TITLE banking-and-securities

Part I. Finance Commission of Texas

Chapter 9. Rules of Procedure for Contested Case Hearings, Appeals, and Rulemakings

Subchapter B. Contested Case Hearings

7 TAC §§9.16, 9.25, 9.39

The Finance Commission of Texas, the Texas Department of Banking, the Savings and Loan Commissioner and the Consumer Credit Commissioner (the agencies) adopts amendments to §9.16 and §9.25, concerning certain pleading requirements, and new §9.39, concerning disposition of exhibits. The sections are adopted without changes to the proposed text as published in the December 25, 1998, issue of the Texas Register (23 TexReg 12977), and the text will not be republished.

Pursuant to Chapter 9, a simplified system of pleading has been adopted for agency administrative proceedings under which opposing parties are presumed to contest all material allegations in an application or complaint without the necessity of filing pleadings. The amendment to §9.16(b) requires written advance notice to be given the agency of any "affirmative defenses." This requirement is desirable so that the agency will have a reasonable opportunity to investigate the facts surrounding any affirmative defenses in advance of the hearing. The related amendment of §9.25 adds new subsection (f) to make clear that the standard Texas rule regarding the burden of proof on affirmative defenses applies in agency administrative hearings. (See Ray, 1 Texas Practice, Law of Evidence (3rd Edition 1980) §43.)

New §9.39 will alleviate the storage problem created by oversized exhibits introduced in hearings by permitting the return of exhibits to the parties after cases have become final and all appeals exhausted. This section will be supplemented by a request to the Texas State Library to authorize the agencies to dispose of exhibits in this manner under agency records retention schedules.

The agencies received no comments regarding the proposals.

The sections are adopted pursuant to Government Code §2001.004, which requires all administrative agencies to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. The sections are also adopted under specific rulemaking authority in the substantive statutes administered by the agencies.

Finance Code, §31.003(a)(5), authorizes the finance commission to adopt rules necessary or reasonable to facilitate the fair hearing and adjudication of matters before the banking commissioner and the finance commissioner.

Finance Code, §152.102, authorizes the finance commission to adopt rules necessary for the enforcement and orderly administration of that chapter (regulating sale of checks).

Finance Code, §153.002, authorizes the finance commission to adopt rules necessary to implement that chapter (regulating currency exchange and transmission).

Finance Code, §154.051(b), authorizes the department of banking to adopt rules concerning matters incidental to the enforcement and orderly administration of that chapter (regulating prepaid funeral benefits).

Finance Code, §11.302, authorizes the finance commission to adopt rules applicable to state savings associations or to savings banks. Finance Code, §96.002(a)(2), and §66.002, also authorize the savings and loan commissioner and the finance commission to adopt procedural rules for deciding applications filed with the savings and loan commissioner or the savings and loan department.

Finance Code, §11.304, authorizes the finance commission to adopt rules necessary for supervising the consumer credit commissioner and for ensuring compliance with Finance Code, Chapter 14 and Title 4, plus amendments to the source law made by Acts 1997, 75th Legislature, Chapter 1396). Texas Civil Statutes, Article 5069-3A.901, also authorizes the finance commission to adopt rules necessary for the enforcement of Article 5069-3A.001. Finance Code, §371.006, further authorizes the consumer credit commissioner to adopt rules necessary for the enforcement of Finance Code, Chapter 371.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 19, 1999.

TRD-9901026

Everette D. Jobe

Certifying Official

Finance Commission of Texas

Effective date: March 11, 1999

Proposal publication date: December 25, 1998

For further information, please call: (512) 475-1300