Proposed Rules Title 16

TITLE 16. ECONOMIC REGULATION

PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 60. PROCEDURAL RULES OF THE COMMISSION AND THE DEPARTMENT

The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 60, Subchapter A, §60.10; Subchapter F, §60.82; Subchapter G, §60.101; Subchapter I, §§60.300, 60.304, 60.305, 60.307, 60.308, and 60.310; and Subchapter J, §§60.400 - 60.406, 60.408, and 60.409; proposes new rules at Subchapter H, §§60.200 - 60.204; Subchapter I, §§60.301, 60.302, 60.309, 60.311, and 60.312; and proposes the repeal of existing rules at Subchapter H, §60.200; and Subchapter I, §60.306 and §60.311, regarding the Procedural Rules of the Commission and the Department. These proposed changes are referred to as "proposed rules."

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

The rules under 16 TAC Chapter 60 implement Texas Occupations Code, Chapter 51, the enabling statute of the Texas Commission of Licensing and Regulation (Commission) and the Department, and other laws applicable to the Commission and the Department.

The Chapter 60 rules are the procedural rules of the Commission and the Department. These rules apply to all of the agency's programs and to all license applicants and licensees, except where there is a conflict with the statutes and rules of a specific program.

The proposed rules update multiple subchapters and sections under Chapter 60 and are part of a larger effort to update the entire chapter. The proposed rules make substantive and clean-up changes to the agency's procedural rules and include changes resulting from staff and strategic planning, the required four-year rule review, and the Department's Sunset legislation.

Staff and Strategic Planning Changes

The proposed rules include changes suggested by the General Counsel's Office and suggested during past strategic planning sessions. The changes include updates to the rules regarding definitions and complaints; reorganization of existing rules; clean up changes in terminology; and editorial changes to "Commission," "Department," and "Executive Director" to use lower case terminology to be consistent with the statutes and consistent across the Chapter 60 rule subchapters.

Four-Year Rule Review Changes

The proposed rules also include changes as a result of the required four-year rule review conducted under Texas Government Code §2001.039. The Department conducted the required rule review of the rules under 16 TAC Chapter 60, and the Commission readopted the rule chapter in its entirety and in its current form. (Proposed Rule Review, 46 TexReg 2589, April 16, 2021. Adopted Rule Review, 46 TexReg 4701, July 30, 2021.)

In response to the Notice of Intent to Review that was published, the Department received public comments from six interested parties regarding Chapter 60, with one of these interested parties commenting on the complaint rule under Subchapter H. The interested party commented that the rules do not include timeframes for resolving complaints and that the complaint process takes too long. The Department did not propose any changes to the rules based on this public comment. Texas Occupations Code §51.252 states that the Department "shall maintain a system to promptly and efficiently act on complaints," and §51.2521 states that the Department "shall assign priorities and investigate complaints based on risk to the public of the conduct alleged in the complaint." There are internal processes and timeframes, priority of violations, case specific issues, and performance measures that effect the timing for complaint resolution. The Department did not include any timeframes for complaint resolution in the proposed rules.

The proposed rules include changes identified by Department staff during the rule review process. The changes are reflected throughout the proposed rules and include updates to the rules regarding definitions, fees, complaints, contested cases, and mediation for contested cases. The changes also include clarifying the rules, using plain talk language, and making the same editorial changes to use lower case terminology.

Sunset Bill Statutory Changes

The proposed rules incorporate and reflect the changes made to Texas Occupations Code, Chapter 51, as a result of House Bill (HB) 1560, 87th Legislature, Regular Session (2021), the Department's Sunset legislation. HB 1560, Article 1, Sections 1.06, 1.07, and 1.08, amended and added provisions in Chapter 51 regarding complaints, specifically under §§51.251, 51.252, and 51.2521. The proposed rules under Subchapter H incorporate and reflect the amended and new statutory provisions regarding complaints.

The proposed rules are necessary to: update the terminology and definitions; align the dishonored payment processing fee with statutory requirements; add a statutory reference regarding negotiated rulemaking; add additional rules regarding complaints; update and reflect the current processes and procedures for contested cases; clarify the existing rules regarding mediation for contested cases; and reorganize and clean up existing rules where necessary. The Department expects to propose additional changes to Chapter 60 in the future in separate rulemakings.

SECTION-BY-SECTION SUMMARY

Subchapter A. General Provisions.

The proposed rules amend §60.10. Definitions. The proposed rules amend the terms and definitions to align with applicable statutes; to provide additional information and clarity; to designate the General Counsel or the General Counsel's designee as the "ADR Administrator"; to relocate certain provisions elsewhere in the rule chapter; to make various clean-up changes; and to make editorial changes to use lower case terminology. The proposed rules also remove unnecessary or unused terms and renumber the remaining terms as necessary.

Subchapter F. Fees.

The proposed rules amend §60.82. Dishonored Payment Device. The proposed rules change the title of the section to "Dishonored Payment Fee." The proposed rules lower the dishonored payment processing fee from $50 to $30 to align with Business and Commerce Code §3.506, Processing Fee by Holder of Payment Device, and with the Texas Comptroller Manual of Accounts regarding revenues and returned check fees. The proposed rules replace the definition of "payment device" under §60.10, which is being repealed, with an explanation of authorized forms or methods of payment and dishonored payments. The proposed rules restructure the existing rule; use plain talk language to improve readability and understanding; and make editorial changes to use lower case terminology.

Subchapter G. Rulemaking.

The proposed rules amend §60.101. Negotiated Rulemaking. The existing rule implements Texas Occupations Code §51.208, Negotiated Rulemaking and Alternative Dispute Resolution Procedures, as it relates to negotiated rulemaking. The proposed rules add the statutory reference for context and clarification that the statutory requirement has been implemented through this rule.

Subchapter H. Complaint Handling

Subchapter H is amended to add additional rules regarding complaints. The proposed rules change the title of Subchapter H to "Complaints; Inspections" to reflect the scope of the subchapter.

The proposed rules repeal existing §60.200. Complaints. The repealed provisions are relocated to and replaced with new §60.200 and new §60.201.

The proposed rules add new §60.200. Notice to the Public Regarding Complaints. The new rule includes provisions that replace those found in existing §60.200, which is being repealed. The new rule requires a license holder to notify consumers and service recipients of the Department's name, address, phone number, and website address for purposes of filing complaints; specifies how and where this notification must be provided, unless stated otherwise in the program statutes or rules; and provides that information will be made available on the Department's website describing the procedures for filing complaints and for complaint investigation and resolution.

The proposed rules add new §60.201. Filing a Complaint. The new rule includes provisions that replace those found in existing §60.200, which is being repealed. The new rule explains the process and timing for filing a complaint against a person who is engaged in an activity or business regulated by the Department and the Department's handling of anonymous complaints.

The proposed rules add new §60.202. Investigation and Priority of Complaints. The new rule explains the Department's responsibilities regarding promptly and efficiently acting on complaints; assigning priorities and investigating complaints based on risk to the public; and dismissing complaints that are inappropriate or without merit.

The proposed rules add new §60.203. Cooperation with Investigation of Complaints. The new rule requires a person to cooperate in a Department investigation of a complaint and to make available all records, notices, and other documents requested by the Department. The new rule also lists prohibited actions in connection with a Department investigation.

The proposed rules add new §60.204. Status and Confidentiality of Complaints. The new rule addresses when the Department will provide the status of a complaint and the requirements on the Department to maintain confidentiality of certain complaints.

Subchapter I. Contested Cases.

Subchapter I is amended to reflect the current processes and procedures for contested cases. New rules are added, and existing rules are amended and reorganized, so that the rules set out the procedural steps in the contested case process. These rules are necessary to comply with Texas Government Code, Chapter 2001, and Texas Occupations Code, Chapter 51, Subchapters F and G.

The proposed rules amend existing §60.300. Purpose and Scope. The proposed rules make technical clean-up changes to the statutory references.

The proposed rules add new §60.301. Notice of Alleged Violation; Notice of Continued License Restrictions. The new rule is relocated in part from existing §60.306, which is being repealed. The new rule reflects the current processes and procedures with updates and clarifications for the notice of alleged violation and the notice of continued license restrictions, and it includes information on requesting a hearing.

The proposed rules add new §60.302. Notice of Proposed Denial. The new rule is relocated in part from existing §60.306, which is being repealed. The new rule reflects the current processes and procedures with updates and clarifications for the notice of proposed denial, and includes information on requesting a hearing.

The proposed rules amend existing §60.304. Disposition by Agreement. The proposed rules update the terminology for consistency purposes.

The proposed rules amend existing §60.305. Place and Nature of Hearings. The proposed rules change the title of the rule to "Contested Case Hearings at SOAH" to reflect the scope of the rule. The proposed rules provide references to SOAH's procedures and information about the Department's contested case hearings at SOAH.

The proposed rules repeal existing §60.306. Request for Hearing and Defaults. The provisions from this repealed rule have been separated into two new rules, §60.301 and §60.302, and relocated in the subchapter so they are in procedural order in the contested case process.

The proposed rules amend existing rule §60.307. Hearing Costs. The proposed rules change the title of the section to "Costs Associated with a Contested Case" to reflect the scope of the rule. The proposed rules clarify the existing provision under subsection (a), regarding costs associated with making the SOAH hearing record, and align the provision with SOAH rule 1 TAC §155.423. The proposed rules amend the existing provision under subsection (b), regarding costs associated with contested case transcripts, and align the provision with Texas Government Code §2001.059. The proposed rules add a new provision under new subsection (c) to address other possible costs associated with the contested case.

The proposed rules amend §60.308. Proposals for Decision. The proposed rules add new subsection (b) that reflects the current procedures for proposals for decision that are considered by the Commission during a Commission meeting. The proposed rules state that a party may only present the sworn testimony and the information provided during the SOAH hearing or admitted into the SOAH record.

The proposed rules add new §60.309. Motion for Rehearing. The new rule reflects the current processes and procedures for filing and handling a motion for rehearing, and it provides the requirements for the contents of the motion for rehearing.

The proposed rules amend existing §60.310. Final Orders. The proposed rules add a provision to address when a contested case decision or order is final under the Administrative Procedure Act (APA). The proposed rules also remove the provision regarding appeals and costs and relocate that provision to new §60.311.

The proposed rules add new §60.311. Appeal of Final Order. The new rule reflects the current processes and procedures for appealing a final decision or order in a contested case. The new rule provides that the appeal shall be filed and handled in accordance with the APA. The new rule also adds the provision regarding appeals and costs that is relocated from existing §60.310.

The proposed rules repeal existing §60.311. Corrected Orders. The repealed provision has been relocated to new §60.312.

The proposed rules add new §60.312. Corrected Orders. The new rule includes the provision from existing §60.311, which is being repealed.

Subchapter J, Mediation for Contested Cases.

Subchapter J is amended to clarify and make clean-up changes to the existing rules regarding mediation for contested cases. The existing rules in this subchapter implement Texas Occupations Code §51.208, Negotiated Rulemaking and Alternative Dispute Resolution Procedures, as it relates to alternative dispute resolution procedures for contested cases, and Texas Government Code Chapter 2009, Alternative Dispute Resolution for Use by Governmental Bodies.

The proposed rules amend existing §60.400. Alternative Dispute Resolution--Mediation. The proposed rules change the title of the section to "Alternative Dispute Resolution Procedures--Mediation" for clarification. The proposed rules add statutory references for context and clarification that the statutory requirements and provisions have been implemented through the rules in this subchapter. The proposed rules also add an explanation about alternative dispute resolution procedures and the use of mediation; separate the existing section into separate subsections to improve readability; update a cross-reference to Subchapter I; make clarifications and clean-up changes; and make an editorial change to use lower case terminology.

The proposed rules amend existing §60.401. Referral of Contested Matter for Mediation. The proposed rules make editorial changes to use lower case terminology.

The proposed rules amend existing §60.402. Appointment of Mediator. The proposed rules change the title of the section to "Appointment of Mediator; Mediator Costs" to reflect the scope of the rule. The proposed rules make clarifications and clean-up changes regarding the appointment of a mediator.

The proposed rules amend existing §60.403. Qualifications of Mediators. The proposed rules change the title of the section to "Qualifications, Standards, and Role of the Mediator" to reflect the scope of the rule. The proposed rules make clean-up changes; add a specific statutory reference regarding the mediation training; include information regarding the role of the mediator that has been relocated from the definition of mediator in §60.10; and add additional information regarding the role of the mediator that reflects the provisions in Texas Civil Practices and Remedies Code §154.053 and the SOAH guidelines on mediation.

The proposed rules amend existing §60.404. Disqualifications of Mediators. The proposed rules change the title of the section to "Disqualification of the Mediator." The proposed rules make an editorial change to use lower case terminology and make a clarification to the existing provisions.

The proposed rules amend existing §60.405. Qualified Immunity of the Mediator. The proposed rules make a technical correction to a statutory reference.

The proposed rules amend existing §60.406. Commencement of Mediation. The proposed rules make editorial changes to use lower case terminology; make clean-up changes to terminology; and include updated references to the notices discussed under Subchapter I.

The proposed rules amend existing §60.408. Agreements. The proposed rules make editorial changes to use lower case terminology.

The proposed rules amend existing §60.409. Confidentiality. The proposed rules make clarification changes to the existing provisions regarding the confidentiality of the mediation communications and documents.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

State Government

Tony Couvillon, Policy Research and Budget Analyst, has determined that for each year of the first five years the proposed rules are in effect, there are no estimated additional costs or reductions in costs to the State as a result of enforcing or administering the proposed rules.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, there is no estimated increase in revenue to the State as a result of enforcing or administering the proposed rules.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, there is an estimated loss in revenue to the State of approximately $2,900 annually. This loss is a result of the decrease in the processing fee for a dishonored payment from $50 to $30.

Local Government

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, there are no estimated additional costs or reductions in costs to local government as a result of enforcing or administering the proposed rules.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, there is no estimated increase or loss in revenue to local government as a result of enforcing or administering the proposed rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

Mr. Couvillon has determined that the proposed rules will not affect a local economy, so the agency is not required to prepare a local employment impact statement under Government Code §2001.022.

PUBLIC BENEFITS

Mr. Couvillon has determined that for each year of the first five-year period the proposed rules are in effect, the public benefit will be having procedural rules that provide greater clarity to license holders, the public, and others who may be subject to the rules. The proposed rules more accurately reflect the current procedures, which provides better notification to the public and license holders of those procedures. The proposed rules also reduce the processing fee for a dishonored payment, which will be less cost for the person whose payment was dishonored. In addition, the proposed rules require cooperation with the Department's investigation of complaints, which could aid in quicker investigation and resolution of complaints.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Couvillon has determined that for each year of the first five-year period the proposed rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules. None of the changes made by the proposed rules will impose a cost on any licensee, member of the public, or business. The reduction of the processing fee for a dishonored payment will reduce the cost for a person whose payment is dishonored.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules. Because the agency has determined that the proposed rule will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, are not required.

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

The proposed rules do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Government Code §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Government Code §2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rules. For each year of the first five years the proposed rules will be in effect, the agency has determined the following:

1. The proposed rules do not create or eliminate a government program.

2. Implementation of the proposed rules does not require the creation of new employee positions or the elimination of existing employee positions.

3. Implementation of the proposed rules does not require an increase or decrease in future legislative appropriations to the agency.

4. The proposed rules require an increase or decrease in fees paid to the agency. The proposed rules decrease the fees paid to the agency by decreasing the processing fee for a dishonored payment.

5. The proposed rules create a new regulation. The proposed rules create new regulations regarding complaints, motions for rehearing, and appeals of final orders.

6. The proposed rules expand, limit, or repeal an existing regulation. The proposed rules expand existing regulations regarding the procedures and requirements for dishonored payments; the notices issued in contested cases; the costs associated with contested cases; and mediation for contested cases.

7. The proposed rules do not increase or decrease the number of individuals subject to the rules' applicability.

8. The proposed rules do not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

The Department has determined that no private real property interests are affected by the proposed rules and the proposed rules do not restrict, limit, or impose a burden on an owner's rights to his or her private real property that would otherwise exist in the absence of government action. As a result, the proposed rules do not constitute a taking or require a takings impact assessment under Government Code §2007.043.

PUBLIC COMMENTS

Comments on the proposed rules may be submitted electronically on the Department's website at https://ga.tdlr.texas.gov:1443/form/gcerules; by facsimile to (512) 475-3032; or by mail to Monica Nuñez, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. The deadline for comments is 30 days after publication in the Texas Register.

SUBCHAPTER A. GENERAL PROVISIONS

16 TAC §60.10

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapter 51, which authorizes the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement that chapter and any other law establishing a program regulated by the Department.

In addition, the proposed rules are proposed under the authority of other state laws that apply to state agencies. These laws include Texas Occupations Code, Chapters 53, 55 and 108 (Subchapter B); Texas Government Code, Chapters 411, 551, 552, 656 (Subchapter C), 661 (Subchapter A), 2001, 2005, 2008, 2009, and 2110; Civil Practice and Remedies Code, Chapter 154; and Family Code, Chapters 231 and 232.

The statutory provisions affected by the proposed rules are those set forth in Texas Occupations Code, Chapter 51, and the program statutes for all the Department programs: Agriculture Code, Chapter 301 (Weather Modification and Control); Education Code, Chapter 1001 (Driver and Traffic Safety Education); Government Code, Chapters 171 (Court-Ordered Programs); and 469 (Elimination of Architectural Barriers); Health and Safety Code, Chapters 401, Subchapter M (Laser Hair Removal); 754 (Elevators, Escalators, and Related Equipment); and 755 (Boilers); Labor Code, Chapter 91 (Professional Employer Organizations); Occupations Code, Chapters 202 (Podiatrists); 203 (Midwives); 401 (Speech-Language Pathologists and Audiologists); 402 (Hearing Instrument Fitters and Dispensers); 403 (Dyslexia Practitioners and Therapists); 451 (Athletic Trainers); 455 (Massage Therapy); 506 (Behavioral Analysts); 605 (Orthotists and Prosthetists); 701 (Dietitians); 802 (Dog or Cat Breeders); 1151 (Property Tax Professionals); 1152 (Property Tax Consultants); 1202 (Industrialized Housing and Buildings); 1302 (Air Conditioning and Refrigeration Contractors); 1304 (Service Contract Providers and Administrators); 1305 (Electricians); 1603 (Barbers and Cosmetologists); 1802 (Auctioneers); 1901 (Water Well Drillers); 1902 (Water Well Pump Installers): 1952 (Code Enforcement Officers); 1953 (Sanitarians); 1958 (Mold Assessors and Remediators); 2052 (Combative Sports); 2303 (Vehicle Storage Facilities); 2308 (Vehicle Towing and Booting); 2309 (Used Automotive Parts Recyclers); 2310 (Motor Fuel Metering and Quality); and 2402 (Transportation Network Companies); and Transportation Code, Chapters 551A (Off-Highway Vehicle Training and Safety); and 662 (Motorcycle Operator Training and Safety).

In addition, the statutory provisions affected by the proposed rules are those set forth in Texas Occupations Code, Chapters 53, 55, and 108 (Subchapter B); Texas Government Code, Chapters 411 (Subchapter F), 551, 552, 656 (Subchapter C), 661 (Subchapter A), 2001, 2005, 2008, 2009, and 2110; Civil Practice and Remedies Code, Chapter 154; and Family Code, Chapters 231 and 232. No other statutes, articles, or codes are affected by the proposed rules.

§60.10.Definitions.

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Advisory Board--A board, committee, council, or other entity with multiple members that has as its primary function advising the commission or the department [~~body that is established by law to advise the Commission or Department on rules, policies, and/or technical matters~~].

(2) (No change.)

(3) Alternative Dispute Resolution (ADR) Administrator--The trained coordinator designated by the commission to coordinate and oversee the negotiated rulemaking and ADR procedures used by the department; to serve as a resource for any training needed to implement the negotiated rulemaking and ADR procedures; and to collect data concerning the effectiveness of the negotiated rulemaking and ADR procedures. The ADR Administrator also may conduct ADR proceedings, serve as a mediator, or appoint other persons to serve as mediators. The department's general counsel or the general counsel's designee is designated by the commission to serve as the ADR Administrator. [~~Commission:~~]

~~[(A) to coordinate and oversee the negotiated rulemaking and ADR procedures used by the Department;]~~

~~[(B) to serve as a resource for any training needed to implement the negotiated rulemaking and ADR procedures; and]~~

~~[(C) to collect data concerning the effectiveness of the negotiated rulemaking and ADR procedures. The ADR Administrator also may conduct ADR proceedings.]~~

(4) Alternative Dispute Resolution (ADR) Procedures or Process--The umbrella term that includes different types of alternative [~~Alternative~~] processes to judicial forums or administrative agency contested case proceedings for the voluntary settlement of contested matters through the facilitation of an impartial third-party. Mediation is one type of alternative dispute resolution (ADR) process.

(5) APA--The Administrative Procedure Act, [(]Texas Government Code, Chapter 2001[)].

(6) Applicant--Any person seeking a license from the department [~~Department~~].

(7) (No change.)

(8) Complainant--Any person who has filed a complaint with the department [~~Department~~] against any person whose activities are subject to the jurisdiction of the commission and the department [~~Department~~].

(9) Contested case [~~or proceeding~~]--A proceeding, including a licensing proceeding, in which the legal rights, duties, or privileges of a party are to be determined by the commission or the executive director [~~Commission and/or Executive Director~~] after an opportunity for adjudicative hearing.

(10) (No change.)

(11) Director of Enforcement--The person who directs and oversees investigations, prosecutions, and other activities of the enforcement division of the department [~~Texas Department of Licensing and Regulation~~].

(12) (No change.)

(13) Executive Director--The head administrative official of the department [~~Texas Department of Licensing and Regulation~~].

~~[(14) Final Decision Maker--The Commission and/or the Executive Director], both of whom are authorized by law to render the final decision in a contested case.]~~

(14) [~~(15)~~] License--A license, certificate, registration, title, commission, or permit issued by the department [~~Department~~].

(15) [~~(16)~~] License holder--A person who holds a license issued by the department [~~Department~~].

(16) [~~(17)~~] Mediation--A confidential, informal dispute resolution process in which an impartial person, the mediator, facilitates communication between or among the parties to promote reconciliation, settlement, or understanding among them. Mediation is one type of alternative dispute resolution (ADR) process.

(17) [~~(18)~~ ] Mediator--The impartial person who presides over a mediation. [~~The mediator shall encourage and assist the parties in reaching a settlement but may not compel or coerce the parties to enter into a settlement agreement.~~] The mediator may be a department [~~Department~~] employee, an employee from another Texas state agency, or a person in the mediation profession who is not a Texas state employee [~~("private mediator")~~].

(18) [~~(19)~~] Negotiated Rulemaking--A consensus-based process prescribed under Texas Government Code, Chapter 2008, in which the department [~~Department~~] develops a proposed rule by using a neutral facilitator and a balanced negotiating committee composed of representatives of all interests that the rule will affect including those interests represented by the department [~~Department~~] itself. [~~See Negotiated Rulemaking Act, Texas Government Code, Chapter 2008.~~]

(19) [~~(20)~~] Party--A person or state agency named or admitted as a party to participate in a contested case.

~~[(21) Payment Device--Any check, item, paper or electronic payment, or other payment method used as a medium for payment.]~~

(20) [~~(22)~~] Penalty or Administrative Penalty--A monetary fine imposed by the commission or the executive director on a license holder [~~licensee~~] or other person who has violated this chapter or a statute or rule governing a program regulated by the department.

(21) [~~(23)~~] Person--Any individual, partnership, corporation, organization, association, or other legal entity, including a state agency or governmental subdivision.

[(24) Pleading--A written document submitted by a party, or a person seeking to participate in a case as a party, which requests procedural or substantive relief, makes claims, alleges facts, makes legal argument, or otherwise addresses matters involved in the case.]

(22) [~~(25)~~] Presiding Officer--The commission [~~Commission~~] member designated by the Governor to serve as the lead commission [~~Commission~~] official as defined under Texas Occupations Code[, ] §51.056.

(23) [~~(26)~~] Respondent--Any person, regardless of whether the person is licensed or unlicensed, who is charged with violating a law establishing a regulatory program administered by the department or a rule adopted by or an order issued by the commission or the executive director.

(24) [~~(27)~~] Rule--Any commission [~~Commission~~] statement of general applicability that implements, interprets, or prescribes law or policy, or describes the procedure or practice requirements of the [~~department or~~] commission or the department.

(25) [~~(28)~~] Sanction--An action by the commission or executive director against a license holder or another person, including the denial, suspension, or revocation of a license, the reprimand of a license holder, the placement of a license holder on probation, or refusal to renew.

(26) [~~(29)~~] SOAH--State Office of Administrative Hearings.

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 February 17, 2023.

TRD-202300809

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879

SUBCHAPTER F. FEES

16 TAC §60.82

STATUTORY AUTHORITY.

The proposed rule is proposed under Texas Occupations Code, Chapter 51, which authorizes the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement that chapter and any other law establishing a program regulated by the Department.

In addition, the proposed rule is proposed under the authority of other state laws that apply to state agencies. These laws include Texas Occupations Code, Chapters 53, 55 and 108 (Subchapter B); Texas Government Code, Chapters 411, 551, 552, 656 (Subchapter C), 661 (Subchapter A), 2001, 2005, 2008, 2009, and 2110; Civil Practice and Remedies Code, Chapter 154; and Family Code, Chapters 231 and 232.

The statutory provisions affected by the proposed rule is are those set forth in Texas Occupations Code, Chapter 51, and the program statutes for all the Department programs: Agriculture Code, Chapter 301 (Weather Modification and Control); Education Code, Chapter 1001 (Driver and Traffic Safety Education); Government Code, Chapters 171 (Court-Ordered Programs); and 469 (Elimination of Architectural Barriers); Health and Safety Code, Chapters 401, Subchapter M (Laser Hair Removal); 754 (Elevators, Escalators, and Related Equipment); and 755 (Boilers); Labor Code, Chapter 91 (Professional Employer Organizations); Occupations Code, Chapters 202 (Podiatrists); 203 (Midwives); 401 (Speech-Language Pathologists and Audiologists); 402 (Hearing Instrument Fitters and Dispensers); 403 (Dyslexia Practitioners and Therapists); 451 (Athletic Trainers); 455 (Massage Therapy); 506 (Behavioral Analysts); 605 (Orthotists and Prosthetists); 701 (Dietitians); 802 (Dog or Cat Breeders); 1151 (Property Tax Professionals); 1152 (Property Tax Consultants); 1202 (Industrialized Housing and Buildings); 1302 (Air Conditioning and Refrigeration Contractors); 1304 (Service Contract Providers and Administrators); 1305 (Electricians); 1603 (Barbers and Cosmetologists); 1802 (Auctioneers); 1901 (Water Well Drillers); 1902 (Water Well Pump Installers): 1952 (Code Enforcement Officers); 1953 (Sanitarians); 1958 (Mold Assessors and Remediators); 2052 (Combative Sports); 2303 (Vehicle Storage Facilities); 2308 (Vehicle Towing and Booting); 2309 (Used Automotive Parts Recyclers); 2310 (Motor Fuel Metering and Quality); and 2402 (Transportation Network Companies); and Transportation Code, Chapters 551A (Off-Highway Vehicle Training and Safety); and 662 (Motorcycle Operator Training and Safety).

In addition, the statutory provisions affected by the proposed rule is are those set forth in Texas Occupations Code, Chapters 53, 55, and 108 (Subchapter B); Texas Government Code, Chapters 411 (Subchapter F), 551, 552, 656 (Subchapter C), 661 (Subchapter A), 2001, 2005, 2008, 2009, and 2110; Civil Practice and Remedies Code, Chapter 154; and Family Code, Chapters 231 and 232. No other statutes, articles, or codes are affected by the proposed rule.

§60.82.Dishonored Payment Fee [~~Device~~].

(a) This section applies to any authorized form or method of payment that is issued to the department by an applicant, a license holder, or other person for payment of any required fees or administrative penalties and that is dishonored.

(1) An authorized form or method of payment may include, but is not limited to, a check, credit card, item, paper or electronic payment, electronic funds transfer, or other payment instrument.

(2) A dishonored payment means a payment that is declined or not approved for payment upon presentment to a financial institution.

(b) If a payment issued to the department is dishonored, the department shall charge a processing fee of $30 to the person who submitted the dishonored payment. This processing fee is in addition to the amount of the original payment submitted to the department that was dishonored.

(c) The department will notify the applicant, license holder, or other person by certified mail that the payment has been dishonored. The applicant, license holder, or other person must pay the required processing fee and the amount of the original payment submitted to the department within 15 days after receipt of notice of the dishonored payment.

(d) If the applicant, license holder, or other person does not pay the processing fee and the amount of the original payment submitted to the department within the required time period, it is a violation of this chapter. The applicant or license holder is subject to administrative enforcement proceedings, including license denial or revocation, and collections proceedings. Other persons are subject to collections proceedings.

[If a payment device issued to the department is dishonored by a payor, the department shall charge a fee of $50 to the issuer or endorser for processing the dishonored payment device. The department shall notify the obligor, issuer, or endorser of the fee by sending a request for payment of the dishonored payment device and the processing fee by certified mail to the last known address of the person or licensee as shown in the records of the department. If the department has sent a request for payment in accordance with the provisions of this section, the failure of the obligor, issuer, or endorser to pay the processing fee within 15 days after the department has mailed the request is a violation of this chapter and subjects the licensee and the person to administrative enforcement proceedings including license revocation.]

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 February 17, 2023.

TRD-202300810

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879

SUBCHAPTER G. RULEMAKING

16 TAC §60.101

STATUTORY AUTHORITY.

§60.101.Negotiated Rulemaking.

(a) Pursuant to Texas Occupations Code §51.208, it [It] is the commission's policy to engage in negotiated rulemaking procedures under Texas Government Code, Chapter 2008, when appropriate. When the commission finds that proposed rules are likely to be complex, or controversial, or to affect disparate groups, negotiated rulemaking may be proposed.

(b) When negotiated rulemaking is proposed, the commission will appoint a convener to assist in determining whether it is advisable to proceed. The convener shall perform the duties and responsibilities contained in Texas Government Code, Chapter 2008.

(c) If the convener recommends proceeding with negotiated rulemaking and the commission adopts the recommendation, the department shall initiate negotiated rulemaking according to the provisions of Texas Government Code, Chapter 2008.

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 February 17, 2023.

TRD-202300811

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879

SUBCHAPTER H. COMPLAINT HANDLING

16 TAC §60.200

The proposed repeals are proposed under Texas Occupations Code, Chapter 51, which authorizes the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement that chapter and any other law establishing a program regulated by the Department.

In addition, the proposed repeals are proposed under the authority of other state laws that apply to state agencies. These laws include Texas Occupations Code, Chapters 53, 55 and 108 (Subchapter B); Texas Government Code, Chapters 411, 551, 552, 656 (Subchapter C), 661 (Subchapter A), 2001, 2005, 2008, 2009, and 2110; Civil Practice and Remedies Code, Chapter 154; and Family Code, Chapters 231 and 232.

The statutory provisions affected by the proposed repeals are those set forth in Texas Occupations Code, Chapter 51, and the program statutes for all the Department programs: Agriculture Code, Chapter 301 (Weather Modification and Control); Education Code, Chapter 1001 (Driver and Traffic Safety Education); Government Code, Chapters 171 (Court-Ordered Programs); and 469 (Elimination of Architectural Barriers); Health and Safety Code, Chapters 401, Subchapter M (Laser Hair Removal); 754 (Elevators, Escalators, and Related Equipment); and 755 (Boilers); Labor Code, Chapter 91 (Professional Employer Organizations); Occupations Code, Chapters 202 (Podiatrists); 203 (Midwives); 401 (Speech-Language Pathologists and Audiologists); 402 (Hearing Instrument Fitters and Dispensers); 403 (Dyslexia Practitioners and Therapists); 451 (Athletic Trainers); 455 (Massage Therapy); 506 (Behavioral Analysts); 605 (Orthotists and Prosthetists); 701 (Dietitians); 802 (Dog or Cat Breeders); 1151 (Property Tax Professionals); 1152 (Property Tax Consultants); 1202 (Industrialized Housing and Buildings); 1302 (Air Conditioning and Refrigeration Contractors); 1304 (Service Contract Providers and Administrators); 1305 (Electricians); 1603 (Barbers and Cosmetologists); 1802 (Auctioneers); 1901 (Water Well Drillers); 1902 (Water Well Pump Installers): 1952 (Code Enforcement Officers); 1953 (Sanitarians); 1958 (Mold Assessors and Remediators); 2052 (Combative Sports); 2303 (Vehicle Storage Facilities); 2308 (Vehicle Towing and Booting); 2309 (Used Automotive Parts Recyclers); 2310 (Motor Fuel Metering and Quality); and 2402 (Transportation Network Companies); and Transportation Code, Chapters 551A (Off-Highway Vehicle Training and Safety); and 662 (Motorcycle Operator Training and Safety).

In addition, the statutory provisions affected by the proposed repeals are those set forth in Texas Occupations Code, Chapters 53, 55, and 108 (Subchapter B); Texas Government Code, Chapters 411 (Subchapter F), 551, 552, 656 (Subchapter C), 661 (Subchapter A), 2001, 2005, 2008, 2009, and 2110; Civil Practice and Remedies Code, Chapter 154; and Family Code, Chapters 231 and 232. No other statutes, articles, or codes are affected by the proposed repeals.

§60.200.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 February 17, 2023.

TRD-202300816

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879

SUBCHAPTER H. COMPLAINT HANDLING

16 TAC §§60.200 - 60.204

STATUTORY AUTHORITY.

§60.200.Notice to the Public Regarding Complaints.

(a) A license holder is required to notify consumers and service recipients of the department's name, mailing address, telephone number, and website address for purposes of directing complaints to the department.

(b) Unless prescribed otherwise in the statutes or rules governing a specific program regulated by the commission and the department, the notification required under subsection (a) shall be included on:

(1) a written contract (paper or electronic) for services of a license holder;

(2) a sign prominently displayed in the license holder's place of business if consumers or service recipients must visit the license holder's place of business for services or products; and

(3) a bill (paper or electronic) for services provided by a license holder.

(c) The department shall make information available to the public describing the procedures for filing complaints with the department and for complaint investigation and resolution by the department. This information shall be available on the department's website.

§60.201.Filing a Complaint.

(a) A complaint against a person who is engaged in an activity or business regulated by the department may be submitted in a form and manner prescribed by the department. A person filing a complaint is encouraged to file the complaint online on the department's website.

(b) A complaint must be filed within two years of the event giving rise to the complaint. Complaints filed after the two-year period may be investigated at the discretion of the director of enforcement.

(c) Pursuant to Texas Occupations Code §51.252, the department may accept a complaint that lacks sufficient information to identify the source or the name of the person who filed the complaint; however, the department is not required to investigate these anonymous complaints. The department may investigate anonymous complaints at its discretion.

§60.202.Investigation and Priority of Complaints.

(a) The department shall maintain a system to promptly and efficiently act on complaints filed with the department as provided by Texas Occupations Code §51.252.

(b) The department shall assign priorities and investigate complaints based on risk to the public of the conduct alleged in the complaint as provided by Texas Occupations Code §51.2521.

(c) If the department determines at any time that an allegation made or formal complaint submitted by a person is inappropriate or without merit, the department shall dismiss the complaint.

§60.203.Cooperation with Investigation of Complaints.

(a) A license holder or other person must cooperate in an investigation of a complaint conducted by a department employee or designated representative of the department (designated representative).

(b) A license holder or other person must make available to the department employee or designated representative all records, notices, and other documents requested by the department employee or designated representative.

(1) avoiding, refusing to permit, or failing to cooperate in an investigation conducted by a department employee or designated representative;

(2) interfering with an investigation conducted by a department employee or designated representative; or

(3) threatening or intimidating a department employee or designated representative in connection with an investigation.

§60.204.Status and Confidentiality of Complaints.

(a) The department shall periodically notify the complaint parties of the status of the complaint until final disposition unless the notice would jeopardize an investigation.

(b) The department shall maintain the confidentiality of complaint and disciplinary information as provided by Texas Occupations Code §51.254, any specific program statute, or other applicable law.

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 February 17, 2023.

TRD-202300815

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879

SUBCHAPTER I. CONTESTED CASES

16 TAC §§60.300 - 60.302, 60.304, 60.305, 60.307 - 60.312

STATUTORY AUTHORITY.

§60.300.Purpose and Scope.

(a) Unless otherwise provided by [~~the~~] Texas Occupations Code, Chapter 51; by the Administrative Procedure Act (APA), Texas Government Code, Chapter 2001; by the rules of the State Office of Administrative Hearings (SOAH), 1 TAC Chapter 155; by other law; or by the provisions of this chapter, this subchapter governs the institution, conduct, and determination of all contested cases under the APA.

(b) SOAH acquires jurisdiction over a contested case at certain stages of the adjudicative matter, as prescribed under the APA. SOAH's rules of procedure, 1 TAC Chapter 155, govern during the period when SOAH has jurisdiction over the contested case.

(c) In the case of a conflict between SOAH's rules of procedure and the rules in this subchapter, SOAH's rules of procedure control for the time period starting after the Request to Docket Case form has been filed and concluding after the final amendments or corrections to the proposal for decision have been filed.

(d) The rules in this subchapter shall not be construed so as to enlarge, diminish, modify, or otherwise alter the jurisdiction, powers, or authority of the commission, the executive director, or the substantive rights of any person or agency.

§60.301.Notice of Alleged Violation; Notice of Continued License Restrictions.

(a) The department shall send a written notice of alleged violation if the department:

(1) seeks an enforcement action against a person for an alleged violation of the statutes and rules of the department or its programs; or

(2) proposes to revoke a person's license or deny a license renewal application based on criminal history.

(b) The department shall send a written notice of continued license restrictions if the department proposes to continue the restrictions on a person's license pursuant to Texas Occupations Code §51.358(c) and (d).

(c) The department shall send the notices under subsections (a) and (b) by certified mail with electronic return receipt.

(d) Any notice or document served upon a person is prima facie evidence of receipt if it is directed to the person's last known complete, correct address as shown by the department's records. This presumption is rebuttable. Failure to claim properly addressed certified or registered mail will not support a finding of non-delivery.

(e) Within twenty days after receiving a notice of alleged violation or notice of continued license restrictions, the person may either: accept the department's determination and recommended administrative penalty, sanction, or both; or make a written request for a hearing on the department's determination. There is a rebuttable presumption that notice is received three days after the notice was mailed.

(f) If the person accepts the department's determination, the department and the person shall enter into an agreement as prescribed under §60.304. If a timely written request for a hearing is made, the department shall refer the department's determination to SOAH for a hearing.

(g) If the person fails to accept the department's determination or fails to request a hearing, the department may propose entry of a default order against the person, unless otherwise provided by applicable law.

(1) The department may present to the commission or the executive director a proposed default order containing findings of fact and conclusions of law.

(2) The department shall send the person a notice of the proposed default order with the deadline after which the default order may be signed.

(3) The commission or executive director shall sign the default order unless, by the deadline in paragraph (2), the person:

(A) accepts the department's determination and enters into an agreement as prescribed under §60.304; or

(B) makes a written request for a hearing on the department's determination, in which case the department shall refer its determination to SOAH for a hearing.

§60.302.Notice of Proposed Denial.

(a) The department shall send a written notice of proposed denial if the department proposes:

(1) to deny an initial license application; or

(2) to deny a person an opportunity to take an examination.

(b) The department shall send the notice of proposed denial under subsection (a) by certified mail with electronic return receipt.

(c) Any notice or document served upon a person is prima facie evidence of receipt if it is directed to the person's last known complete, correct address as shown by the department's records. This presumption is rebuttable. Failure to claim properly addressed certified or registered mail will not support a finding of non-delivery.

(d) After receiving a notice of proposed denial, the person must request a hearing in writing within twenty days of receipt of the notice or forfeit the right to a hearing, unless otherwise provided by applicable law. There is a rebuttable presumption that notice is received three days after the notice was mailed.

(e) If a timely written request is made, the department shall refer the proposed denial to SOAH for a hearing. If a timely written request is not made, the proposed denial is final.

§60.304.Disposition by Agreement.

(a) Disposition by agreement of any contested case may be made by stipulation, agreed settlement, or consent order, unless precluded by law.

(b) The commission may designate its presiding officer [~~chairperson~~] or the executive director to adopt or reject stipulations, settlement agreements, or consent orders.

(c) Parties agreeing to disposition by agreement shall prepare written stipulations, consent order, or settlement agreement, containing proposed findings of fact and conclusions of law, which shall be signed by all the agreeing parties and their designated representatives.

(d) Upon receipt of the written stipulations, consent order, or settlement agreement the executive director or the commission may:

(1) adopt the written stipulations, consent order, or settlement agreement and issue a final order;

(2) reject the written stipulations, consent order, or settlement agreement and remand the contested case for a hearing before SOAH;

(3) reject the written stipulations, consent order, or settlement agreement and order further investigation by the department; or

(4) take such other action as the executive director or the commission find just.

§60.305.Contested Case Hearings at SOAH [~~Place and Nature of Hearings~~].

(a) Contested case hearings at SOAH are governed by Texas Government Code, Chapter 2001 and the SOAH rules under 1 TAC Chapter 155.

(b) Every effort shall be made to conduct administrative hearings in person in Austin, Texas, or virtually by telephone or videoconference, to achieve the department's mission to ensure effective and economical use of public resources while adhering to the provisions of 1 TAC §155.403.

§60.307.Costs Associated with a Contested Case. [~~Hearing Costs.~~]

(a) The costs related to making a record of the SOAH contested case proceeding, including the hearing record, transcripts, and court reporters, [~~Costs associated with the contested case hearing before SOAH~~] shall be determined according to the rules in 1 TAC §155.423 [~~unless determined in accordance with subsection (b)~~].

(b) Pursuant to Texas Government Code §2001.059, on [On] the written request by a party to a case [~~or on request of the ALJ~~], a written transcript of all or part of the proceedings shall be prepared. The cost of the transcript is borne by the requesting party. This subsection [~~section~~ ] does not preclude the parties from agreeing to share the costs associated with the preparation of a transcript. [~~If only the ALJ requests a transcript, costs will be assessed to the respondent(s) or applicant(s), as appropriate.~~]

(c) For all other costs associated with the contested case, each party shall be responsible for its own costs, unless otherwise determined by law or rules or agreed upon by the parties in writing.

§60.308.Proposals for Decision.

(a) Proposed decisions for contested cases issued by a SOAH ALJ shall be brought before the commission for decision, in accordance with the APA.

(b) A party may only present the sworn testimony and the information provided during the SOAH hearing or admitted into the SOAH record, including filings of the parties, exceptions, dispositions, and the responses. No new testimony, witnesses, or information shall be allowed after SOAH submits the case to the commission for consideration.

§60.309.Motion for Rehearing.

(a) A person may submit a motion for rehearing to reconsider a decision of the commission in a contested case or reconsider a default order entered by the executive director.

(b) A motion for rehearing must identify with particularity findings of fact or conclusions of law that are the subject of the complaint and any evidentiary or legal ruling claimed to be erroneous. The motion must also state the legal and factual basis for the claimed error.

(c) A motion for rehearing shall be filed and handled in accordance with Texas Government Code, Chapter 2001, Subchapter F.

(d) The commission or the executive director may rule on a motion for rehearing.

§60.310.Final Orders.

(a) A decision or order in a contested case shall be in writing and shall be signed by the commission, the executive director, or both, as applicable.

(b) A decision or order in a contested case is final in accordance with Texas Government Code §2001.144. [A party who appeals a final decision in a contested case must pay all costs for the preparation of the original or a certified copy of the record of the agency proceeding that is required to be transmitted to the reviewing court.]

§60.311.Appeal of Final Order.

(a) An appeal of a final decision or order in a contested case shall be filed and handled in accordance with Texas Government Code, Chapter 2001, Subchapter G.

(b) A party who appeals a final decision or order in a contested case must pay all costs for the preparation of the original or a certified copy of the record of the agency proceeding that is required to be transmitted to the reviewing court.

§60.312.Corrected Orders.

The executive director may enter a corrected order to correct a clerical mistake in an order of the commission.

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 February 17, 2023.

TRD-202300813

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879

SUBCHAPTER I. CONTESTED CASES

16 TAC §60.306, §60.311

§60.306.Request for Hearing and Defaults.

§60.311.Corrected Orders.

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 February 17, 2023.

TRD-202300817

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879

SUBCHAPTER J. MEDIATION FOR CONTESTED CASES

16 TAC §§60.400 - 60.406, 60.408, 60.409

STATUTORY AUTHORITY.

§60.400.Alternative Dispute Resolution Procedures -- Mediation.

(a) Pursuant to Texas Occupations Code §51.208 and Texas Government Code Chapter 2009, this subchapter establishes the alternative dispute resolution (ADR) procedures for the voluntary settlement of contested cases through the facilitation of an impartial third party. Mediation is the ADR process used by the department.

(b) In addition to the procedures under Subchapter I [~~§60.304 of this chapter~~], the department may use [~~Department uses~~] mediation and the procedures under this subchapter [~~as an alternative method~~] for resolving contested cases.

(c) The procedures in this subchapter are consistent with Texas Government Code, Chapters 2001 and 2009; Texas Civil Practice and Remedies Code, Chapter 154; and the model guidelines for the use of ADR by state agencies developed by SOAH.

§60.401.Referral of Contested Matter for Mediation.

The department's director of enforcement [~~Department's Director of Enforcement~~], on behalf of the department [~~Department~~], may seek to resolve a contested matter through mediation involving all parties, and if so, shall refer the matter for mediation in accordance with this subchapter.

§60.402.Appointment of the Mediator; Mediation Costs.

(a) For each contested matter referred for mediation, the ADR Administrator, as defined under §60.10, shall either:

(1) preside over the mediation proceeding as the mediator; or[,]

(2) appoint one of the following individuals to serve as the mediator:

(A) a department employee; [~~assign a Departmental mediator,~~]

(B) [~~(3)~~] an employee [~~appoint a mediator~~] from another Texas state agency;[,] or

(C) [~~(4)~~] a person in the mediation profession who is not a Texas state employee (private mediator) [~~appoint a private mediator~~].

(b) A private mediator may be appointed provided that:

(1) the parties unanimously agree to use a private mediator;

(2) the parties unanimously agree to the selection of the person to serve as the private mediator; and

(3) the private mediator agrees to be subject to the direction of the ADR Administrator and to all time limits imposed by the ADR Administrator, statute or regulation.

(c) If a private mediator or an employee [~~a mediator~~] from another Texas state agency is appointed to serve as the mediator [~~used~~], the costs for the services of that mediator shall be apportioned equally among the parties, unless otherwise agreed upon by the parties, and shall be paid directly to the private mediator or the other Texas state agency.

(d) Unless the parties agree otherwise in writing, each party shall be responsible for its own costs incurred in connection with the mediation, including without limitation, costs of document reproduction, attorney's fees, consultant fees and expert fees.

(e) The ADR Administrator may assign a substitute or additional mediator to a proceeding as the ADR Administrator deems necessary.

§60.403.Qualifications, Standards, and Role of the Mediator [~~Qualifications of Mediators~~].

(a) A mediator [~~All mediators~~] must have completed a minimum of 40 hours of Texas mediation training as prescribed under Texas Civil Practices and Remedies Code §154.052 [~~, Chapter 154~~].

(b) A mediator [~~All mediators~~] shall subscribe to the ethical guidelines for mediators adopted by the ADR Section of the State Bar of Texas.

(c) A mediator shall preside over and facilitate the mediation of a contested matter. The mediator shall encourage and assist the parties in reaching a settlement, but may not compel or coerce the parties to enter into a settlement agreement. The mediator is not a decisionmaker in the contested matter.

(d) Unless expressly authorized by the disclosing party, the mediator may not disclose to either party information given in confidence by the other. The mediator shall at all times maintain confidentiality with respect to communications relating to the subject matter of the dispute.

§60.404.Disqualification of the Mediator. [~~Disqualifications of Mediators.~~]

(a) If the mediator is a SOAH ALJ, that person will not be permitted to [~~also~~] sit as the ALJ for the case if the contested matter goes to hearing.

(b) If the mediator is an employee of the department [~~Department~~] and the dispute does not settle, that mediator will not have any further contact or involvement concerning the contested matter.

§60.405.Qualified Immunity of the Mediator.

The mediator shall have the qualified immunity prescribed by the Texas Civil Practice and Remedies Code[,] §154.055, if applicable.

§60.406.Commencement of Mediation.

(a) Mediation may begin, at the discretion of the director of enforcement [~~Director of Enforcement~~], any time [~~anytime~~] after the department [~~Department~~ ] anticipates initiation of an adverse action against a person [~~an applicant or respondent~~].

(b) The department [~~Department~~] may issue a notice of mediation [~~Notice of Mediation~~] along with a notice of alleged violation, [~~Notice of Alleged Violation or with~~] a notice of continued license restrictions, or a notice of a proposed denial, as described under Subchapter I [~~of licensure or opportunity to take an examination~~].

(c) Prior to the submission of a Request for Docket Case form to SOAH, and with agreement of all parties, the ADR Administrator may schedule mediation upon any party's request.

(d) [~~(b)~~] After a Request for Docket Case form has been submitted to SOAH, the contested case is subject to SOAH's procedures under 1 TAC Chapter 155, and it is at the discretion of the ALJ whether mediation may apply or may continue to apply to a contested case.

§60.408.Agreements.

(a) All agreements between or among parties that are reached as a result of mediation must be committed to writing and the terms of the agreement will be incorporated in an order that is subject to approval by the commission or the executive director [~~Executive Director or Commission~~].

(b) A final written agreement to which the department [~~Department~~] is a signatory that is reached as a result of the mediation is subject to or excepted from required disclosure in accordance with Texas Government Code, Chapter 552.

§60.409.Confidentiality.

(a) Except as provided in subsections (c) and (d), a communication relating to the subject matter made by a participant in mediation, whether before or after the institution of formal mediation proceedings, is confidential, is not subject to disclosure, and may not be used as evidence against the participant in any separate legal [~~further~~] proceeding.

(b) Any notes or records made regarding a mediation are confidential, and participants, including the mediator, may not be required to testify in any separate legal proceeding [~~proceedings~~] relating to or arising out of the matter in dispute or be subject to process requiring disclosure of confidential information or data relating to or arising out of the matter in dispute.

(c) An oral communication or written material used in or made a part of a mediation process is admissible or discoverable only if it is admissible or discoverable independent of the mediation.

(d) If this section conflicts with other legal requirements for disclosure of communications or materials in a separate legal proceeding, the issue of confidentiality may be presented to the judge in that proceeding to determine, in camera, whether the facts, circumstances, and context of the communications or materials sought to be disclosed warrant a protective order or whether the communications or materials are subject to disclosure.

(e) All communications in the mediation between parties and between each party and the mediator are confidential. No shared information will be given to the other party unless the party sharing the information explicitly gives the mediator permission to do so. Material provided to the mediator will not be provided to other parties and will not be filed or become part of the contested case record. All notes taken during the mediation conference will be destroyed at the end of the process.

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 February 17, 2023.

TRD-202300814

Della Lindquist

Interim General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: April 2, 2023

For further information, please call: (512) 475-4879