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RULE §2.302 Administrative Penalty Process

Published: 2015

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(a) The Executive Director will appoint an Enforcement
Committee, as defined in §2.102 of this chapter (relating to
(b) The Compliance Division will recommend the initiation
of administrative penalty proceedings to the Committee by referral
of a compliance monitoring matter to the secretary of the Committee.

(c) The secretary of the Committee shall promptly contact
the Responsible Party describing the violations involved. If the secretary
is able to facilitate closure of the matter without further action
by the Committee, the secretary will report back to the Compliance
Division. Should the secretary and Responsible Party fail to come
to closure, the matter will be presented to the Committee for possible
(d) The Committee will first offer to hold an informal
meeting with the Responsible Party to attempt to reach an agreed resolution.
If any such meeting is held:
  (1) Statements made in the meeting shall not be used
as evidence in any proceedings if agreed resolution is not reached.
This does not preclude establishing such matters through the introduction
of proper evidence;
  (2) The Responsible Party may, but is not required
to be, represented by legal counsel of their choosing at their own
cost and expense;
  (3) The Responsible Party may bring to the meeting
third parties, employees, and agents with knowledge of the issues;
  (4) In order to facilitate candid dialogue, informal
meetings will not be open to the public; however, the Committee may
include such other persons or witnesses as the Committee deems necessary
for a complete and full development of relevant information and evidence.

(e) An informal meeting may result in:
  (1) An agreement to dismiss the matter with no further
action, which will then be reported to the Executive Director;
  (2) A Compliance Assistance Notice issued by the Committee,
available for Responsible Parties appearing for the first time before
the committee for matters which the Committee determines do not necessitate
the assessment of an administrative penalty, but for which the Committee
wishes to place the Responsible Party on specific notice with regard
to possible future violations;
  (3) An agreement to resolve the matter through corrective
action without penalty. In this circumstance, the agreement shall
be reported to the Executive Director;
  (4) An agreement to resolve the matter through corrective
action with the assessment of an administrative penalty which may
be probated in whole or in part, and may, where appropriate, include
additional action to promote compliance such as agreements to obtain
training. In this circumstance, a proposed agreed order and draft
report will be prepared and presented to Board for approval;
  (5) A recommendation by the Committee to the Executive
Director regarding the issuance of a report to the Board and issuance
of a Notice of Violation to the Responsible Party seeking the assessment
of administrative penalties;
  (6) A determination that the Responsible Party should
be referred for debarment, in which case the Responsible Party will
be offered another opportunity to appear before the Committee, shall
be reported to the Executive Director; or
  (7) Other action as the Committee deems appropriate,
shall be reported to the Executive Director.
(f) Upon receipt of a recommendation from the Committee
regarding the issuance of a report and assessment of an administrative
penalty, the Executive Director shall determine whether a violation
has occurred. If needed, the Executive Director may request additional
information and/or return the recommendation to the Committee for
further development. If the Executive Director determines that a violation
has occurred, the Executive Director will issue a report to the Board
in accordance with §2306.043 of the Texas Government Code.
(g) Not later than fourteen (14) days after issuance
of the report to the Board, the Executive Director will issue a Notice
of Violation to the Responsible Party. The Notice of Violation issued
by the Executive Director will include:
  (1) a summary of the alleged violation(s) together
with reference to the particular sections of the statutes and rules
alleged to have been violated;
  (2) a statement informing the Responsible Party of
the right to a hearing before the State Office of Administrative Hearings
("SOAH"), if applicable, on the occurrence of the violation(s), the
amount of penalty, or both;
  (3) any other matters deemed relevant; and
  (4) the amount of the recommended penalty. In determining
the amount of a recommended administrative penalty, the Executive
Director shall take into consideration whether the Responsible Party
has timely taken appropriate actions within their control, the amount
of penalty necessary to deter future violations, and, in the instance
of a proceeding to assess administrative penalties against a Responsible
Party administering CSBG, CEAP, ESG or HHSP, whether the assessment
of such penalty will interfere with the uninterrupted delivery of
services under such program(s). He or she shall further take into
account whether the Department's purposes may be achieved or enhanced
by the use of full or partial probation of penalties subject to adherence
to specific requirements and whether the violation(s) in question
involve disallowed costs or other matters giving rise to financial
exposure to the Department.
(h) The amount of recommended penalty will be determined
with reference to a penalty schedule shown in the tables in subsection
(j) of this section.
(i) Not later than twenty (20) days after the Responsible
Party receives the Notice of Violation, the Responsible Party may
accept the determination and recommended penalty or request a hearing.

(j) If the Responsible Party requests a hearing or
does not respond to the Notice of Violation, the Executive Director,
with the approval of the Board, shall cause the hearing to be docketed
before a SOAH administrative law judge in accordance with Chapter
1, §1.13 of this title (relating to Adjudicative Hearing Procedures).

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Source Note: The provisions of this §2.302 adopted to be effective November 19, 2014, 39 TexReg 8976