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Statutes > Texas > Government-code > Title-10-general-government > Chapter-2003-state-office-of-administrative-hearings

GOVERNMENT CODE

TITLE 10. GENERAL GOVERNMENT

SUBTITLE A. ADMINISTRATIVE PROCEDURE AND PRACTICE

CHAPTER 2003. STATE OFFICE OF ADMINISTRATIVE HEARINGS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 2003.001. DEFINITIONS. In this chapter:

(1) "Administrative law judge" means an individual who presides

at an administrative hearing held under Chapter 2001.

(2) "Alternative dispute resolution procedure" has the meaning

assigned by Section 2009.003.

(3) "Office" means the State Office of Administrative Hearings.

(4) "State agency" means:

(A) a state board, commission, department, or other agency that

is subject to Chapter 2001; and

(B) to the extent provided by Title 5, Labor Code, the Texas

Department of Insurance, as regards proceedings and activities

under Title 5, Labor Code, of the department, the commissioner of

insurance, or the commissioner of workers' compensation.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1995, 74th Leg., ch. 980, Sec. 3.01, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 934, Sec. 2, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 19.02(9), eff. Sept.

1, 1999; Acts 1999, 76th Leg., ch. 1352, Sec. 7, eff. Sept. 1,

1999.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 6.009, eff. September 1, 2005.

SUBCHAPTER B. STATE OFFICE OF ADMINISTRATIVE HEARINGS

Sec. 2003.021. OFFICE. (a) The State Office of Administrative

Hearings is a state agency created to serve as an independent

forum for the conduct of adjudicative hearings in the executive

branch of state government. The purpose of the office is to

separate the adjudicative function from the investigative,

prosecutorial, and policymaking functions in the executive branch

in relation to hearings that the office is authorized to conduct.

(b) The office:

(1) shall conduct all administrative hearings in contested cases

under Chapter 2001 that are before a state agency that does not

employ an individual whose only duty is to preside as a hearings

officer over matters related to contested cases before the

agency;

(2) shall conduct administrative hearings in matters for which

the office is required to conduct the hearing under other law;

(3) shall conduct alternative dispute resolution procedures that

the office is required to conduct under law; and

(4) may conduct, for a fee and under a contract, administrative

hearings or alternative dispute resolution procedures in matters

voluntarily referred to the office by a governmental entity.

(c) The office shall conduct hearings under Title 5, Labor Code,

as provided by that title. In conducting hearings under Title 5,

Labor Code, the office shall consider the applicable substantive

rules and policies of the division of workers' compensation of

the Texas Department of Insurance regarding workers' compensation

claims. The office and the Texas Department of Insurance shall

enter into an interagency contract under Chapter 771 to pay the

costs incurred by the office in implementing this subsection.

(d) The office shall conduct hearings under the Agriculture Code

as provided under Section 12.032, Agriculture Code. In conducting

hearings under the Agriculture Code, the office shall consider

the applicable substantive rules and policies of the Department

of Agriculture.

(e) The office shall conduct all hearings in contested cases

under Chapter 2001 that are before the commissioner of public

health or the Texas Board of Health or Texas Department of

Health.

(f) The office may adopt a seal to authenticate the official

acts of the office and of its administrative law judges.

(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.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1995, 74th Leg., ch. 419, Sec. 3.29, eff.

Sept. 1, 1995; Acts 1995, 74th Leg., ch. 980, Sec. 3.02, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 934, Sec. 3, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 85, Sec. 1, eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 1411, Sec. 1.01, eff. Sept. 1,

1999; Acts 2001, 77th Leg., ch. 1420, Sec. 21.001(65), eff. Sept.

1, 2001; Acts 2003, 78th Leg., ch. 1215, Sec. 2, eff. Sept. 1,

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 6.010, eff. September 1, 2005.

Sec. 2003.022. CHIEF ADMINISTRATIVE LAW JUDGE. (a) The office

is under the direction of a chief administrative law judge

appointed by the governor for a two-year term. The chief

administrative law judge is eligible for reappointment.

(b) To be eligible for appointment as chief administrative law

judge, an individual must:

(1) be licensed to practice law in this state; and

(2) for at least five years, have:

(A) practiced administrative law;

(B) conducted administrative hearings under Chapter 2001; or

(C) engaged in a combination of the two activities listed in

Paragraphs (A) and (B).

(c) The chief administrative law judge may not engage in the

practice of law while serving as chief administrative law judge.

The chief administrative law judge serves in a full-time

position.

(d) The chief administrative law judge shall:

(1) supervise the office;

(2) protect and ensure the decisional independence of each

administrative law judge;

(3) adopt a code of conduct for administrative law judges that

may be modeled on the Code of Judicial Conduct; and

(4) monitor the quality of administrative hearings conducted by

the office.

(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.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1997, 75th Leg., ch. 212, Sec. 1, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 85, Sec. 2, eff. Sept.

1, 1999; Acts 2003, 78th Leg., ch. 1215, Sec. 3, eff. Sept. 1,

2003.

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).

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 4, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 5, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 5, eff. Sept. 1,

2003.

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 and every 12th year after 2015 are

reviewed.

Added by Acts 1997, 75th Leg., ch. 210, Sec. 1, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1169, Sec. 2.04, eff. Sept. 1,

1997. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 6, eff.

Sept. 1, 2003.

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 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, 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. The lump-sum

amount paid to the office under the contract must be based on:

(1) an hourly rate that is set by the office 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 paid by a

lump-sum appropriation to the office for a state fiscal biennium,

the office shall timely provide to the legislature the

information described by Subsection (c).

(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) by the natural resource conservation division or the utility

division; or

(2) under the administrative license revocation program.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 3, eff. Sept. 1,

2000. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 7, eff.

Sept. 1, 2003.

SUBCHAPTER C. STAFF AND ADMINISTRATION

Sec. 2003.041. EMPLOYMENT OF ADMINISTRATIVE LAW JUDGES. (a)

The chief administrative law judge shall employ administrative

law judges to conduct hearings for state agencies subject to this

chapter.

(b) To be eligible for employment with the office as an

administrative law judge, an individual must be licensed to

practice law in this state and meet other requirements prescribed

by the chief administrative law judge.

(c) An administrative law judge employed by the office is not

responsible to or subject to the supervision, direction, or

indirect influence of any person other than the chief

administrative law judge or a senior or master administrative law

judge designated by the chief administrative law judge. In

particular, an administrative law judge employed by the office is

not responsible to or subject to the supervision, direction, or

indirect influence of an officer, employee, or agent of another

state agency who performs investigative, prosecutorial, or

advisory functions for the other agency.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 4, eff. Sept.

1, 1999.

Sec. 2003.0411. SENIOR AND MASTER ADMINISTRATIVE LAW JUDGES.

(a) The chief administrative law judge may appoint senior or

master administrative law judges to perform duties assigned by

the chief administrative law judge.

(b) To be appointed a senior administrative law judge, a person

must have at least six years of general legal experience, must

have at least five years of experience presiding over

administrative hearings or presiding over hearings as a judge or

master of a court, and must meet other requirements as prescribed

by the chief administrative law judge.

(c) Except as provided by Section 2003.101, to be appointed a

master administrative law judge, a person must have at least 10

years of general legal experience, must have at least six years

of experience presiding over administrative hearings or presiding

over hearings as a judge or master of a court, and must meet

other requirements as prescribed by the chief administrative law

judge.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 5, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 2, eff. June 15, 2007.

Sec. 2003.0412. EX PARTE CONSULTATIONS. (a) Except as provided

by Subsection (b), the provisions of Section 2001.061 apply in

relation to a matter before the office without regard to whether

the matter is considered a contested case under Chapter 2001.

(b) The provisions of Section 2001.061 do not apply to a matter

before the office to the extent that the office is conducting an

alternative dispute resolution procedure in relation to the

matter. The chief administrative law judge shall adopt rules that

prescribe the types of alternative dispute resolution procedures

in which ex parte consultations are prohibited and the types of

alternative dispute resolution procedures in which ex parte

consultations are allowed. For alternative dispute resolution

procedures in which ex parte consultations are prohibited, the

chief administrative law judge in adopting rules under this

subsection shall model the prohibition after Section 2001.061 but

may vary the extent of the prohibition if necessary to take into

account the nature of alternative dispute resolution procedures.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 5, eff. Sept. 1,

1999.

Sec. 2003.042. POWERS OF ADMINISTRATIVE LAW JUDGE. (a) An

administrative law judge employed by the office or a temporary

administrative law judge may:

(1) administer an oath;

(2) take testimony;

(3) rule on a question of evidence;

(4) issue an order relating to discovery or another hearing or

prehearing matter, including an order imposing a sanction;

(5) issue an order that refers a case to an alternative dispute

resolution procedure, determines how the costs of the procedure

will be apportioned, and appoints an impartial third party as

described by Section 2009.053 to facilitate that procedure;

(6) issue a proposal for decision that includes findings of fact

and conclusions of law;

(7) if expressly authorized by a state agency rule adopted under

Section 2001.058(f), make the final decision in a contested case;

(8) serve as an impartial third party as described by Section

2009.053 for a dispute referred by an administrative law judge,

unless one of the parties objects to the appointment; and

(9) serve as an impartial third party as described by Section

2009.053 for a dispute referred by a government agency under a

contract.

(b) An administrative law judge may not serve as an impartial

third party for a dispute that the administrative law judge

refers to an alternative dispute resolution procedure.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1997, 75th Leg., ch. 605, Sec. 1, eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 934, Sec. 4, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1167, Sec. 2, eff. Sept. 1,

1997; Acts 1999, 76th Leg., ch. 62, Sec. 19.02(10), eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 1352, Sec. 8, eff. Sept. 1, 1999.

Sec. 2003.0421. SANCTIONS. (a) An administrative law judge

employed by the office or a temporary administrative law judge,

on the judge's own motion or on motion of a party and after

notice and an opportunity for a hearing, may impose appropriate

sanctions as provided by Subsection (b) against a party or its

representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

of the state agency on behalf of which the hearing is being

conducted.

(b) A sanction imposed under Subsection (a) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representatives;

(3) holding that designated facts be considered admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of those

requests; and

(6) striking pleadings or testimony, or both, in whole or in

part.

(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 or the Public Utility

Commission of Texas which are governed by Sections 2003.047 and

2003.049.

Added by Acts 1997, 75th Leg., ch. 605, Sec. 2, eff. Sept. 1,

1997.

Sec. 2003.043. TEMPORARY ADMINISTRATIVE LAW JUDGE. (a) The

chief administrative law judge may contract with a qualified

individual to serve as a temporary administrative law judge if an

administrative law judge employed by the office is not available

to hear a case within a reasonable time.

(b) The chief administrative law judge shall adopt rules

relating to the qualifications of a temporary judge.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993.

Sec. 2003.044. STAFF. The chief administrative law judge may

hire staff as required to perform the powers and duties of the

office.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993.

Sec. 2003.045. OVERSIGHT OF ADMINISTRATIVE LAW JUDGES. The

chief administrative law judge may designate senior or master

administrative law judges to oversee the training, evaluation,

discipline, and promotion of administrative law judges employed

by the office.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 6, eff. Sept.

1, 1999.

Sec. 2003.0451. TRAINING. (a) The office shall provide at

least 30 hours of continuing legal education and judicial

training to each new administrative law judge employed by the

office who has less than three years of presiding experience. The

office shall provide the training required by this subsection

during the administrative law judge's first year of employment

with the office. The office may provide the training through

office personnel or through external sources, including state and

local bar associations, the Texas Center for the Judiciary, and

the National Judicial College. The training may include the

following areas:

(1) conducting fair and impartial hearings;

(2) ethics;

(3) evidence;

(4) civil trial litigation;

(5) administrative law;

(6) managing complex litigation;

(7) conducting high-volume proceedings;

(8) judicial writing;

(9) effective case-flow management;

(10) alternative dispute resolution methods; and

(11) other areas that the office considers to be relevant to the

work of an administrative law judge.

(b) The office shall provide continuing legal education and

advanced judicial training for other administrative law judges

employed by the office to the extent that money is available for

this purpose.

(c) Subsection (a) does not apply to a temporary administrative

law judge.

Added by Acts 1997, 75th Leg., ch. 371, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 7, eff. Sept.

1, 1999.

Sec. 2003.046. CENTRAL HEARINGS PANEL. (a) A central hearings

panel in the office is composed of administrative law judges and

senior or master administrative law judges assigned to the panel

by the chief administrative law judge.

(b) The chief administrative law judge may create teams or

divisions within the central panel, including an administrative

license revocation division, according to the subject matter or

types of hearings conducted by the central panel.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 8, eff. Sept.

1, 1999.

Sec. 2003.047. NATURAL RESOURCE CONSERVATION DIVISION. (a) The

office shall establish a natural resource conservation division

to perform the contested case hearings for the Texas Natural

Resource Conservation Commission.

(b) The 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 division the responsibility to hear any other matter before

the commission if consistent with the responsibilities of the

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.

(d) To be eligible to preside at a hearing on behalf of the

commission, an administrative law judge, regardless of temporary

or permanent status, must be licensed to practice law in this

state and have the expertise necessary to conduct hearings

regarding technical or other specialized subjects that may come

before the commission.

(e) In referring a matter for hearing, the commission shall

provide to the administrative law judge a list of disputed

issues. The commission shall specify the date by which the

administrative law judge is expected to complete the proceeding

and provide a proposal for decision to the commission. The

administrative law judge may extend the proceeding if the

administrative law judge determines that failure to grant an

extension would deprive a party of due process or another

constitutional right. The administrative law judge shall

establish a docket control order designed to complete the

proceeding by the date specified by the commission.

(f) Except as otherwise provided by this subsection, the scope

of the hearing is limited to the issues referred by the

commission. On the request of a party, the administrative law

judge may consider an issue that was not referred by the

commission if the administrative law judge determines that:

(1) the issue is material;

(2) the issue is supported by evidence; and

(3) there are good reasons for the failure to supply available

information regarding the issue during the public comment period.

(g) The scope of permissible discovery is limited to:

(1) any matter reasonably calculated to lead to the discovery of

admissible evidence regarding any issue referred to the

administrative law judge by the commission or that the

administrative law judge has agreed to consider; and

(2) the production of documents:

(A) reviewed or relied on in preparing application materials or

selecting the site of the proposed facility; or

(B) relating to the ownership of the applicant or the owner or

operator of the facility or proposed facility.

(h) The commission by rule shall:

(1) provide for subpoenas and commissions for depositions; and

(2) require that discovery be conducted in accordance with the

Texas Rules of Civil Procedure, except that the commission by

rule shall determine the level of discovery under Rule 190, Texas

Rules of Civil Procedure, appropriate for each type of case

considered by the commission, taking into account the nature and

complexity of the case.

(i) The office and the commission jointly shall adopt rules

providing for certification to the commission of an issue that

involves an ultimate finding of compliance with or satisfaction

of a statutory standard the determination of which is committed

to the discretion or judgment of the commission by law. The rules

must address, at a minimum, the issues that are appropriate for

certification and the procedure to be used in certifying the

issue. Each agency shall publish the jointly adopted rules.

(j) An administrative law judge hearing a case on behalf of the

commission, on the judge's own motion or on motion of a party and

after notice and an opportunity for a hearing, may impose

appropriate sanctions as provided by Subsection (k) against a

party or its representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the commission.

(k) A sanction imposed under Subsection (j) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representatives;

(3) holding that designated facts be considered admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of those

requests; and

(6) striking pleadings or testimony, or both, in whole or in

part.

(l) After hearing evidence and receiving legal argument, an

administrative law judge shall make findings of fact, conclusions

of law, and any ultimate findings required by statute, all of

which shall be separately stated. The administrative law judge

shall make a proposal for decision to the commission and shall

serve the proposal for decision on all parties. An opportunity

shall be given to each party to file exceptions to the proposal

for decision and briefs related to the issues addressed in the

proposal for decision. The commission shall consider and act on

the proposal for decision.

(m) Except as provided in Section 361.0832, Health and Safety

Code, the commission shall consider the proposal for decision

prepared by the administrative law judge, the exceptions of the

parties, and the briefs and argument of the parties. The

commission may amend the proposal for decision, including any

finding of fact, but any such amendment thereto and order shall

be based solely on the record made before the administrative law

judge. Any such amendment by the commission shall be accompanied

by an explanation of the basis of the amendment. The commission

may also refer the matter back to the administrative law judge to

reconsider any findings and conclusions set forth in the proposal

for decision or take additional evidence or to make additional

findings of fact or conclusions of law. The commission shall

serve a copy of the commission's order, including its finding of

facts and conclusions of law, on each party.

(n) The provisions of Chapter 2001 shall apply to contested case

hearings for the commission to the extent not inconsistent with

this section.

(o) An administrative law judge hearing a case on behalf of the

commission may not, without the agreement of all parties, issue

an order referring the case to an alternative dispute resolution

procedure if the commission has already conducted an unsuccessful

alternative dispute resolution procedure. If the commission has

not already conducted an alternative dispute resolution

procedure, the administrative law judge shall consider the

commission's recommendation in determining whether to issue an

order referring the case to the procedure.

Added by Acts 1995, 74th Leg., ch. 106, Sec. 1, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 934, Sec. 5, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1350, Sec. 6, eff. Sept.

1, 1999.

Sec. 2003.048. NATURAL RESOURCE CONSERVATION COMMISSION HEARINGS

FEE. The office shall charge the Texas Natural Resource

Conservation Commission 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 in the General

Appropriations Act for payment to the 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 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.

Added by Acts 1995, 74th Leg., ch. 106, Sec. 1, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 9, eff. Sept.

1, 2000.

Sec. 2003.049. UTILITY DIVISION. (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 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 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.

(d) To be eligible to preside at a hearing, an administrative

law judge, regardless of temporary or permanent status, must be

licensed to practice law in this state and have not less than

five years of general experience or three years of experience in

utility regulatory law.

(e) At the time the office receives jurisdiction of a

proceeding, the commission shall provide to the administrative

law judge a list of issues or areas that must be addressed. In

addition, the commission may identify and provide to the

administrative law judge at any time additional issues or areas

that must be addressed.

(f) The office and the commission shall jointly adopt rules

providing for certification to the commission of an issue that

involves an ultimate finding of compliance with or satisfaction

of a statutory standard the determination of which is committed

to the discretion or judgment of the commission by law. The rules

must address, at a minimum, the issues that are appropriate for

certification and the procedure to be used in certifying the

issue. Each agency shall publish the jointly adopted rules.

(g) Notwithstanding Section 2001.058, the commission may change

a finding of fact or conclusion of law made by the administrative

law judge or vacate or modify an order issued by the

administrative law judge only if the commission:

(1) determines that the administrative law judge:

(A) did not properly apply or interpret applicable law,

commission rules or policies, or prior administrative decisions;

or

(B) issued a finding of fact that is not supported by a

preponderance of the evidence; or

(2) determines that a commission policy or a prior

administrative decision on which the administrative law judge

relied is incorrect or should be changed.

(h) The commission shall state in writing the specific reason

and legal basis for its determination under Subsection (g).

(i) An administrative law judge, on the judge's own motion or on

motion of a party and after notice and an opportunity for a

hearing, may impose appropriate sanctions as provided by

Subsection (j) against a party or its representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the commission.

(j) A sanction imposed under Subsection (i) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representative;

(3) holding that designated facts be deemed admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of such

requests;

(6) punishing the offending party or its representative for

contempt to the same extent as a district court;

(7) requiring the offending party or its representative to pay,

at the time ordered by the administrative law judge, the

reasonable expenses, including attorney's fees, incurred by other

parties because of the sanctionable behavior; and

(8) striking pleadings or testimony, or both, in whole or in

part, or staying further proceedings until the order is obeyed.

(k) Hearings conducted for the commission by the office shall be

held in hearing rooms provided by the commission. The commission

shall also provide the utility division access to its computer

systems, databases, and library resources.

(l) The office shall charge the commission a fixed annual fee

rather than an hourly rate for services rendered by the utility

division to the commission. The amount of the fee may not be less

than the amount appropriated to the commission in the General

Appropriations Act for payment to the utility 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 utility division. The

office and the commission 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.

Added by Acts 1995, 74th Leg., ch. 765, Sec. 1.35, eff. Sept. 1,

1995. Renumbered from Government Code Sec. 2003.047 by Acts 1997,

75th Leg., ch. 165, Sec. 31.01(49), eff. Sept. 1, 1997. Amended

by Acts 1999, 76th Leg., ch. 85, Sec. 10, eff. Sept. 1, 2000.

Sec. 2003.050. PROCEDURAL RULES. (a) The chief administrative

law judge shall adopt rules that govern the procedures, including

the discovery procedures, that relate to a hearing conducted by

the office.

(b) Notwithstanding other law, the procedural rules of the state

agency on behalf of which the hearing is conducted govern

procedural matters that relate to the hearing only to the extent

that the chief administrative law judge's rules adopt the

agency's procedural rules by reference.

(c) The rules of the office regarding the participation of a

witness by telephone must include procedures to verify the

identity of the witness who is to appear by telephone.

Added by Acts 1997, 75th Leg., ch. 605, Sec. 3, eff. Jan. 1,

1998. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 8, eff.

Sept. 1, 2003.

Sec. 2003.051. ROLE OF REFERRING AGENCY. 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.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 11, eff. Sept. 1,

1999.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

Sec. 2003.057. HEARING TRANSLATOR. If a translator is requested

for all or part of a hearing conducted by the office, the office

shall provide an appropriate translator for that purpose.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 10, eff. Sept. 1,

2003.

SUBCHAPTER D. TAX DIVISION

Sec. 2003.101. TAX DIVISION. (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 in the tax division is

classified as a "master administrative law judge II." Section

2003.0411 does not apply to this section.

(c) If there are no cases in the tax division, and subject to

the prior approval of the comptroller, an administrative law

judge in the tax division may conduct hearings for other state

agencies. Before conducting a hearing for another state agency

under this subsection, the tax division must notify the

comptroller in writing. The notification must describe the case

that will be heard and the administrative law judge who will

conduct the hearing and must estimate the amount of time that the

judge will spend on the case. The office shall reimburse the

comptroller at an appropriate hourly rate for the time spent by

the administrative law judge on the case. The comptroller may

revoke approval to conduct hearings for other state agencies

under this subsection at any time.

(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;

(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.

(e) Notwithstanding Section 2001.058, the comptroller may change

a finding of fact or conclusion of law made by the administrative

law judge or vacate or modify an order issued by the

administrative law judge only if the comptroller:

(1) determines that the administrative law judge:

(A) did not properly apply or interpret applicable law, then

existing comptroller rules or policies, or prior administrative

decisions; or

(B) issued a finding of fact that is not supported by a

preponderance of the evidence; or

(2) determines that a comptroller policy or a prior

administrative decision on which the administrative law judge

relied is incorrect.

(f) The comptroller shall state in writing the specific reason

and legal basis for a determination under Subsection (e).

(g) An administrative law judge, on the judge's own motion or on

motion of a party and after notice and an opportunity for a

hearing, may impose appropriate sanctions as provided by

Subsection (h) against a party or its representative for:

(1) filing of a motion or pleading that is groundless and

brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the comptroller.

(h) A sanction imposed under Subsection (g) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) holding that designated facts be deemed admitted for

purposes of the proceeding;

(3) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(4) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of such

requests; and

(5) striking pleadings or testimony, or both, wholly or partly,

or staying further proceedings until the order is obeyed.

(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.

(j) The comptroller may not attempt to influence the findings of

fact or the administrative law judge's application of the law

except by evidence and legal argument. An administrative law

judge conducting a hearing under this subchapter may not directly

or indirectly communicate in connection with an issue of fact or

law with a party or its representative, except:

(1) on notice and opportunity for each party to participate; or

(2) to ask questions that involve ministerial, administrative,

or procedural matters that do not address the substance of the

issues or positions taken in the case.

(k) Appearances in hearings conducted for the comptroller by the

office may be by:

(1) the taxpayer;

(2) an attorney licensed to practice law in this state;

(3) a certified public accountant; or

(4) any other person designated by the taxpayer who is not

otherwise prohibited from appearing in the hearing.

(l) The comptroller is represented by an authorized

representative in all hearings conducted for the comptroller by

the office.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.102. SUNSET PROVISION. (a) The tax division is

subject to Chapter 325 (Texas Sunset Act).

(b) The Sunset Advisory Commission shall evaluate the tax

division and present to the 83rd Legislature a report on that

evaluation and the commission's recommendations in relation to

the tax division.

(c) During the regular legislative session at which the

commission presents its report and recommendations, the

legislature by law may continue the tax division as provided by

that chapter. If the tax division is not continued in existence

as provided by that chapter, the tax division is abolished and

this subchapter and Section 111.00455, Tax Code, expire on

September 1 of the odd-numbered year in which the regular

legislative session occurred.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Amended by:

Acts 2009, 81st Leg., 1st C.S., Ch.

2, Sec. 2.06, eff. July 10, 2009.

Sec. 2003.103. TIMELINESS OF HEARINGS. (a) The tax division

shall conduct all hearings under this subchapter in a timely

manner.

(b) The tax division shall use every reasonable means to

expedite a case under this subchapter when the comptroller

requests that the division expedite the case.

(c) This section is not intended to impair the independence of

the office in conducting a hearing under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.104. CONFIDENTIALITY OF TAX DIVISION INFORMATION. (a)

The office shall keep information that identifies a taxpayer who

participates in a case under this subchapter confidential,

including the taxpayer's name and social security number.

(b) The provision of information to the office that is

confidential under any law, including Section 111.006, 151.027,

or 171.206, Tax Code, does not affect the confidentiality of the

information, and the office shall maintain that confidentiality.

(c) A hearing conducted under this subchapter is confidential

and not open to the public.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.105. TAX DIVISION HEARINGS FEE. The office shall

charge the comptroller a fixed annual fee rather than an hourly

rate for services rendered by the office to the comptroller. The

office and the comptroller shall negotiate the amount of the

fixed fee biennially to coincide with the comptroller's

legislative appropriations request.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.106. COMPTROLLER'S PRIORITIES AND PUBLIC POLICY NEEDS.

(a) The comptroller shall provide input to the office to assist

the office regarding the comptroller's priorities and public

policy needs.

(b) This section is intended to assist the office in providing

efficient service under this subchapter and is not intended to

impair the independence of the office in conducting a hearing

under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.107. TAX DIVISION REVIEW. On request of the

comptroller, the office shall provide the comptroller the

following regarding the tax division:

(1) a list of the administrative law judges, including temporary

administrative law judges, who have heard cases in the division

in the past year;

(2) the qualifications of the judges; and

(3) any other information considered necessary by the

comptroller in evaluating the performance of the judges hearing

cases in the tax division.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.108. REPORTS. (a) The office shall provide the

comptroller a monthly status report that lists pending cases and

provides information on any case that exceeds the comptroller's

time lines for issuing a proposal for decision or an agreed

order.

(b) At least quarterly, the office shall review with the

comptroller and appropriate staff of the office the status of

pending cases under this subchapter.

(c) The office shall provide a quarterly report to the

comptroller on services performed by the office for the

comptroller under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.109. RULES; EARLY REFERRAL. (a) The comptroller may

adopt rules to provide for the referral to the 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 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 tax division shall appoint the same administrative law judge

to hear the case.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

SUBCHAPTER Z. PILOT PROGRAM: APPEALS FROM APPRAISAL REVIEW BOARD

DETERMINATIONS IN CERTAIN COUNTIES

For expiration of this subchapter, see Section 2003.916.

Sec. 2003.901. PILOT PROGRAM. (a) Not later than January 1,

2010, the office shall develop a pilot program under which, as an

alternative to filing an appeal under Section 42.01, Tax Code, a

property owner may appeal to the office an appraisal review board

order determining a protest concerning the appraised or market

value of property brought under Section 41.41(a)(1) or (2), Tax

Code, if the appraised or market value, as applicable, of the

property that was the subject of the protest, as determined by

the board order, is more than $1 million.

(b) The pilot program shall be developed and implemented in

conformance with the provisions of this subchapter.

(c) So as to expeditiously determine the appeals filed with the

office using resources available to the office, the office is not

required to determine more than 3,000 appeals filed under this

subchapter. The office may develop a formula to establish the

number of appeals that may be filed in each county included in

the pilot program based on the total number of lawsuits filed in

a county to which this subchapter applies as a percentage of the

total number of lawsuits filed in all of those counties.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.902. COUNTIES INCLUDED. The pilot program shall be

implemented in Bexar, Cameron, El Paso, Harris, Tarrant, and

Travis Counties for a three-year period beginning with the ad

valorem tax year that begins January 1, 2010.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.903. RULES. (a) The office has rulemaking authority

to implement this subchapter.

(b) The office has specific rulemaking authority to implement

those rules necessary to expeditiously determine appeals to the

office, based on the number of appeals filed and the resources

available to the office.

(c) The office may adopt rules that include the procedural

provisions of Chapter 41, Tax Code, applicable to a hearing

before an appraisal review board.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.904. APPLICABILITY TO REAL AND PERSONAL PROPERTY. The

pilot program must be applicable to a determination of the

appraised or market value made by an appraisal review board in

connection with real or personal property, other than industrial

property or minerals.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.905. EDUCATION AND TRAINING OF ADMINISTRATIVE LAW

JUDGES. (a) An administrative law judge assigned to hear an

appeal brought under this subchapter must have knowledge of:

(1) each of the appraisal methods a chief appraiser may use to

determine the appraised value or the market value of property

under Chapter 23, Tax Code; and

(2) the proper method for determining an appeal of a protest,

including a protest brought on the ground of unequal appraisal.

(b) An administrative law judge is entitled to attend one or

more training and education courses under Sections 5.04 and

5.041, Tax Code, to receive a copy of the materials used in a

course, or both, without charge.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.906. NOTICE OF APPEAL TO OFFICE. (a) To appeal an

appraisal review board order to the office under this subchapter,

a property owner must file with the chief appraiser of the

appraisal district not later than the 30th day after the date the

property owner receives notice of the order:

(1) a completed notice of appeal to the office in the form

prescribed by Secti

State Codes and Statutes

Statutes > Texas > Government-code > Title-10-general-government > Chapter-2003-state-office-of-administrative-hearings

GOVERNMENT CODE

TITLE 10. GENERAL GOVERNMENT

SUBTITLE A. ADMINISTRATIVE PROCEDURE AND PRACTICE

CHAPTER 2003. STATE OFFICE OF ADMINISTRATIVE HEARINGS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 2003.001. DEFINITIONS. In this chapter:

(1) "Administrative law judge" means an individual who presides

at an administrative hearing held under Chapter 2001.

(2) "Alternative dispute resolution procedure" has the meaning

assigned by Section 2009.003.

(3) "Office" means the State Office of Administrative Hearings.

(4) "State agency" means:

(A) a state board, commission, department, or other agency that

is subject to Chapter 2001; and

(B) to the extent provided by Title 5, Labor Code, the Texas

Department of Insurance, as regards proceedings and activities

under Title 5, Labor Code, of the department, the commissioner of

insurance, or the commissioner of workers' compensation.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1995, 74th Leg., ch. 980, Sec. 3.01, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 934, Sec. 2, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 19.02(9), eff. Sept.

1, 1999; Acts 1999, 76th Leg., ch. 1352, Sec. 7, eff. Sept. 1,

1999.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 6.009, eff. September 1, 2005.

SUBCHAPTER B. STATE OFFICE OF ADMINISTRATIVE HEARINGS

Sec. 2003.021. OFFICE. (a) The State Office of Administrative

Hearings is a state agency created to serve as an independent

forum for the conduct of adjudicative hearings in the executive

branch of state government. The purpose of the office is to

separate the adjudicative function from the investigative,

prosecutorial, and policymaking functions in the executive branch

in relation to hearings that the office is authorized to conduct.

(b) The office:

(1) shall conduct all administrative hearings in contested cases

under Chapter 2001 that are before a state agency that does not

employ an individual whose only duty is to preside as a hearings

officer over matters related to contested cases before the

agency;

(2) shall conduct administrative hearings in matters for which

the office is required to conduct the hearing under other law;

(3) shall conduct alternative dispute resolution procedures that

the office is required to conduct under law; and

(4) may conduct, for a fee and under a contract, administrative

hearings or alternative dispute resolution procedures in matters

voluntarily referred to the office by a governmental entity.

(c) The office shall conduct hearings under Title 5, Labor Code,

as provided by that title. In conducting hearings under Title 5,

Labor Code, the office shall consider the applicable substantive

rules and policies of the division of workers' compensation of

the Texas Department of Insurance regarding workers' compensation

claims. The office and the Texas Department of Insurance shall

enter into an interagency contract under Chapter 771 to pay the

costs incurred by the office in implementing this subsection.

(d) The office shall conduct hearings under the Agriculture Code

as provided under Section 12.032, Agriculture Code. In conducting

hearings under the Agriculture Code, the office shall consider

the applicable substantive rules and policies of the Department

of Agriculture.

(e) The office shall conduct all hearings in contested cases

under Chapter 2001 that are before the commissioner of public

health or the Texas Board of Health or Texas Department of

Health.

(f) The office may adopt a seal to authenticate the official

acts of the office and of its administrative law judges.

(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.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1995, 74th Leg., ch. 419, Sec. 3.29, eff.

Sept. 1, 1995; Acts 1995, 74th Leg., ch. 980, Sec. 3.02, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 934, Sec. 3, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 85, Sec. 1, eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 1411, Sec. 1.01, eff. Sept. 1,

1999; Acts 2001, 77th Leg., ch. 1420, Sec. 21.001(65), eff. Sept.

1, 2001; Acts 2003, 78th Leg., ch. 1215, Sec. 2, eff. Sept. 1,

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 6.010, eff. September 1, 2005.

Sec. 2003.022. CHIEF ADMINISTRATIVE LAW JUDGE. (a) The office

is under the direction of a chief administrative law judge

appointed by the governor for a two-year term. The chief

administrative law judge is eligible for reappointment.

(b) To be eligible for appointment as chief administrative law

judge, an individual must:

(1) be licensed to practice law in this state; and

(2) for at least five years, have:

(A) practiced administrative law;

(B) conducted administrative hearings under Chapter 2001; or

(C) engaged in a combination of the two activities listed in

Paragraphs (A) and (B).

(c) The chief administrative law judge may not engage in the

practice of law while serving as chief administrative law judge.

The chief administrative law judge serves in a full-time

position.

(d) The chief administrative law judge shall:

(1) supervise the office;

(2) protect and ensure the decisional independence of each

administrative law judge;

(3) adopt a code of conduct for administrative law judges that

may be modeled on the Code of Judicial Conduct; and

(4) monitor the quality of administrative hearings conducted by

the office.

(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.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1997, 75th Leg., ch. 212, Sec. 1, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 85, Sec. 2, eff. Sept.

1, 1999; Acts 2003, 78th Leg., ch. 1215, Sec. 3, eff. Sept. 1,

2003.

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).

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 4, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 5, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 5, eff. Sept. 1,

2003.

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 and every 12th year after 2015 are

reviewed.

Added by Acts 1997, 75th Leg., ch. 210, Sec. 1, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1169, Sec. 2.04, eff. Sept. 1,

1997. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 6, eff.

Sept. 1, 2003.

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 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, 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. The lump-sum

amount paid to the office under the contract must be based on:

(1) an hourly rate that is set by the office 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 paid by a

lump-sum appropriation to the office for a state fiscal biennium,

the office shall timely provide to the legislature the

information described by Subsection (c).

(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) by the natural resource conservation division or the utility

division; or

(2) under the administrative license revocation program.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 3, eff. Sept. 1,

2000. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 7, eff.

Sept. 1, 2003.

SUBCHAPTER C. STAFF AND ADMINISTRATION

Sec. 2003.041. EMPLOYMENT OF ADMINISTRATIVE LAW JUDGES. (a)

The chief administrative law judge shall employ administrative

law judges to conduct hearings for state agencies subject to this

chapter.

(b) To be eligible for employment with the office as an

administrative law judge, an individual must be licensed to

practice law in this state and meet other requirements prescribed

by the chief administrative law judge.

(c) An administrative law judge employed by the office is not

responsible to or subject to the supervision, direction, or

indirect influence of any person other than the chief

administrative law judge or a senior or master administrative law

judge designated by the chief administrative law judge. In

particular, an administrative law judge employed by the office is

not responsible to or subject to the supervision, direction, or

indirect influence of an officer, employee, or agent of another

state agency who performs investigative, prosecutorial, or

advisory functions for the other agency.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 4, eff. Sept.

1, 1999.

Sec. 2003.0411. SENIOR AND MASTER ADMINISTRATIVE LAW JUDGES.

(a) The chief administrative law judge may appoint senior or

master administrative law judges to perform duties assigned by

the chief administrative law judge.

(b) To be appointed a senior administrative law judge, a person

must have at least six years of general legal experience, must

have at least five years of experience presiding over

administrative hearings or presiding over hearings as a judge or

master of a court, and must meet other requirements as prescribed

by the chief administrative law judge.

(c) Except as provided by Section 2003.101, to be appointed a

master administrative law judge, a person must have at least 10

years of general legal experience, must have at least six years

of experience presiding over administrative hearings or presiding

over hearings as a judge or master of a court, and must meet

other requirements as prescribed by the chief administrative law

judge.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 5, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 2, eff. June 15, 2007.

Sec. 2003.0412. EX PARTE CONSULTATIONS. (a) Except as provided

by Subsection (b), the provisions of Section 2001.061 apply in

relation to a matter before the office without regard to whether

the matter is considered a contested case under Chapter 2001.

(b) The provisions of Section 2001.061 do not apply to a matter

before the office to the extent that the office is conducting an

alternative dispute resolution procedure in relation to the

matter. The chief administrative law judge shall adopt rules that

prescribe the types of alternative dispute resolution procedures

in which ex parte consultations are prohibited and the types of

alternative dispute resolution procedures in which ex parte

consultations are allowed. For alternative dispute resolution

procedures in which ex parte consultations are prohibited, the

chief administrative law judge in adopting rules under this

subsection shall model the prohibition after Section 2001.061 but

may vary the extent of the prohibition if necessary to take into

account the nature of alternative dispute resolution procedures.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 5, eff. Sept. 1,

1999.

Sec. 2003.042. POWERS OF ADMINISTRATIVE LAW JUDGE. (a) An

administrative law judge employed by the office or a temporary

administrative law judge may:

(1) administer an oath;

(2) take testimony;

(3) rule on a question of evidence;

(4) issue an order relating to discovery or another hearing or

prehearing matter, including an order imposing a sanction;

(5) issue an order that refers a case to an alternative dispute

resolution procedure, determines how the costs of the procedure

will be apportioned, and appoints an impartial third party as

described by Section 2009.053 to facilitate that procedure;

(6) issue a proposal for decision that includes findings of fact

and conclusions of law;

(7) if expressly authorized by a state agency rule adopted under

Section 2001.058(f), make the final decision in a contested case;

(8) serve as an impartial third party as described by Section

2009.053 for a dispute referred by an administrative law judge,

unless one of the parties objects to the appointment; and

(9) serve as an impartial third party as described by Section

2009.053 for a dispute referred by a government agency under a

contract.

(b) An administrative law judge may not serve as an impartial

third party for a dispute that the administrative law judge

refers to an alternative dispute resolution procedure.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1997, 75th Leg., ch. 605, Sec. 1, eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 934, Sec. 4, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1167, Sec. 2, eff. Sept. 1,

1997; Acts 1999, 76th Leg., ch. 62, Sec. 19.02(10), eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 1352, Sec. 8, eff. Sept. 1, 1999.

Sec. 2003.0421. SANCTIONS. (a) An administrative law judge

employed by the office or a temporary administrative law judge,

on the judge's own motion or on motion of a party and after

notice and an opportunity for a hearing, may impose appropriate

sanctions as provided by Subsection (b) against a party or its

representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

of the state agency on behalf of which the hearing is being

conducted.

(b) A sanction imposed under Subsection (a) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representatives;

(3) holding that designated facts be considered admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of those

requests; and

(6) striking pleadings or testimony, or both, in whole or in

part.

(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 or the Public Utility

Commission of Texas which are governed by Sections 2003.047 and

2003.049.

Added by Acts 1997, 75th Leg., ch. 605, Sec. 2, eff. Sept. 1,

1997.

Sec. 2003.043. TEMPORARY ADMINISTRATIVE LAW JUDGE. (a) The

chief administrative law judge may contract with a qualified

individual to serve as a temporary administrative law judge if an

administrative law judge employed by the office is not available

to hear a case within a reasonable time.

(b) The chief administrative law judge shall adopt rules

relating to the qualifications of a temporary judge.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993.

Sec. 2003.044. STAFF. The chief administrative law judge may

hire staff as required to perform the powers and duties of the

office.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993.

Sec. 2003.045. OVERSIGHT OF ADMINISTRATIVE LAW JUDGES. The

chief administrative law judge may designate senior or master

administrative law judges to oversee the training, evaluation,

discipline, and promotion of administrative law judges employed

by the office.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 6, eff. Sept.

1, 1999.

Sec. 2003.0451. TRAINING. (a) The office shall provide at

least 30 hours of continuing legal education and judicial

training to each new administrative law judge employed by the

office who has less than three years of presiding experience. The

office shall provide the training required by this subsection

during the administrative law judge's first year of employment

with the office. The office may provide the training through

office personnel or through external sources, including state and

local bar associations, the Texas Center for the Judiciary, and

the National Judicial College. The training may include the

following areas:

(1) conducting fair and impartial hearings;

(2) ethics;

(3) evidence;

(4) civil trial litigation;

(5) administrative law;

(6) managing complex litigation;

(7) conducting high-volume proceedings;

(8) judicial writing;

(9) effective case-flow management;

(10) alternative dispute resolution methods; and

(11) other areas that the office considers to be relevant to the

work of an administrative law judge.

(b) The office shall provide continuing legal education and

advanced judicial training for other administrative law judges

employed by the office to the extent that money is available for

this purpose.

(c) Subsection (a) does not apply to a temporary administrative

law judge.

Added by Acts 1997, 75th Leg., ch. 371, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 7, eff. Sept.

1, 1999.

Sec. 2003.046. CENTRAL HEARINGS PANEL. (a) A central hearings

panel in the office is composed of administrative law judges and

senior or master administrative law judges assigned to the panel

by the chief administrative law judge.

(b) The chief administrative law judge may create teams or

divisions within the central panel, including an administrative

license revocation division, according to the subject matter or

types of hearings conducted by the central panel.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 8, eff. Sept.

1, 1999.

Sec. 2003.047. NATURAL RESOURCE CONSERVATION DIVISION. (a) The

office shall establish a natural resource conservation division

to perform the contested case hearings for the Texas Natural

Resource Conservation Commission.

(b) The 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 division the responsibility to hear any other matter before

the commission if consistent with the responsibilities of the

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.

(d) To be eligible to preside at a hearing on behalf of the

commission, an administrative law judge, regardless of temporary

or permanent status, must be licensed to practice law in this

state and have the expertise necessary to conduct hearings

regarding technical or other specialized subjects that may come

before the commission.

(e) In referring a matter for hearing, the commission shall

provide to the administrative law judge a list of disputed

issues. The commission shall specify the date by which the

administrative law judge is expected to complete the proceeding

and provide a proposal for decision to the commission. The

administrative law judge may extend the proceeding if the

administrative law judge determines that failure to grant an

extension would deprive a party of due process or another

constitutional right. The administrative law judge shall

establish a docket control order designed to complete the

proceeding by the date specified by the commission.

(f) Except as otherwise provided by this subsection, the scope

of the hearing is limited to the issues referred by the

commission. On the request of a party, the administrative law

judge may consider an issue that was not referred by the

commission if the administrative law judge determines that:

(1) the issue is material;

(2) the issue is supported by evidence; and

(3) there are good reasons for the failure to supply available

information regarding the issue during the public comment period.

(g) The scope of permissible discovery is limited to:

(1) any matter reasonably calculated to lead to the discovery of

admissible evidence regarding any issue referred to the

administrative law judge by the commission or that the

administrative law judge has agreed to consider; and

(2) the production of documents:

(A) reviewed or relied on in preparing application materials or

selecting the site of the proposed facility; or

(B) relating to the ownership of the applicant or the owner or

operator of the facility or proposed facility.

(h) The commission by rule shall:

(1) provide for subpoenas and commissions for depositions; and

(2) require that discovery be conducted in accordance with the

Texas Rules of Civil Procedure, except that the commission by

rule shall determine the level of discovery under Rule 190, Texas

Rules of Civil Procedure, appropriate for each type of case

considered by the commission, taking into account the nature and

complexity of the case.

(i) The office and the commission jointly shall adopt rules

providing for certification to the commission of an issue that

involves an ultimate finding of compliance with or satisfaction

of a statutory standard the determination of which is committed

to the discretion or judgment of the commission by law. The rules

must address, at a minimum, the issues that are appropriate for

certification and the procedure to be used in certifying the

issue. Each agency shall publish the jointly adopted rules.

(j) An administrative law judge hearing a case on behalf of the

commission, on the judge's own motion or on motion of a party and

after notice and an opportunity for a hearing, may impose

appropriate sanctions as provided by Subsection (k) against a

party or its representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the commission.

(k) A sanction imposed under Subsection (j) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representatives;

(3) holding that designated facts be considered admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of those

requests; and

(6) striking pleadings or testimony, or both, in whole or in

part.

(l) After hearing evidence and receiving legal argument, an

administrative law judge shall make findings of fact, conclusions

of law, and any ultimate findings required by statute, all of

which shall be separately stated. The administrative law judge

shall make a proposal for decision to the commission and shall

serve the proposal for decision on all parties. An opportunity

shall be given to each party to file exceptions to the proposal

for decision and briefs related to the issues addressed in the

proposal for decision. The commission shall consider and act on

the proposal for decision.

(m) Except as provided in Section 361.0832, Health and Safety

Code, the commission shall consider the proposal for decision

prepared by the administrative law judge, the exceptions of the

parties, and the briefs and argument of the parties. The

commission may amend the proposal for decision, including any

finding of fact, but any such amendment thereto and order shall

be based solely on the record made before the administrative law

judge. Any such amendment by the commission shall be accompanied

by an explanation of the basis of the amendment. The commission

may also refer the matter back to the administrative law judge to

reconsider any findings and conclusions set forth in the proposal

for decision or take additional evidence or to make additional

findings of fact or conclusions of law. The commission shall

serve a copy of the commission's order, including its finding of

facts and conclusions of law, on each party.

(n) The provisions of Chapter 2001 shall apply to contested case

hearings for the commission to the extent not inconsistent with

this section.

(o) An administrative law judge hearing a case on behalf of the

commission may not, without the agreement of all parties, issue

an order referring the case to an alternative dispute resolution

procedure if the commission has already conducted an unsuccessful

alternative dispute resolution procedure. If the commission has

not already conducted an alternative dispute resolution

procedure, the administrative law judge shall consider the

commission's recommendation in determining whether to issue an

order referring the case to the procedure.

Added by Acts 1995, 74th Leg., ch. 106, Sec. 1, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 934, Sec. 5, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1350, Sec. 6, eff. Sept.

1, 1999.

Sec. 2003.048. NATURAL RESOURCE CONSERVATION COMMISSION HEARINGS

FEE. The office shall charge the Texas Natural Resource

Conservation Commission 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 in the General

Appropriations Act for payment to the 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 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.

Added by Acts 1995, 74th Leg., ch. 106, Sec. 1, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 9, eff. Sept.

1, 2000.

Sec. 2003.049. UTILITY DIVISION. (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 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 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.

(d) To be eligible to preside at a hearing, an administrative

law judge, regardless of temporary or permanent status, must be

licensed to practice law in this state and have not less than

five years of general experience or three years of experience in

utility regulatory law.

(e) At the time the office receives jurisdiction of a

proceeding, the commission shall provide to the administrative

law judge a list of issues or areas that must be addressed. In

addition, the commission may identify and provide to the

administrative law judge at any time additional issues or areas

that must be addressed.

(f) The office and the commission shall jointly adopt rules

providing for certification to the commission of an issue that

involves an ultimate finding of compliance with or satisfaction

of a statutory standard the determination of which is committed

to the discretion or judgment of the commission by law. The rules

must address, at a minimum, the issues that are appropriate for

certification and the procedure to be used in certifying the

issue. Each agency shall publish the jointly adopted rules.

(g) Notwithstanding Section 2001.058, the commission may change

a finding of fact or conclusion of law made by the administrative

law judge or vacate or modify an order issued by the

administrative law judge only if the commission:

(1) determines that the administrative law judge:

(A) did not properly apply or interpret applicable law,

commission rules or policies, or prior administrative decisions;

or

(B) issued a finding of fact that is not supported by a

preponderance of the evidence; or

(2) determines that a commission policy or a prior

administrative decision on which the administrative law judge

relied is incorrect or should be changed.

(h) The commission shall state in writing the specific reason

and legal basis for its determination under Subsection (g).

(i) An administrative law judge, on the judge's own motion or on

motion of a party and after notice and an opportunity for a

hearing, may impose appropriate sanctions as provided by

Subsection (j) against a party or its representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the commission.

(j) A sanction imposed under Subsection (i) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representative;

(3) holding that designated facts be deemed admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of such

requests;

(6) punishing the offending party or its representative for

contempt to the same extent as a district court;

(7) requiring the offending party or its representative to pay,

at the time ordered by the administrative law judge, the

reasonable expenses, including attorney's fees, incurred by other

parties because of the sanctionable behavior; and

(8) striking pleadings or testimony, or both, in whole or in

part, or staying further proceedings until the order is obeyed.

(k) Hearings conducted for the commission by the office shall be

held in hearing rooms provided by the commission. The commission

shall also provide the utility division access to its computer

systems, databases, and library resources.

(l) The office shall charge the commission a fixed annual fee

rather than an hourly rate for services rendered by the utility

division to the commission. The amount of the fee may not be less

than the amount appropriated to the commission in the General

Appropriations Act for payment to the utility 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 utility division. The

office and the commission 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.

Added by Acts 1995, 74th Leg., ch. 765, Sec. 1.35, eff. Sept. 1,

1995. Renumbered from Government Code Sec. 2003.047 by Acts 1997,

75th Leg., ch. 165, Sec. 31.01(49), eff. Sept. 1, 1997. Amended

by Acts 1999, 76th Leg., ch. 85, Sec. 10, eff. Sept. 1, 2000.

Sec. 2003.050. PROCEDURAL RULES. (a) The chief administrative

law judge shall adopt rules that govern the procedures, including

the discovery procedures, that relate to a hearing conducted by

the office.

(b) Notwithstanding other law, the procedural rules of the state

agency on behalf of which the hearing is conducted govern

procedural matters that relate to the hearing only to the extent

that the chief administrative law judge's rules adopt the

agency's procedural rules by reference.

(c) The rules of the office regarding the participation of a

witness by telephone must include procedures to verify the

identity of the witness who is to appear by telephone.

Added by Acts 1997, 75th Leg., ch. 605, Sec. 3, eff. Jan. 1,

1998. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 8, eff.

Sept. 1, 2003.

Sec. 2003.051. ROLE OF REFERRING AGENCY. 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.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 11, eff. Sept. 1,

1999.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

Sec. 2003.057. HEARING TRANSLATOR. If a translator is requested

for all or part of a hearing conducted by the office, the office

shall provide an appropriate translator for that purpose.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 10, eff. Sept. 1,

2003.

SUBCHAPTER D. TAX DIVISION

Sec. 2003.101. TAX DIVISION. (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 in the tax division is

classified as a "master administrative law judge II." Section

2003.0411 does not apply to this section.

(c) If there are no cases in the tax division, and subject to

the prior approval of the comptroller, an administrative law

judge in the tax division may conduct hearings for other state

agencies. Before conducting a hearing for another state agency

under this subsection, the tax division must notify the

comptroller in writing. The notification must describe the case

that will be heard and the administrative law judge who will

conduct the hearing and must estimate the amount of time that the

judge will spend on the case. The office shall reimburse the

comptroller at an appropriate hourly rate for the time spent by

the administrative law judge on the case. The comptroller may

revoke approval to conduct hearings for other state agencies

under this subsection at any time.

(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;

(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.

(e) Notwithstanding Section 2001.058, the comptroller may change

a finding of fact or conclusion of law made by the administrative

law judge or vacate or modify an order issued by the

administrative law judge only if the comptroller:

(1) determines that the administrative law judge:

(A) did not properly apply or interpret applicable law, then

existing comptroller rules or policies, or prior administrative

decisions; or

(B) issued a finding of fact that is not supported by a

preponderance of the evidence; or

(2) determines that a comptroller policy or a prior

administrative decision on which the administrative law judge

relied is incorrect.

(f) The comptroller shall state in writing the specific reason

and legal basis for a determination under Subsection (e).

(g) An administrative law judge, on the judge's own motion or on

motion of a party and after notice and an opportunity for a

hearing, may impose appropriate sanctions as provided by

Subsection (h) against a party or its representative for:

(1) filing of a motion or pleading that is groundless and

brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the comptroller.

(h) A sanction imposed under Subsection (g) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) holding that designated facts be deemed admitted for

purposes of the proceeding;

(3) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(4) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of such

requests; and

(5) striking pleadings or testimony, or both, wholly or partly,

or staying further proceedings until the order is obeyed.

(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.

(j) The comptroller may not attempt to influence the findings of

fact or the administrative law judge's application of the law

except by evidence and legal argument. An administrative law

judge conducting a hearing under this subchapter may not directly

or indirectly communicate in connection with an issue of fact or

law with a party or its representative, except:

(1) on notice and opportunity for each party to participate; or

(2) to ask questions that involve ministerial, administrative,

or procedural matters that do not address the substance of the

issues or positions taken in the case.

(k) Appearances in hearings conducted for the comptroller by the

office may be by:

(1) the taxpayer;

(2) an attorney licensed to practice law in this state;

(3) a certified public accountant; or

(4) any other person designated by the taxpayer who is not

otherwise prohibited from appearing in the hearing.

(l) The comptroller is represented by an authorized

representative in all hearings conducted for the comptroller by

the office.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.102. SUNSET PROVISION. (a) The tax division is

subject to Chapter 325 (Texas Sunset Act).

(b) The Sunset Advisory Commission shall evaluate the tax

division and present to the 83rd Legislature a report on that

evaluation and the commission's recommendations in relation to

the tax division.

(c) During the regular legislative session at which the

commission presents its report and recommendations, the

legislature by law may continue the tax division as provided by

that chapter. If the tax division is not continued in existence

as provided by that chapter, the tax division is abolished and

this subchapter and Section 111.00455, Tax Code, expire on

September 1 of the odd-numbered year in which the regular

legislative session occurred.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Amended by:

Acts 2009, 81st Leg., 1st C.S., Ch.

2, Sec. 2.06, eff. July 10, 2009.

Sec. 2003.103. TIMELINESS OF HEARINGS. (a) The tax division

shall conduct all hearings under this subchapter in a timely

manner.

(b) The tax division shall use every reasonable means to

expedite a case under this subchapter when the comptroller

requests that the division expedite the case.

(c) This section is not intended to impair the independence of

the office in conducting a hearing under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.104. CONFIDENTIALITY OF TAX DIVISION INFORMATION. (a)

The office shall keep information that identifies a taxpayer who

participates in a case under this subchapter confidential,

including the taxpayer's name and social security number.

(b) The provision of information to the office that is

confidential under any law, including Section 111.006, 151.027,

or 171.206, Tax Code, does not affect the confidentiality of the

information, and the office shall maintain that confidentiality.

(c) A hearing conducted under this subchapter is confidential

and not open to the public.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.105. TAX DIVISION HEARINGS FEE. The office shall

charge the comptroller a fixed annual fee rather than an hourly

rate for services rendered by the office to the comptroller. The

office and the comptroller shall negotiate the amount of the

fixed fee biennially to coincide with the comptroller's

legislative appropriations request.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.106. COMPTROLLER'S PRIORITIES AND PUBLIC POLICY NEEDS.

(a) The comptroller shall provide input to the office to assist

the office regarding the comptroller's priorities and public

policy needs.

(b) This section is intended to assist the office in providing

efficient service under this subchapter and is not intended to

impair the independence of the office in conducting a hearing

under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.107. TAX DIVISION REVIEW. On request of the

comptroller, the office shall provide the comptroller the

following regarding the tax division:

(1) a list of the administrative law judges, including temporary

administrative law judges, who have heard cases in the division

in the past year;

(2) the qualifications of the judges; and

(3) any other information considered necessary by the

comptroller in evaluating the performance of the judges hearing

cases in the tax division.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.108. REPORTS. (a) The office shall provide the

comptroller a monthly status report that lists pending cases and

provides information on any case that exceeds the comptroller's

time lines for issuing a proposal for decision or an agreed

order.

(b) At least quarterly, the office shall review with the

comptroller and appropriate staff of the office the status of

pending cases under this subchapter.

(c) The office shall provide a quarterly report to the

comptroller on services performed by the office for the

comptroller under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.109. RULES; EARLY REFERRAL. (a) The comptroller may

adopt rules to provide for the referral to the 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 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 tax division shall appoint the same administrative law judge

to hear the case.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

SUBCHAPTER Z. PILOT PROGRAM: APPEALS FROM APPRAISAL REVIEW BOARD

DETERMINATIONS IN CERTAIN COUNTIES

For expiration of this subchapter, see Section 2003.916.

Sec. 2003.901. PILOT PROGRAM. (a) Not later than January 1,

2010, the office shall develop a pilot program under which, as an

alternative to filing an appeal under Section 42.01, Tax Code, a

property owner may appeal to the office an appraisal review board

order determining a protest concerning the appraised or market

value of property brought under Section 41.41(a)(1) or (2), Tax

Code, if the appraised or market value, as applicable, of the

property that was the subject of the protest, as determined by

the board order, is more than $1 million.

(b) The pilot program shall be developed and implemented in

conformance with the provisions of this subchapter.

(c) So as to expeditiously determine the appeals filed with the

office using resources available to the office, the office is not

required to determine more than 3,000 appeals filed under this

subchapter. The office may develop a formula to establish the

number of appeals that may be filed in each county included in

the pilot program based on the total number of lawsuits filed in

a county to which this subchapter applies as a percentage of the

total number of lawsuits filed in all of those counties.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.902. COUNTIES INCLUDED. The pilot program shall be

implemented in Bexar, Cameron, El Paso, Harris, Tarrant, and

Travis Counties for a three-year period beginning with the ad

valorem tax year that begins January 1, 2010.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.903. RULES. (a) The office has rulemaking authority

to implement this subchapter.

(b) The office has specific rulemaking authority to implement

those rules necessary to expeditiously determine appeals to the

office, based on the number of appeals filed and the resources

available to the office.

(c) The office may adopt rules that include the procedural

provisions of Chapter 41, Tax Code, applicable to a hearing

before an appraisal review board.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.904. APPLICABILITY TO REAL AND PERSONAL PROPERTY. The

pilot program must be applicable to a determination of the

appraised or market value made by an appraisal review board in

connection with real or personal property, other than industrial

property or minerals.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.905. EDUCATION AND TRAINING OF ADMINISTRATIVE LAW

JUDGES. (a) An administrative law judge assigned to hear an

appeal brought under this subchapter must have knowledge of:

(1) each of the appraisal methods a chief appraiser may use to

determine the appraised value or the market value of property

under Chapter 23, Tax Code; and

(2) the proper method for determining an appeal of a protest,

including a protest brought on the ground of unequal appraisal.

(b) An administrative law judge is entitled to attend one or

more training and education courses under Sections 5.04 and

5.041, Tax Code, to receive a copy of the materials used in a

course, or both, without charge.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.906. NOTICE OF APPEAL TO OFFICE. (a) To appeal an

appraisal review board order to the office under this subchapter,

a property owner must file with the chief appraiser of the

appraisal district not later than the 30th day after the date the

property owner receives notice of the order:

(1) a completed notice of appeal to the office in the form

prescribed by Secti


State Codes and Statutes

State Codes and Statutes

Statutes > Texas > Government-code > Title-10-general-government > Chapter-2003-state-office-of-administrative-hearings

GOVERNMENT CODE

TITLE 10. GENERAL GOVERNMENT

SUBTITLE A. ADMINISTRATIVE PROCEDURE AND PRACTICE

CHAPTER 2003. STATE OFFICE OF ADMINISTRATIVE HEARINGS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 2003.001. DEFINITIONS. In this chapter:

(1) "Administrative law judge" means an individual who presides

at an administrative hearing held under Chapter 2001.

(2) "Alternative dispute resolution procedure" has the meaning

assigned by Section 2009.003.

(3) "Office" means the State Office of Administrative Hearings.

(4) "State agency" means:

(A) a state board, commission, department, or other agency that

is subject to Chapter 2001; and

(B) to the extent provided by Title 5, Labor Code, the Texas

Department of Insurance, as regards proceedings and activities

under Title 5, Labor Code, of the department, the commissioner of

insurance, or the commissioner of workers' compensation.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1995, 74th Leg., ch. 980, Sec. 3.01, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 934, Sec. 2, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 19.02(9), eff. Sept.

1, 1999; Acts 1999, 76th Leg., ch. 1352, Sec. 7, eff. Sept. 1,

1999.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 6.009, eff. September 1, 2005.

SUBCHAPTER B. STATE OFFICE OF ADMINISTRATIVE HEARINGS

Sec. 2003.021. OFFICE. (a) The State Office of Administrative

Hearings is a state agency created to serve as an independent

forum for the conduct of adjudicative hearings in the executive

branch of state government. The purpose of the office is to

separate the adjudicative function from the investigative,

prosecutorial, and policymaking functions in the executive branch

in relation to hearings that the office is authorized to conduct.

(b) The office:

(1) shall conduct all administrative hearings in contested cases

under Chapter 2001 that are before a state agency that does not

employ an individual whose only duty is to preside as a hearings

officer over matters related to contested cases before the

agency;

(2) shall conduct administrative hearings in matters for which

the office is required to conduct the hearing under other law;

(3) shall conduct alternative dispute resolution procedures that

the office is required to conduct under law; and

(4) may conduct, for a fee and under a contract, administrative

hearings or alternative dispute resolution procedures in matters

voluntarily referred to the office by a governmental entity.

(c) The office shall conduct hearings under Title 5, Labor Code,

as provided by that title. In conducting hearings under Title 5,

Labor Code, the office shall consider the applicable substantive

rules and policies of the division of workers' compensation of

the Texas Department of Insurance regarding workers' compensation

claims. The office and the Texas Department of Insurance shall

enter into an interagency contract under Chapter 771 to pay the

costs incurred by the office in implementing this subsection.

(d) The office shall conduct hearings under the Agriculture Code

as provided under Section 12.032, Agriculture Code. In conducting

hearings under the Agriculture Code, the office shall consider

the applicable substantive rules and policies of the Department

of Agriculture.

(e) The office shall conduct all hearings in contested cases

under Chapter 2001 that are before the commissioner of public

health or the Texas Board of Health or Texas Department of

Health.

(f) The office may adopt a seal to authenticate the official

acts of the office and of its administrative law judges.

(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.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1995, 74th Leg., ch. 419, Sec. 3.29, eff.

Sept. 1, 1995; Acts 1995, 74th Leg., ch. 980, Sec. 3.02, eff.

Sept. 1, 1995; Acts 1997, 75th Leg., ch. 934, Sec. 3, eff. Sept.

1, 1997; Acts 1999, 76th Leg., ch. 85, Sec. 1, eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 1411, Sec. 1.01, eff. Sept. 1,

1999; Acts 2001, 77th Leg., ch. 1420, Sec. 21.001(65), eff. Sept.

1, 2001; Acts 2003, 78th Leg., ch. 1215, Sec. 2, eff. Sept. 1,

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 6.010, eff. September 1, 2005.

Sec. 2003.022. CHIEF ADMINISTRATIVE LAW JUDGE. (a) The office

is under the direction of a chief administrative law judge

appointed by the governor for a two-year term. The chief

administrative law judge is eligible for reappointment.

(b) To be eligible for appointment as chief administrative law

judge, an individual must:

(1) be licensed to practice law in this state; and

(2) for at least five years, have:

(A) practiced administrative law;

(B) conducted administrative hearings under Chapter 2001; or

(C) engaged in a combination of the two activities listed in

Paragraphs (A) and (B).

(c) The chief administrative law judge may not engage in the

practice of law while serving as chief administrative law judge.

The chief administrative law judge serves in a full-time

position.

(d) The chief administrative law judge shall:

(1) supervise the office;

(2) protect and ensure the decisional independence of each

administrative law judge;

(3) adopt a code of conduct for administrative law judges that

may be modeled on the Code of Judicial Conduct; and

(4) monitor the quality of administrative hearings conducted by

the office.

(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.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1997, 75th Leg., ch. 212, Sec. 1, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 85, Sec. 2, eff. Sept.

1, 1999; Acts 2003, 78th Leg., ch. 1215, Sec. 3, eff. Sept. 1,

2003.

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).

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 4, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 5, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 5, eff. Sept. 1,

2003.

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 and every 12th year after 2015 are

reviewed.

Added by Acts 1997, 75th Leg., ch. 210, Sec. 1, eff. Sept. 1,

1997; Acts 1997, 75th Leg., ch. 1169, Sec. 2.04, eff. Sept. 1,

1997. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 6, eff.

Sept. 1, 2003.

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 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, 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. The lump-sum

amount paid to the office under the contract must be based on:

(1) an hourly rate that is set by the office 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 paid by a

lump-sum appropriation to the office for a state fiscal biennium,

the office shall timely provide to the legislature the

information described by Subsection (c).

(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) by the natural resource conservation division or the utility

division; or

(2) under the administrative license revocation program.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 3, eff. Sept. 1,

2000. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 7, eff.

Sept. 1, 2003.

SUBCHAPTER C. STAFF AND ADMINISTRATION

Sec. 2003.041. EMPLOYMENT OF ADMINISTRATIVE LAW JUDGES. (a)

The chief administrative law judge shall employ administrative

law judges to conduct hearings for state agencies subject to this

chapter.

(b) To be eligible for employment with the office as an

administrative law judge, an individual must be licensed to

practice law in this state and meet other requirements prescribed

by the chief administrative law judge.

(c) An administrative law judge employed by the office is not

responsible to or subject to the supervision, direction, or

indirect influence of any person other than the chief

administrative law judge or a senior or master administrative law

judge designated by the chief administrative law judge. In

particular, an administrative law judge employed by the office is

not responsible to or subject to the supervision, direction, or

indirect influence of an officer, employee, or agent of another

state agency who performs investigative, prosecutorial, or

advisory functions for the other agency.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 4, eff. Sept.

1, 1999.

Sec. 2003.0411. SENIOR AND MASTER ADMINISTRATIVE LAW JUDGES.

(a) The chief administrative law judge may appoint senior or

master administrative law judges to perform duties assigned by

the chief administrative law judge.

(b) To be appointed a senior administrative law judge, a person

must have at least six years of general legal experience, must

have at least five years of experience presiding over

administrative hearings or presiding over hearings as a judge or

master of a court, and must meet other requirements as prescribed

by the chief administrative law judge.

(c) Except as provided by Section 2003.101, to be appointed a

master administrative law judge, a person must have at least 10

years of general legal experience, must have at least six years

of experience presiding over administrative hearings or presiding

over hearings as a judge or master of a court, and must meet

other requirements as prescribed by the chief administrative law

judge.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 5, eff. Sept. 1,

1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 2, eff. June 15, 2007.

Sec. 2003.0412. EX PARTE CONSULTATIONS. (a) Except as provided

by Subsection (b), the provisions of Section 2001.061 apply in

relation to a matter before the office without regard to whether

the matter is considered a contested case under Chapter 2001.

(b) The provisions of Section 2001.061 do not apply to a matter

before the office to the extent that the office is conducting an

alternative dispute resolution procedure in relation to the

matter. The chief administrative law judge shall adopt rules that

prescribe the types of alternative dispute resolution procedures

in which ex parte consultations are prohibited and the types of

alternative dispute resolution procedures in which ex parte

consultations are allowed. For alternative dispute resolution

procedures in which ex parte consultations are prohibited, the

chief administrative law judge in adopting rules under this

subsection shall model the prohibition after Section 2001.061 but

may vary the extent of the prohibition if necessary to take into

account the nature of alternative dispute resolution procedures.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 5, eff. Sept. 1,

1999.

Sec. 2003.042. POWERS OF ADMINISTRATIVE LAW JUDGE. (a) An

administrative law judge employed by the office or a temporary

administrative law judge may:

(1) administer an oath;

(2) take testimony;

(3) rule on a question of evidence;

(4) issue an order relating to discovery or another hearing or

prehearing matter, including an order imposing a sanction;

(5) issue an order that refers a case to an alternative dispute

resolution procedure, determines how the costs of the procedure

will be apportioned, and appoints an impartial third party as

described by Section 2009.053 to facilitate that procedure;

(6) issue a proposal for decision that includes findings of fact

and conclusions of law;

(7) if expressly authorized by a state agency rule adopted under

Section 2001.058(f), make the final decision in a contested case;

(8) serve as an impartial third party as described by Section

2009.053 for a dispute referred by an administrative law judge,

unless one of the parties objects to the appointment; and

(9) serve as an impartial third party as described by Section

2009.053 for a dispute referred by a government agency under a

contract.

(b) An administrative law judge may not serve as an impartial

third party for a dispute that the administrative law judge

refers to an alternative dispute resolution procedure.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1997, 75th Leg., ch. 605, Sec. 1, eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 934, Sec. 4, eff. Sept.

1, 1997; Acts 1997, 75th Leg., ch. 1167, Sec. 2, eff. Sept. 1,

1997; Acts 1999, 76th Leg., ch. 62, Sec. 19.02(10), eff. Sept. 1,

1999; Acts 1999, 76th Leg., ch. 1352, Sec. 8, eff. Sept. 1, 1999.

Sec. 2003.0421. SANCTIONS. (a) An administrative law judge

employed by the office or a temporary administrative law judge,

on the judge's own motion or on motion of a party and after

notice and an opportunity for a hearing, may impose appropriate

sanctions as provided by Subsection (b) against a party or its

representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

of the state agency on behalf of which the hearing is being

conducted.

(b) A sanction imposed under Subsection (a) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representatives;

(3) holding that designated facts be considered admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of those

requests; and

(6) striking pleadings or testimony, or both, in whole or in

part.

(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 or the Public Utility

Commission of Texas which are governed by Sections 2003.047 and

2003.049.

Added by Acts 1997, 75th Leg., ch. 605, Sec. 2, eff. Sept. 1,

1997.

Sec. 2003.043. TEMPORARY ADMINISTRATIVE LAW JUDGE. (a) The

chief administrative law judge may contract with a qualified

individual to serve as a temporary administrative law judge if an

administrative law judge employed by the office is not available

to hear a case within a reasonable time.

(b) The chief administrative law judge shall adopt rules

relating to the qualifications of a temporary judge.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993.

Sec. 2003.044. STAFF. The chief administrative law judge may

hire staff as required to perform the powers and duties of the

office.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993.

Sec. 2003.045. OVERSIGHT OF ADMINISTRATIVE LAW JUDGES. The

chief administrative law judge may designate senior or master

administrative law judges to oversee the training, evaluation,

discipline, and promotion of administrative law judges employed

by the office.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 6, eff. Sept.

1, 1999.

Sec. 2003.0451. TRAINING. (a) The office shall provide at

least 30 hours of continuing legal education and judicial

training to each new administrative law judge employed by the

office who has less than three years of presiding experience. The

office shall provide the training required by this subsection

during the administrative law judge's first year of employment

with the office. The office may provide the training through

office personnel or through external sources, including state and

local bar associations, the Texas Center for the Judiciary, and

the National Judicial College. The training may include the

following areas:

(1) conducting fair and impartial hearings;

(2) ethics;

(3) evidence;

(4) civil trial litigation;

(5) administrative law;

(6) managing complex litigation;

(7) conducting high-volume proceedings;

(8) judicial writing;

(9) effective case-flow management;

(10) alternative dispute resolution methods; and

(11) other areas that the office considers to be relevant to the

work of an administrative law judge.

(b) The office shall provide continuing legal education and

advanced judicial training for other administrative law judges

employed by the office to the extent that money is available for

this purpose.

(c) Subsection (a) does not apply to a temporary administrative

law judge.

Added by Acts 1997, 75th Leg., ch. 371, Sec. 1, eff. Sept. 1,

1997. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 7, eff. Sept.

1, 1999.

Sec. 2003.046. CENTRAL HEARINGS PANEL. (a) A central hearings

panel in the office is composed of administrative law judges and

senior or master administrative law judges assigned to the panel

by the chief administrative law judge.

(b) The chief administrative law judge may create teams or

divisions within the central panel, including an administrative

license revocation division, according to the subject matter or

types of hearings conducted by the central panel.

Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1,

1993. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 8, eff. Sept.

1, 1999.

Sec. 2003.047. NATURAL RESOURCE CONSERVATION DIVISION. (a) The

office shall establish a natural resource conservation division

to perform the contested case hearings for the Texas Natural

Resource Conservation Commission.

(b) The 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 division the responsibility to hear any other matter before

the commission if consistent with the responsibilities of the

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.

(d) To be eligible to preside at a hearing on behalf of the

commission, an administrative law judge, regardless of temporary

or permanent status, must be licensed to practice law in this

state and have the expertise necessary to conduct hearings

regarding technical or other specialized subjects that may come

before the commission.

(e) In referring a matter for hearing, the commission shall

provide to the administrative law judge a list of disputed

issues. The commission shall specify the date by which the

administrative law judge is expected to complete the proceeding

and provide a proposal for decision to the commission. The

administrative law judge may extend the proceeding if the

administrative law judge determines that failure to grant an

extension would deprive a party of due process or another

constitutional right. The administrative law judge shall

establish a docket control order designed to complete the

proceeding by the date specified by the commission.

(f) Except as otherwise provided by this subsection, the scope

of the hearing is limited to the issues referred by the

commission. On the request of a party, the administrative law

judge may consider an issue that was not referred by the

commission if the administrative law judge determines that:

(1) the issue is material;

(2) the issue is supported by evidence; and

(3) there are good reasons for the failure to supply available

information regarding the issue during the public comment period.

(g) The scope of permissible discovery is limited to:

(1) any matter reasonably calculated to lead to the discovery of

admissible evidence regarding any issue referred to the

administrative law judge by the commission or that the

administrative law judge has agreed to consider; and

(2) the production of documents:

(A) reviewed or relied on in preparing application materials or

selecting the site of the proposed facility; or

(B) relating to the ownership of the applicant or the owner or

operator of the facility or proposed facility.

(h) The commission by rule shall:

(1) provide for subpoenas and commissions for depositions; and

(2) require that discovery be conducted in accordance with the

Texas Rules of Civil Procedure, except that the commission by

rule shall determine the level of discovery under Rule 190, Texas

Rules of Civil Procedure, appropriate for each type of case

considered by the commission, taking into account the nature and

complexity of the case.

(i) The office and the commission jointly shall adopt rules

providing for certification to the commission of an issue that

involves an ultimate finding of compliance with or satisfaction

of a statutory standard the determination of which is committed

to the discretion or judgment of the commission by law. The rules

must address, at a minimum, the issues that are appropriate for

certification and the procedure to be used in certifying the

issue. Each agency shall publish the jointly adopted rules.

(j) An administrative law judge hearing a case on behalf of the

commission, on the judge's own motion or on motion of a party and

after notice and an opportunity for a hearing, may impose

appropriate sanctions as provided by Subsection (k) against a

party or its representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the commission.

(k) A sanction imposed under Subsection (j) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representatives;

(3) holding that designated facts be considered admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of those

requests; and

(6) striking pleadings or testimony, or both, in whole or in

part.

(l) After hearing evidence and receiving legal argument, an

administrative law judge shall make findings of fact, conclusions

of law, and any ultimate findings required by statute, all of

which shall be separately stated. The administrative law judge

shall make a proposal for decision to the commission and shall

serve the proposal for decision on all parties. An opportunity

shall be given to each party to file exceptions to the proposal

for decision and briefs related to the issues addressed in the

proposal for decision. The commission shall consider and act on

the proposal for decision.

(m) Except as provided in Section 361.0832, Health and Safety

Code, the commission shall consider the proposal for decision

prepared by the administrative law judge, the exceptions of the

parties, and the briefs and argument of the parties. The

commission may amend the proposal for decision, including any

finding of fact, but any such amendment thereto and order shall

be based solely on the record made before the administrative law

judge. Any such amendment by the commission shall be accompanied

by an explanation of the basis of the amendment. The commission

may also refer the matter back to the administrative law judge to

reconsider any findings and conclusions set forth in the proposal

for decision or take additional evidence or to make additional

findings of fact or conclusions of law. The commission shall

serve a copy of the commission's order, including its finding of

facts and conclusions of law, on each party.

(n) The provisions of Chapter 2001 shall apply to contested case

hearings for the commission to the extent not inconsistent with

this section.

(o) An administrative law judge hearing a case on behalf of the

commission may not, without the agreement of all parties, issue

an order referring the case to an alternative dispute resolution

procedure if the commission has already conducted an unsuccessful

alternative dispute resolution procedure. If the commission has

not already conducted an alternative dispute resolution

procedure, the administrative law judge shall consider the

commission's recommendation in determining whether to issue an

order referring the case to the procedure.

Added by Acts 1995, 74th Leg., ch. 106, Sec. 1, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 934, Sec. 5, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1350, Sec. 6, eff. Sept.

1, 1999.

Sec. 2003.048. NATURAL RESOURCE CONSERVATION COMMISSION HEARINGS

FEE. The office shall charge the Texas Natural Resource

Conservation Commission 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 in the General

Appropriations Act for payment to the 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 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.

Added by Acts 1995, 74th Leg., ch. 106, Sec. 1, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 85, Sec. 9, eff. Sept.

1, 2000.

Sec. 2003.049. UTILITY DIVISION. (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 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 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.

(d) To be eligible to preside at a hearing, an administrative

law judge, regardless of temporary or permanent status, must be

licensed to practice law in this state and have not less than

five years of general experience or three years of experience in

utility regulatory law.

(e) At the time the office receives jurisdiction of a

proceeding, the commission shall provide to the administrative

law judge a list of issues or areas that must be addressed. In

addition, the commission may identify and provide to the

administrative law judge at any time additional issues or areas

that must be addressed.

(f) The office and the commission shall jointly adopt rules

providing for certification to the commission of an issue that

involves an ultimate finding of compliance with or satisfaction

of a statutory standard the determination of which is committed

to the discretion or judgment of the commission by law. The rules

must address, at a minimum, the issues that are appropriate for

certification and the procedure to be used in certifying the

issue. Each agency shall publish the jointly adopted rules.

(g) Notwithstanding Section 2001.058, the commission may change

a finding of fact or conclusion of law made by the administrative

law judge or vacate or modify an order issued by the

administrative law judge only if the commission:

(1) determines that the administrative law judge:

(A) did not properly apply or interpret applicable law,

commission rules or policies, or prior administrative decisions;

or

(B) issued a finding of fact that is not supported by a

preponderance of the evidence; or

(2) determines that a commission policy or a prior

administrative decision on which the administrative law judge

relied is incorrect or should be changed.

(h) The commission shall state in writing the specific reason

and legal basis for its determination under Subsection (g).

(i) An administrative law judge, on the judge's own motion or on

motion of a party and after notice and an opportunity for a

hearing, may impose appropriate sanctions as provided by

Subsection (j) against a party or its representative for:

(1) filing a motion or pleading that is groundless and brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the commission.

(j) A sanction imposed under Subsection (i) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) charging all or any part of the expenses of discovery

against the offending party or its representative;

(3) holding that designated facts be deemed admitted for

purposes of the proceeding;

(4) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(5) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of such

requests;

(6) punishing the offending party or its representative for

contempt to the same extent as a district court;

(7) requiring the offending party or its representative to pay,

at the time ordered by the administrative law judge, the

reasonable expenses, including attorney's fees, incurred by other

parties because of the sanctionable behavior; and

(8) striking pleadings or testimony, or both, in whole or in

part, or staying further proceedings until the order is obeyed.

(k) Hearings conducted for the commission by the office shall be

held in hearing rooms provided by the commission. The commission

shall also provide the utility division access to its computer

systems, databases, and library resources.

(l) The office shall charge the commission a fixed annual fee

rather than an hourly rate for services rendered by the utility

division to the commission. The amount of the fee may not be less

than the amount appropriated to the commission in the General

Appropriations Act for payment to the utility 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 utility division. The

office and the commission 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.

Added by Acts 1995, 74th Leg., ch. 765, Sec. 1.35, eff. Sept. 1,

1995. Renumbered from Government Code Sec. 2003.047 by Acts 1997,

75th Leg., ch. 165, Sec. 31.01(49), eff. Sept. 1, 1997. Amended

by Acts 1999, 76th Leg., ch. 85, Sec. 10, eff. Sept. 1, 2000.

Sec. 2003.050. PROCEDURAL RULES. (a) The chief administrative

law judge shall adopt rules that govern the procedures, including

the discovery procedures, that relate to a hearing conducted by

the office.

(b) Notwithstanding other law, the procedural rules of the state

agency on behalf of which the hearing is conducted govern

procedural matters that relate to the hearing only to the extent

that the chief administrative law judge's rules adopt the

agency's procedural rules by reference.

(c) The rules of the office regarding the participation of a

witness by telephone must include procedures to verify the

identity of the witness who is to appear by telephone.

Added by Acts 1997, 75th Leg., ch. 605, Sec. 3, eff. Jan. 1,

1998. Amended by Acts 2003, 78th Leg., ch. 1215, Sec. 8, eff.

Sept. 1, 2003.

Sec. 2003.051. ROLE OF REFERRING AGENCY. 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.

Added by Acts 1999, 76th Leg., ch. 85, Sec. 11, eff. Sept. 1,

1999.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

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.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 9, eff. Sept. 1,

2003.

Sec. 2003.057. HEARING TRANSLATOR. If a translator is requested

for all or part of a hearing conducted by the office, the office

shall provide an appropriate translator for that purpose.

Added by Acts 2003, 78th Leg., ch. 1215, Sec. 10, eff. Sept. 1,

2003.

SUBCHAPTER D. TAX DIVISION

Sec. 2003.101. TAX DIVISION. (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 in the tax division is

classified as a "master administrative law judge II." Section

2003.0411 does not apply to this section.

(c) If there are no cases in the tax division, and subject to

the prior approval of the comptroller, an administrative law

judge in the tax division may conduct hearings for other state

agencies. Before conducting a hearing for another state agency

under this subsection, the tax division must notify the

comptroller in writing. The notification must describe the case

that will be heard and the administrative law judge who will

conduct the hearing and must estimate the amount of time that the

judge will spend on the case. The office shall reimburse the

comptroller at an appropriate hourly rate for the time spent by

the administrative law judge on the case. The comptroller may

revoke approval to conduct hearings for other state agencies

under this subsection at any time.

(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;

(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.

(e) Notwithstanding Section 2001.058, the comptroller may change

a finding of fact or conclusion of law made by the administrative

law judge or vacate or modify an order issued by the

administrative law judge only if the comptroller:

(1) determines that the administrative law judge:

(A) did not properly apply or interpret applicable law, then

existing comptroller rules or policies, or prior administrative

decisions; or

(B) issued a finding of fact that is not supported by a

preponderance of the evidence; or

(2) determines that a comptroller policy or a prior

administrative decision on which the administrative law judge

relied is incorrect.

(f) The comptroller shall state in writing the specific reason

and legal basis for a determination under Subsection (e).

(g) An administrative law judge, on the judge's own motion or on

motion of a party and after notice and an opportunity for a

hearing, may impose appropriate sanctions as provided by

Subsection (h) against a party or its representative for:

(1) filing of a motion or pleading that is groundless and

brought:

(A) in bad faith;

(B) for the purpose of harassment; or

(C) for any other improper purpose, such as to cause unnecessary

delay or needless increase in the cost of the proceeding;

(2) abuse of the discovery process in seeking, making, or

resisting discovery; or

(3) failure to obey an order of the administrative law judge or

the comptroller.

(h) A sanction imposed under Subsection (g) may include, as

appropriate and justified, issuance of an order:

(1) disallowing further discovery of any kind or of a particular

kind by the offending party;

(2) holding that designated facts be deemed admitted for

purposes of the proceeding;

(3) refusing to allow the offending party to support or oppose a

designated claim or defense or prohibiting the party from

introducing designated matters in evidence;

(4) disallowing in whole or in part requests for relief by the

offending party and excluding evidence in support of such

requests; and

(5) striking pleadings or testimony, or both, wholly or partly,

or staying further proceedings until the order is obeyed.

(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.

(j) The comptroller may not attempt to influence the findings of

fact or the administrative law judge's application of the law

except by evidence and legal argument. An administrative law

judge conducting a hearing under this subchapter may not directly

or indirectly communicate in connection with an issue of fact or

law with a party or its representative, except:

(1) on notice and opportunity for each party to participate; or

(2) to ask questions that involve ministerial, administrative,

or procedural matters that do not address the substance of the

issues or positions taken in the case.

(k) Appearances in hearings conducted for the comptroller by the

office may be by:

(1) the taxpayer;

(2) an attorney licensed to practice law in this state;

(3) a certified public accountant; or

(4) any other person designated by the taxpayer who is not

otherwise prohibited from appearing in the hearing.

(l) The comptroller is represented by an authorized

representative in all hearings conducted for the comptroller by

the office.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.102. SUNSET PROVISION. (a) The tax division is

subject to Chapter 325 (Texas Sunset Act).

(b) The Sunset Advisory Commission shall evaluate the tax

division and present to the 83rd Legislature a report on that

evaluation and the commission's recommendations in relation to

the tax division.

(c) During the regular legislative session at which the

commission presents its report and recommendations, the

legislature by law may continue the tax division as provided by

that chapter. If the tax division is not continued in existence

as provided by that chapter, the tax division is abolished and

this subchapter and Section 111.00455, Tax Code, expire on

September 1 of the odd-numbered year in which the regular

legislative session occurred.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Amended by:

Acts 2009, 81st Leg., 1st C.S., Ch.

2, Sec. 2.06, eff. July 10, 2009.

Sec. 2003.103. TIMELINESS OF HEARINGS. (a) The tax division

shall conduct all hearings under this subchapter in a timely

manner.

(b) The tax division shall use every reasonable means to

expedite a case under this subchapter when the comptroller

requests that the division expedite the case.

(c) This section is not intended to impair the independence of

the office in conducting a hearing under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.104. CONFIDENTIALITY OF TAX DIVISION INFORMATION. (a)

The office shall keep information that identifies a taxpayer who

participates in a case under this subchapter confidential,

including the taxpayer's name and social security number.

(b) The provision of information to the office that is

confidential under any law, including Section 111.006, 151.027,

or 171.206, Tax Code, does not affect the confidentiality of the

information, and the office shall maintain that confidentiality.

(c) A hearing conducted under this subchapter is confidential

and not open to the public.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.105. TAX DIVISION HEARINGS FEE. The office shall

charge the comptroller a fixed annual fee rather than an hourly

rate for services rendered by the office to the comptroller. The

office and the comptroller shall negotiate the amount of the

fixed fee biennially to coincide with the comptroller's

legislative appropriations request.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.106. COMPTROLLER'S PRIORITIES AND PUBLIC POLICY NEEDS.

(a) The comptroller shall provide input to the office to assist

the office regarding the comptroller's priorities and public

policy needs.

(b) This section is intended to assist the office in providing

efficient service under this subchapter and is not intended to

impair the independence of the office in conducting a hearing

under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.107. TAX DIVISION REVIEW. On request of the

comptroller, the office shall provide the comptroller the

following regarding the tax division:

(1) a list of the administrative law judges, including temporary

administrative law judges, who have heard cases in the division

in the past year;

(2) the qualifications of the judges; and

(3) any other information considered necessary by the

comptroller in evaluating the performance of the judges hearing

cases in the tax division.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.108. REPORTS. (a) The office shall provide the

comptroller a monthly status report that lists pending cases and

provides information on any case that exceeds the comptroller's

time lines for issuing a proposal for decision or an agreed

order.

(b) At least quarterly, the office shall review with the

comptroller and appropriate staff of the office the status of

pending cases under this subchapter.

(c) The office shall provide a quarterly report to the

comptroller on services performed by the office for the

comptroller under this subchapter.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

Sec. 2003.109. RULES; EARLY REFERRAL. (a) The comptroller may

adopt rules to provide for the referral to the 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 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 tax division shall appoint the same administrative law judge

to hear the case.

Added by Acts 2007, 80th Leg., R.S., Ch.

354, Sec. 3, eff. June 15, 2007.

SUBCHAPTER Z. PILOT PROGRAM: APPEALS FROM APPRAISAL REVIEW BOARD

DETERMINATIONS IN CERTAIN COUNTIES

For expiration of this subchapter, see Section 2003.916.

Sec. 2003.901. PILOT PROGRAM. (a) Not later than January 1,

2010, the office shall develop a pilot program under which, as an

alternative to filing an appeal under Section 42.01, Tax Code, a

property owner may appeal to the office an appraisal review board

order determining a protest concerning the appraised or market

value of property brought under Section 41.41(a)(1) or (2), Tax

Code, if the appraised or market value, as applicable, of the

property that was the subject of the protest, as determined by

the board order, is more than $1 million.

(b) The pilot program shall be developed and implemented in

conformance with the provisions of this subchapter.

(c) So as to expeditiously determine the appeals filed with the

office using resources available to the office, the office is not

required to determine more than 3,000 appeals filed under this

subchapter. The office may develop a formula to establish the

number of appeals that may be filed in each county included in

the pilot program based on the total number of lawsuits filed in

a county to which this subchapter applies as a percentage of the

total number of lawsuits filed in all of those counties.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.902. COUNTIES INCLUDED. The pilot program shall be

implemented in Bexar, Cameron, El Paso, Harris, Tarrant, and

Travis Counties for a three-year period beginning with the ad

valorem tax year that begins January 1, 2010.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.903. RULES. (a) The office has rulemaking authority

to implement this subchapter.

(b) The office has specific rulemaking authority to implement

those rules necessary to expeditiously determine appeals to the

office, based on the number of appeals filed and the resources

available to the office.

(c) The office may adopt rules that include the procedural

provisions of Chapter 41, Tax Code, applicable to a hearing

before an appraisal review board.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.904. APPLICABILITY TO REAL AND PERSONAL PROPERTY. The

pilot program must be applicable to a determination of the

appraised or market value made by an appraisal review board in

connection with real or personal property, other than industrial

property or minerals.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.905. EDUCATION AND TRAINING OF ADMINISTRATIVE LAW

JUDGES. (a) An administrative law judge assigned to hear an

appeal brought under this subchapter must have knowledge of:

(1) each of the appraisal methods a chief appraiser may use to

determine the appraised value or the market value of property

under Chapter 23, Tax Code; and

(2) the proper method for determining an appeal of a protest,

including a protest brought on the ground of unequal appraisal.

(b) An administrative law judge is entitled to attend one or

more training and education courses under Sections 5.04 and

5.041, Tax Code, to receive a copy of the materials used in a

course, or both, without charge.

Added by Acts 2009, 81st Leg., R.S., Ch.

1180, Sec. 1, eff. January 1, 2010.

Sec. 2003.906. NOTICE OF APPEAL TO OFFICE. (a) To appeal an

appraisal review board order to the office under this subchapter,

a property owner must file with the chief appraiser of the

appraisal district not later than the 30th day after the date the

property owner receives notice of the order:

(1) a completed notice of appeal to the office in the form

prescribed by Secti