TITLE 1. ADMINISTRATION

PART 2. TEXAS ETHICS COMMISSION

CHAPTER 12. SWORN COMPLAINTS

SUBCHAPTER A. GENERAL PROVISIONS AND PROCEDURES

1 TAC §12.36

The Texas Ethics Commission (the Commission) proposes new Texas Ethics Commission Rule §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 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." The list of factors provides the Commission with significant discretion in imposing a civil penalty.

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. This serves to notify 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 include a slightly revised §18.27. Chapter 12 is a more appropriate location containing other rules related to sworn complaints. 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 subsection would be amended slightly 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.

Ms. Willing 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 §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 September 29, 2017.

TRD-201703960

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: November 12, 2017

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


1 TAC §12.37

The Texas Ethics Commission (the Commission) proposes new Texas Ethics Commission Rule §12.37, regarding dismissal of a complaint after public disclosure by a complainant.

Section 571.140 of the Government Code imposes a broad confidentiality on sworn complaints filed with the Commission and any information regarding complaint proceedings, including whether a complaint has actually been filed. The law provides criminal penalties for disclosure, but the Commission has stated in advisory opinions that, as required by the First Amendment of the United States Constitution, the law cannot prohibit a complainant or respondent from disclosing the fact that a complaint has been filed or from disclosing the resolution of the complaint. However, the dismissal of a complaint does not raise similar First Amendment concerns because a complainant is not a party to a complaint and a dismissal of a complaint is not a sanction, penalty, or enforcement action taken against a complainant.

The proposed new rule would further the Legislature's intent in enacting a broad confidentiality statute by authorizing the Commission to dismiss a sworn complaint, with prejudice, filed by a complainant who publicly discloses confidential information regarding the complaint. The new rule would not prohibit another individual from filing the same complaint or prohibit the Commission from voting to initiate a preliminary review of the same matter.

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.

Ms. Willing 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 sworn complaint process, including a clear incentive to complainants to maintain the confidentiality of sworn complaints pending before the Commission. 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 §12.37 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 §12.37 affects Subchapter E of Chapter 571 of the Government Code.

§12.37.Dismissal of Complaint After Public Disclosure.

If a complainant publicly discloses confidential information about a sworn complaint filed or to be filed by the complainant, the commission may dismiss the complaint with prejudice as to the complainant.

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 September 29, 2017.

TRD-201703961

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: November 12, 2017

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


SUBCHAPTER C. INVESTIGATION AND PRELIMINARY REVIEW

1 TAC §12.85

The Texas Ethics Commission (the commission) proposes an amendment to Texas Ethics Commission Rule §12.85, which sets procedures for preliminary review hearings.

Section 571.125 of the Government Code requires a preliminary review hearing if the Commission and a respondent cannot agree to the disposition of a complaint after a preliminary review, or if the respondent requests a hearing in writing. Rule §12.85 states that the executive director and respondent may present relevant evidence at a preliminary review hearing. The proposed amendment would change the rule to state that Commission staff may present such evidence as the executive director assists the Commission during hearings. The rule would also be amended to clarify that staff and a respondent may present an opening and closing statement at a preliminary review hearing.

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

Ms. Willing has also determined that for each year of the first five years the proposed amendment is in effect the public benefit will be clarity and fairness in the procedures for preliminary review hearings. 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 amendment.

The Texas Ethics Commission invites comments on the proposed amendment 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 amendment may do so at any commission meeting during the agenda item relating to the proposed amendment. 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 amendment to §12.85 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 amendment to §12.85 affects Subchapter E of Chapter 571 of the Government Code.

§12.85.Preliminary Review Hearing.

(a) Commission staff [The executive director] and the respondent may present any relevant evidence at a preliminary review hearing, including examination and cross-examination of witnesses.

(b) Commission staff and the respondent may present an opening and closing statement at a preliminary review hearing.

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 September 29, 2017.

TRD-201703962

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: November 12, 2017

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


1 TAC §12.87

The Texas Ethics Commission (the commission) proposes an amendment to Texas Ethics Commission Rules §12.87, which sets procedures for preliminary review hearings.

Section 571.125 of the Government Code requires a preliminary review hearing if the Commission and a respondent cannot agree to the disposition of a complaint after a preliminary review, or if the respondent requests a hearing in writing. Section 571.1244 requires the Commission to adopt procedures for the conduct of preliminary review hearings. Ethics Commission Rules §12.87 would be amended to codify the process after the Commission determines there is credible evidence of a violation following a preliminary review hearing.

The rule also clarifies that the Commission's authority to agree to the settlement of a complaint is not limited by the rule. This allows the Commission to send revised proposed orders to a respondent or reach an agreement with a respondent at any time.

Currently, §12.87 requires a complaint to be dismissed if the Commission does not "issue a decision under section 571.126 of the Government Code" within 180 days after a preliminary review hearing. The amendment would simply require dismissal if no formal hearing is ordered within 180 days after a preliminary review hearing concludes. The executive director could also extend that deadline under existing rules.

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

Ms. Willing has also determined that for each year of the first five years the proposed amendment is in effect the public benefit will be clarity and fairness in the procedures for preliminary review hearings. 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 amendment.

The Texas Ethics Commission invites comments on the proposed amendment 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 amendment may do so at any Commission meeting during the agenda item relating to the proposed amendment. 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 amendment to §12.87 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 amendment to §12.87 affects Subchapter E of Chapter 571 of the Government Code.

§12.87.Resolution of Preliminary Review Hearing.

(a) At the conclusion of a preliminary review hearing in which the commission finds credible evidence of a violation:

(1) commission staff shall send to the respondent a proposed resolution within 10 days; and

(2) not later than 30 days after the respondent receives the proposed resolution, or by a later date determined by the commission, commission staff must receive from the respondent:

(A) the proposed resolution signed by the respondent;

(B) a written counter offer; or

(C) a written request that the matter be set for a formal hearing.

(b) If the respondent does not comply with subsection (a)(2) of this section, commission staff may request that the commission order a formal hearing.

(c) Commission staff shall report to the commission any written counter offer, staff's recommendation to accept or reject a counter offer, if any, or any written request that a matter be set for a formal hearing received from the respondent under subsection (a)(2) of this section.

(d) After a written counter offer or a written request that a matter be set for a formal hearing is reported to the commission, the commission by record vote of at least six commissioners shall:

(1) accept the respondent's counter offer, if any; or

(2) determine the complaint cannot be resolved and settled and order a formal hearing.

(e) The executive director shall dismiss a complaint if the commission does not order a formal hearing [fails to issue a decision under section 571.126 of the Government Code] within 180 days after the conclusion of a preliminary review hearing.

(f) This section may not be construed as limiting the commission's authority to agree to the settlement of a complaint under section 571.121 of the Government Code, including sending a revised proposed resolution to a respondent.

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 September 29, 2017.

TRD-201703963

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: November 12, 2017

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 Rule §18.27, which will be incorporated into a new rule clarifying the facts that the Commission will consider when assessing a civil penalty in the sworn complaint (enforcement) process.

Section 571.177 of the Government Code lists the factors that the Commission shall consider when assessing a civil penalty in the sworn complaint 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 include a slightly revised §18.27. Chapter 12 is a more appropriate location containing other rules related to sworn complaints.

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 repealed rule.

Ms. Willing 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 September 29, 2017.

TRD-201703967

Seana Willing

Executive Director

Texas Ethics Commission

Earliest possible date of adoption: November 12, 2017

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