This section sets the process for notice, hearing, and assessment of an administrative penalty or disgorgement order after a violation is found.
Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT OR DISGORGEMENT ORDER PROCEDURE. (a) If the executive director determines that a violation has occurred, the executive director may issue to the commission a report that states the facts on which the determination is based and the executive director's recommendation on the imposition of an administrative penalty, including a recommendation on the amount of the penalty. (b) Not later than the 14th day after the date the report is issued, the executive director shall give written notice of the report to the person against whom the penalty may be assessed. The notice may be given by regular or certified mail. The notice must: (1) include a brief summary of the alleged violation; (2) state the amount of the recommended penalty; and (3) inform the person that the person has a right to a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty. (b-1) If the commission sends written notice to a person by mail addressed to the person's mailing address as maintained in the commission's records, the person is deemed to have received notice: (1) on the fifth day after the date that the commission sent the written notice, for notice sent by regular mail; or (2) on the date the written notice is received or delivery is refused, for notice sent by certified mail. (c) A penalty may not be assessed under this section if the person against whom the penalty may be assessed remedies the violation before the 31st day after the date the person receives the notice under Subsection (b). A person who claims to have remedied an alleged violation has the burden of proving to the commission that the alleged violation was remedied and was accidental or inadvertent. This subsection does not apply to a violation of Chapter 17, 55, or 64. (d) Not later than the 20th day after the date the person receives the notice, the person may accept the determination and recommended penalty of the executive director in writing or may make a written request for a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty. (e) If the person accepts the executive director's determination and recommended penalty or fails to timely respond to the notice, the commission by order shall approve the determination and impose the recommended penalty or order a hearing on the determination and the recommended penalty. (f) If the person requests a hearing or the commission orders a hearing under Subsection (e), the commission shall refer the matter to the State Office of Administrative Hearings for a hearing and give notice of the referral to the person. The parties to a proceeding under this subchapter shall be limited to the person and the commission, including the independent market monitor. The hearing shall be held by an administrative law judge of the State Office of Administrative Hearings and notice of the hearing must be provided in accordance with Chapter 2001, Government Code. The administrative law judge shall make findings of fact and conclusions of law and promptly issue to the commission a proposal for a decision about the occurrence of the violation and the amount of a proposed penalty. Based on the findings of fact, conclusions of law, and proposal for a decision, the commission by order may find that a violation has occurred and impose a penalty or disgorgement order or may find that no violation occurred. (g) The notice of the commission's order shall be given to the person as provided by Chapter 2001, Government Code, and must include a statement of the right of the person to judicial review of the order. Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1212, Sec. 3, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1579, Sec. 2, eff. Aug. 30, 1999. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 91 (S.B. 1303), Sec. 25.001, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 3, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 996 (H.B. 2133), Sec. 4, eff. September 1, 2011. Acts 2019, 86th Leg., R.S., Ch. 81 (S.B. 1358), Sec. 1, eff. September 1, 2019.