TITLE 1. ADMINISTRATION

PART 2. TEXAS ETHICS COMMISSION

CHAPTER 12. SWORN COMPLAINTS

SUBCHAPTER A. GENERAL PROVISIONS AND PROCEDURES

1 TAC §12.28

The Texas Ethics Commission (the Commission) proposes new Texas Ethics Commission Rules §12.28, regarding procedures for Commission staff sending a request to a person for production or inspection of documents or other tangible things and requesting a subpoena from the Commission.

Section 571.1243 of the Government Code provides that the Commission may submit to a complainant or respondent written questions reasonably intended to lead to the discovery of matters relevant to the investigation in a sworn complaint. The Commission also may, for good cause, subpoena documents and witnesses on application by staff and a motion adopted by a vote of at least six members of the Commission for the purpose of attempting to obtain from the documents or witnesses specifically identified information, if the Commission reasonably believes that the information meets certain criteria. The criteria are that the information is likely to be determinative as to whether the subject of an investigation has violated a law within the Commission's jurisdiction; the information can be determined from the documents or is known by the witness; and the information is not reasonably available through a less intrusive means.

The rule formalizes Commission procedures by requiring staff to send a written request for production or inspection to a person before applying to the Commission for a subpoena.

Additionally, the rule requires a person responding to the request to produce or allow inspection of the documents within their possession, custody, or control or submit certain objections or state that nothing responsive to the request has been identified after a diligent search. Lastly, the rule requires staff to provide to the Commission any response it receives to its request when applying for a subpoena. Thus, the rule provides a means of communicating a person's objections to the Commission before a subpoena is issued.

Seana Willing, Executive Director, has determined that for the first five-year period the proposed new rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed new rule.

The Executive Director has also determined that for each year of the first five years the proposed new rule is in effect the public benefit will be clarity and fairness in the hearing process. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed new rule.

The Executive Director has determined that during the first five years that the proposed amended rule is in effect, it will not: create or eliminate a government program; require the creation of new employee positions or the elimination of existing employee positions; require an increase or decrease in future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; expand, limit, or repeal an existing regulation; increase or decrease the number of individuals subject to the rule's applicability; or positively or adversely affects this state's economy. The rule is a new rule and therefore creates a new regulation. However, the Commission's enabling statutes already authorize the Commission to issue subpoenas for a preliminary review hearing and the rule merely formalizes procedures related to such subpoenas and discovery requests preceding a subpoena.

The Texas Ethics Commission invites comments on the proposed new rule from any member of the public. A written statement should be emailed to public_comment@ethics.state.tx.us, or mailed or delivered to Seana Willing, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070, or by facsimile (FAX) to (512) 463-5777. A person who wants to offer spoken comments to the commission concerning the proposed new rule may do so at any commission meeting during the agenda item relating to the proposed new rule. Information concerning the date, time, and location of commission meetings is available by telephoning (512) 463-5800 or on the Texas Ethics Commission's website at www.ethics.state.tx.us.

The new rule §12.21 is proposed under Texas Government Code §571.062, which authorizes the commission to adopt rules to administer Chapter 571 of the Government Code.

The proposed new rule §12.21 affects Subchapter E of Chapter 571 of the Government Code.

§12.28.Production of Documents During Preliminary Review.

(a) Before applying for the commission to issue a subpoena under §571.137(a-1) of the Government Code, commission staff must send to the person from whom records are sought a written request for the production or inspection of documents or other tangible things that:

(1) specifies the items to be produced or inspected, either by individual item or by category, and describes with reasonable particularity each item and category; and

(2) provides a reasonable amount of time, but not less than 30 days, to comply with the request.

(b) The person from whom records are sought must produce or allow the inspection of documents or other tangible things within the person's possession, custody or control within the time provided in the request, or submit in writing, as appropriate:

(1) objections to those records that are unreasonable, improper, or unnecessary to investigate the complaint; or

(2) that, after a diligent search, no items have been identified that are responsive to the request.

(c) Commission staff shall provide to the commission any response it receives to its request for production or inspection when applying for a subpoena under §571.137(a-1) of the Government Code.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 12, 2017.

TRD-201705084

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: January 28, 2018

For further information, please call: (512) 463-5800


1 TAC §12.36

The Texas Ethics Commission (the Commission) proposes new Texas Ethics Commission Rules §12.36, clarifying the facts that the Commission will consider when assessing a civil penalty in the sworn complaint (enforcement) process.

Section 571.173 of the Government Code authorizes the Commission to impose a civil penalty of not more than $5,000 or triple the amount at issue under a law administered and enforced by the Commission, whichever amount is more, for a delay in complying with a Commission order or for a violation of a law administered and enforced by the Commission. Section 571.177 of the Government Code provides the Commission with discretion in imposing a civil penalty and lists the factors that the Commission shall consider when assessing a civil penalty, including the seriousness and circumstances of a violation, the history of previous violations, the violator's good faith, and "other matters that justice may require."

Proposed §12.36 would clarify that the factors identified in §571.177, Government Code, include whether a respondent timely responds to written questions or subpoenas in the enforcement process, thus notifying a respondent that responses to discovery requests and subpoenas can be weighed by the Commission when determining the amount of a civil penalty.

Additionally, current Commission Rule §18.27 states that the Commission may consider the fine amounts set out in Title 1, Chapter 18 when assessing a fine in the sworn complaint process. The Commission intends to adopt in Title 1, Chapter 12 a new rule, §12.36, which would incorporate the language from current rule §18.27 with revisions. Chapter 12 is a more appropriate location containing other rules related to sworn complaints, and thus current rule §18.27 will be repealed, as stated in a separate notice in the Texas Register. Subsection (b) of §18.27 states that the Commission is not required to waive a fine when a respondent corrects a report, but the Commission may consider it a mitigating factor. That language would be moved to rule §12.36(c) and amended to state that filing a late report or making a corrective action could also be considered mitigating factors when assessing a fine.

Seana Willing, Executive Director, has determined that for the first five-year period the proposed new rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed new rule.

The Executive Director has determined that during the first five years that the proposed new rule is in effect, it will not: create or eliminate a government program; require the creation of new employee positions or the elimination of existing employee positions; require an increase or decrease in future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; expand, limit, or repeal an existing regulation; increase or decrease the number of individuals subject to the rule's applicability; or positively or adversely affects this state's economy. The rule creates a new regulation by creating a new rule that refers to the statutory authority for the Commission to consider various factors when determining the amount of a civil penalty and further clarifies those factors. The rule also includes subsections that currently exist in §18.27, which the Commission is presently set to repeal simultaneously with this new rule.

The Executive Director has also determined that for each year of the first five years the proposed new rule is in effect the public benefit will be clarity in what factors the Commission may consider when assessing a civil penalty during the sworn complaint process. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed new rule.

The Texas Ethics Commission invites comments on the proposed new rule from any member of the public. A written statement should be emailed to public_comment@ethics.state.tx.us, or mailed or delivered to Seana Willing, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070, or by facsimile (FAX) to (512) 463-5777. A person who wants to offer spoken comments to the Commission concerning the proposed new rule may do so at any Commission meeting during the agenda item relating to the proposed new rule. Information concerning the date, time, and location of Commission meetings is available by telephoning (512) 463-5800 or on the Texas Ethics Commission's website at www.ethics.state.tx.us.

The new rule §12.36 is proposed under Texas Government Code §571.062, which authorizes the Commission to adopt rules to administer Chapter 571 of the Government Code.

The proposed new rule §12.36 affects Subchapters E and F of Chapter 571 of the Government Code.

§12.36.Assessment of Civil Penalty.

(a) The commission shall consider the factors listed in section 571.177 of the Government Code when assessing a civil penalty against a respondent, including whether the respondent timely responds to written questions or subpoenas.

(b) The commission may consider the fine amounts established by chapter 18 of this title in determining the amount of a fine to be assessed in a sworn complaint proceeding.

(c) The commission is not required to waive the fine for a respondent who files a late or corrected report or makes a corrective action, but may consider the report or action to be a mitigating factor in determining the amount of any fine.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 12, 2017.

TRD-201705094

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: January 28, 2018

For further information, please call: (512) 463-5800


CHAPTER 18. GENERAL RULES CONCERNING REPORTS

1 TAC §18.27

The Texas Ethics Commission (the Commission) proposes the repeal of Texas Ethics Commission Rules §18.27, which will be incorporated into a new rule clarifying the factors that the Commission will consider when assessing a civil penalty in the sworn complaint (enforcement) process.

Current Commission Rule §18.27 states that the Commission may consider the fine amounts set out in Title 1, Chapter 18 when assessing a fine in the sworn complaint process. The Commission intends to adopt in Title 1, Chapter 12 a new rule, §12.36, which would incorporate the language from current rule §18.27 with revisions. Chapter 12 is a more appropriate location containing other rules related to sworn complaints, and thus current rule §18.27 will be repealed. Subsection (b) of §18.27 states that the Commission is not required to waive a fine when a respondent corrects a report, but the Commission may consider it a mitigating factor. That language would be moved to rule §12.36(c) and amended to state that filing a late report or making a corrective action could also be considered mitigating factors when assessing a fine.

Seana Willing, Executive Director, has determined that for the first five-year period the proposed repeal is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed repeal.

The Executive Director has determined that during the first five years that the proposed repeal is in effect, it will not: create or eliminate a government program; require the creation of new employee positions or the elimination of existing employee positions; require an increase or decrease in future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; create a new regulation; expand or limit an existing regulation; increase or decrease the number of individuals subject to the rule's applicability; or positively or adversely affects this state's economy. This rulemaking repeals an existing regulation.

The Executive Director has also determined that for each year of the first five years the proposed repeal is in effect the public benefit will be clarity in what factors the Commission may consider when assessing a civil penalty during the sworn complaint process. There will not be an effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the proposed repeal.

The Texas Ethics Commission invites comments on the proposed repeal from any member of the public. A written statement should be emailed to public_comment@ethics.state.tx.us, or mailed or delivered to Seana Willing, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070, or by facsimile (FAX) to (512) 463-5777. A person who wants to offer spoken comments to the Commission concerning the proposed repeal may do so at any Commission meeting during the agenda item relating to the proposed repeal. Information concerning the date, time, and location of Commission meetings is available by telephoning (512) 463-5800 or on the Texas Ethics Commission's website at www.ethics.state.tx.us.

The repeal of §18.27 is proposed under Texas Government Code §571.062, which authorizes the Commission to adopt rules to administer Chapter 571 of the Government Code.

The repeal of §18.27 affects Subchapters E and F of Chapter 571 of the Government Code.

§18.27.Sworn Complaints.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 12, 2017.

TRD-201705099

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: January 28, 2018

For further information, please call: (512) 463-5800