Section 524.033, Transportation Code, is
  amended by adding Subsections (c) and (d) to read as follows:
         (c)  The department and chief administrative law judge of the
  State Office of Administrative Hearings shall adopt and at least
  biennially update a memorandum of understanding establishing that
  the State Office of Administrative Hearings has primary scheduling
  responsibility for a hearing under this subchapter. The memorandum
  of understanding must, at a minimum:
               (1)  set out the roles and responsibilities of the
  State Office of Administrative Hearings and the department in
  scheduling a hearing under this subchapter, including which agency
  is responsible for scheduling each stage of a hearing;
               (2)  ensure that the State Office of Administrative
  Hearings and the department have timely access to scheduling and
  continuance information; and
               (3)  provide for the transfer of funding for department
  employees responsible for scheduling hearings under this
  subchapter from the department to the State Office of
  Administrative Hearings when the State Office of Administrative
  Hearings assumes responsibility for initial scheduling of hearings
  under this subchapter.
         (d)  The State Office of Administrative Hearings and the
  department shall consult with the Department of Information
  Resources and the Office of Court Administration of the Texas
  Judicial System in developing any information technology solutions
  needed to complete the transfer of scheduling responsibilities, as
  outlined in the memorandum of understanding adopted under
  Subsection (c).
         SECTION 23.  Section 14.052(a), Utilities Code, is amended
  to read as follows:
         (a)  The commission shall adopt and enforce rules governing
  practice and procedure before the commission and, as applicable,
  practice and procedure before the [utility division of the] State
  Office of Administrative Hearings.
         SECTION 24.  Sections 14.053(a) and (b), Utilities Code, are
  amended to read as follows:
         (a)  The [utility division of the] State Office of
  Administrative Hearings shall conduct each hearing in a contested
  case that is not conducted by one or more commissioners.
         (b)  The commission may delegate to the [utility division of
  the] State Office of Administrative Hearings the authority to make
  a final decision and to issue findings of fact, conclusions of law,
  and other necessary orders in a proceeding in which there is not a
  contested issue of fact or law.
         SECTION 25.  Sections 102.006(a), (b), (c), and (e),
  Utilities Code, are amended to read as follows:
         (a)  The railroad commission by rule shall provide for
  administrative hearings in contested cases to be conducted by one
  or more members of the railroad commission, by railroad commission
  hearings examiners, or by the [utility division of the] State
  Office of Administrative Hearings. The rules must provide for a
  railroad commission hearings examiner or the [utility division of
  the] State Office of Administrative Hearings to conduct each
  hearing in a contested case that is not conducted by one or more
  members of the railroad commission. A hearing must be conducted in
  accordance with the rules and procedures adopted by the railroad
  commission.
         (b)  The railroad commission may delegate to a railroad
  commission hearings examiner or to the [utility division of the]
  State Office of Administrative Hearings the authority to make a
  final decision and to issue findings of fact, conclusions of law,
  and other necessary orders in a proceeding in which there is not a
  contested issue of fact or law.
         (c)  The railroad commission by rule shall define the
  procedures by which it delegates final decision-making authority
  under Subsection (b) to a railroad commission hearings examiner or
  to the [utility division of the] State Office of Administrative
  Hearings.
         (e)  The State Office of Administrative Hearings shall
  charge the railroad commission a fixed annual rate for hearings
  conducted by the office under this section only if the legislature
  appropriates money for that purpose. If the legislature does not
  appropriate money for the payment of a fixed annual rate under this
  section, the State Office of Administrative Hearings shall charge
  the railroad commission an hourly rate set by the office under
  Section 2003.024(a), Government Code, [of not more than $90 per
  hour] for hearings conducted by the office under this section.
         SECTION 26.  The following provisions of the Government Code
  are repealed:
               (1)  Sections 2003.049(k) and (l);
               (2)  Section 2003.101(c);
               (3)  Section 2003.102;
               (4)  Section 2003.106; and
               (5)  Section 2003.107.
         SECTION 27.  (a)  Section 2001.058(d-1), Government Code, as
  added by this Act, applies only to a hearing conducted by the State
  Office of Administrative Hearings on or after September 1, 2015.
         (b)  The State Office of Administrative Hearings shall
  develop and submit a legislative appropriations request in
  accordance with Section 2003.024, Government Code, as amended by
  this Act, beginning with the office's legislative appropriations
  request for the 2018-2019 state fiscal biennium.
         (c)  Section 2003.024, Government Code, as amended by this
  Act, applies only to a contract entered into on or after the
  effective date of this Act. A contract entered into before that
  date is governed by the law in effect immediately before the
  effective date of this Act, and the former law is continued in
  effect for that purpose.
         (d)  Not later than September 1, 2016, the Department of
  Public Safety and the chief administrative law judge of the State
  Office of Administrative Hearings shall adopt an initial memorandum
  of understanding under Section 524.033(c), Transportation Code, as
  added by this Act.
         SECTION 28.  (a) Except as provided by Subsection (b) of this
  section, this Act takes effect September 1, 2015.
         (b)  Section 524.032(b), Transportation Code, as amended by
  this Act, takes effect September 1, 2016.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2154 was passed by the House on April
  29, 2015, by the following vote:  Yeas 136, Nays 3, 1 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 2154 on May 19, 2015, by the following vote:  Yeas 139, Nays 5,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2154 was passed by the Senate, with
  amendments, on May 13, 2015, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor