HBA-ATS S.B. 757 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 757 By: Duncan Civil Practices 4/16/1999 Engrossed BACKGROUND AND PURPOSE S.B. 757 clarifies the purpose of the State Office of Administrative Hearings (office), the independence of its judges, and issues related to the office's method of funding for the utility and natural resources divisions. It allows the office to adopt a seal authenticating the official acts of the office, delineates the scope of responsibilities of the chief administrative law judge (judge), establishes minimum standards for appointment by the chief administrative law judge to the position of senior judge or master judge, and adds the Texas Center for the Judiciary to the list of entities from which the judges may receive training. This bill also delegates rulemaking authority to the judge as to the types of alternative dispute resolution procedures that are permitted and prohibited. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the chief administrative law judge of the State Office of Administrative Hearings in SECTION 5 (Section 2003.0412, Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 2003.021, Government Code, by amending Subsections (a) and (b) and adding Subsection (e), as follows: (a) Provides that the State Office of Administrative Hearings (office) is a state agency created as an independent forum for the conduct of adjudicative hearings in the executive branch of state government. Provides that the purpose of the office is to separate the adjudicative function from the investigative, prosecutorial, and policymaking functions in the executive branch in relation to hearings that the office is authorized to conduct. (b) Requires the office to conduct administrative hearings in matters for which the office is required to conduct the hearing under other law. Requires, rather than authorizes, the office to conduct alternative dispute resolution procedures that the office is required to conduct under law. Authorizes the office to conduct, for a fee and under a contract, administrative hearings or alternate dispute resolution procedures in matters voluntarily referred to the office by a governmental entity. (e) Authorizes the office to adopt a seal to authenticate the official acts of the office and of its administrative law judges. SECTION 2. Amends Section 2003.022, Government Code, by amending Subsection (a) and adding Subsections (c) and (d), to (a) Provide that the chief administrative law judge (judge) is eligible for reappointment. (c) Prohibit the judge from engaging in the practice of law while serving as judge. Provides that the judge serves in a full-time position. (d) Set forth responsibilities required of the judge. SECTION 3. Amends Subchapter B, Chapter 2003, Government Code, by adding Section 2003.024, as follows: Sec. 2003.024. INTERAGENCY CONTRACTS. (a) Requires the office and a state agency that refers matters to the office, to enter into an interagency contract for the biennium under which the referring agency pays the office the costs of conducting a hearing or procedure, if the costs to the office of conducting hearings and alternative dispute resolution procedures for an agency are not otherwise paid by appropriations. Provides that the costs paid under the contract be based on an hourly rate set by the office. Requires the rate to be set in time for it to be reviewed by the legislature during the review of the office's legislative appropriations request for the biennium. (b) Requires the office that conducts hearings and alternative dispute resolution procedures and a state agency that refers matters to the office that are not paid by certain appropriations, to enter into an interagency contract for each state fiscal year under which the referring agency pays the office the costs for the number of hours spent by the office conducting hearings or alternate dispute resolution procedures that exceed by 10 percent or more the number of hours spent by the office during the state fiscal year that ended August 31, 1998. Provides that the costs paid under the contract be based on an hourly rate set by the office. Requires the rate to be set in time for it to be reviewed by the legislature during the review of the office's legislative appropriations request for the biennium. (c) Requires the office to file an estimate of its hourly costs in conducting each type of hearing or dispute resolution procedure, based on the average cost per hour during the preceding state fiscal year of certain costs incurred in conducting hearings or dispute resolutions. (d) Provides that this section does not apply to certain hearings. SECTION 4. Amends Section 2003.041, Government Code, by adding Subsection (c), as follows: (c) Provides that an administrative law judge employed by the office is responsible and subject only to the judge or a senior or master administrative law judge designated by the judge. SECTION 5. Amends Subchapter C, Chapter 2003, Government Code, by adding Sections 2003.0411 and 2003.0412, as follows: Sec. 2003.0411. SENIOR AND MASTER ADMINISTRATIVE LAW JUDGES. Authorizes the judge to appoint senior administrative law judges to perform duties assigned by the judge. Sets forth the requirements necessary to be appointed a senior administrative law judge. Sets forth the requirements necessary to be appointed a master administrative law judge. Sec. 2003.0412. EX PARTE CONSULTATIONS. (a ) Provides that, except as provided by Subsection (b), the provisions of Section 2001.061(Ex Parte Consultations) apply in relation to a matter before the office without regard to whether the matter is considered a contested case under Chapter 2001. (b) Provides that the provisions of Section 2001.061 do not apply to a matter before the office to the extent that the office is conducting an ADR procedure in relation to the matter. Requires the judge to adopt rules prescribing the types of ADR procedures in which ex parte consultations are prohibited and the types that are allowed. Requires the judge in adopting rules for ADR procedures in which ex parte consultations are prohibited, to model the prohibition after Section 2001.061, but authorized the judge to vary the extent of the prohibition if it is necessary to take into account the nature of the ADR procedures. SECTION 6. Amends Section 2003.045, Government Code, as follows: Sec. 2003.045. New title: OVERSIGHT OF ADMINISTRATIVE LAW JUDGES. Authorizes the judge to designate senior or master administrative law judges, rather than an administrative division in the office, to oversee the training, evaluation, discipline, and promotion of administrative law judges employed by the office. Makes nonsubstantive change. SECTION 7. Amends Section 2003.0451(a), Government Code, to include the Texas Center for the Judiciary in the external sources through which the office is required to offer specified courses and training. SECTION 8. Amends Section 2003.046, Government Code, as follows: (a) Provides that a central hearings panel in the office is composed of administrative law judges and senior or master administrative law judges, rather than six senior administrative law judges assigned to the panel, rather than appointed, by the judge. (b) Authorizes the judge to create teams within the central panel, including an administrative license revocation division, according to the subject matter or types of hearings conducted by the central panel, rather than requiring the central panel to coordinate and supervise the operation of administrative hearings conducted by the office. Makes conforming and nonsubstantive changes. SECTION 9. Amends Section 2003.048, Government Code, as follows: Sec. 2003.048. NATURAL RESOURCE CONSERVATION COMMISSION HEARINGS FEE. Prohibits a fee charged to the Texas Natural Resource Conservation Commission (commission) for certain services from being less than the amount appropriated to the commission in the General Appropriations Act for payment to the natural resource conservation division to conduct commission hearings. Requires the fee to be based on costs incurred to conduct such hearings. SECTION 10. Amends Section 2003.049(1), Government Code, to make a conforming change. SECTION 11. Amends Subchapter C, Chapter 2003, Government Code, by adding Section 2003.051, as follows: Sec. 2003.051. ROLE OF REFERRING AGENCY. Prohibits a state agency that has referred a matter to the office in which the office will conduct a hearing from taking any adjudicative action relating to the matter until the office has issued its proposal for decision or otherwise concluded its involvement in the matter. Authorizes the state agency to exercise its advocacy rights in the matter before the office in the same manner as any other party. SECTION 12. Effective date: September 1, 1999, except as provided by Subsection (b) of this section. Effective date for Section 2003.024, Government Code, as added by this Act, and the changes in law made by this Act to Sections 2003.048 and 2003.049, Government Code: September 1, 2000. SECTION 13. Emergency clause.