Proposed Rules Title 1

TITLE 1. ADMINISTRATION

CHAPTER 18. GENERAL RULES CONCERNING REPORTS

The Texas Ethics Commission (the Commission) proposes the repeal of §§18.21, 18.23 - 18.26 of Chapter 18, Title 1 of the Texas Administrative Code, regarding the administrative waivers of statutory civil penalties for late filing of statements and reports.

The Commission seeks to simplify the rules and streamline the processing of requests for waiver or reduction of civil penalties for late reports assessed through the "administrative process." The rules as currently constructed are overly complicated. The complexity makes it difficult and time-consuming for staff to process waiver requests. The complexity also makes it difficult for the regulated community to understand their rights under the rules. The Commission believes the rules need to change substantially for the Commission to timely process waiver requests. These repeals are submitted along with new Ethics Commission Rules §§18.21, 18.24, 18.25 and 18.26, which are submitted separately.

James Tinley, General Counsel, has determined that for the first five-year period the repeal of these rules is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed repeal of these rules.

The General Counsel has also determined that for each year of the first five years the proposed repeal of these rules is in effect, the public benefit will be consistency and clarity in the Commission’s rules regarding the reduction or waiver of administrative penalties. There will not be an effect on small businesses, microbusinesses or rural communities. There is no anticipated economic cost to persons who are required to comply with the proposed repeals.

The General Counsel has determined that during the first five years that the proposed repeals are in effect, they will not: create or eliminate a government program; require the creation of new employee positions or the elimination of existing employee positions; require an increase in future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; expand, limit, or repeal an existing regulation; create a new regulation; increase or decrease the number of individuals subject to the rules' applicability; or positively or adversely affect this state's economy.

The Commission invites comments on the proposed repeal of these rules from any member of the public. A written statement should be emailed to public_comment@ethics.state.tx.us, or mailed or delivered to J.R. Johnson, Executive Director, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070. A person who wants to offer spoken comments to the Commission concerning the proposed repeal of these rules may do so at any Commission meeting during the agenda item relating to the proposed repeal of the rule. Information concerning the date, time, and location of Commission meetings is available by telephoning (512) 463-5800 or on the Commission’s website at www.ethics.state.tx.us.

The repeal of these rules is proposed under Texas Government Code §571.062, which authorizes the Commission to adopt rules to administer Title 15 of the Election Code.

The proposed repeal of these rules affects Title 15 of the Election Code.

§18.21.Jurisdiction to Consider Waiver Request.

§18.23.Administrative Waiver of Statutory Civil Penalties.

§18.24.General Guidelines for Other Administrative Waiver or Reduction of Statutory Civil Penalties.

§18.25.Administrative Waiver or Reduction of Certain Statutory Civil Penalties.

§18.26.Administrative Waiver or Reduction of Other Statutory Civil Penalties in Excess of $500.

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 April 17, 2023.

TRD-202301394

Jim Tinley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: June 4, 2023

For further information, please call: (512) 463-5800

1 TAC §§18.21, 18.24 - 18.26

The Texas Ethics Commission (the Commission) proposes new Texas Ethics Commission Rules in Chapter 18. Specifically, the Commission proposes new rules §18.21, regarding Jurisdiction to Consider Waiver Request, §18.24, regarding General Guidelines for Administrative Waiver or Reduction of Statutory Civil Penalties, §18.25, regarding Administrative Waiver or Reduction of Certain Statutory Civil Penalties, and §18.26, regarding Administrative Waiver or Reduction of Statutory Civil Penalties in Excess of $500.

The Commission seeks to simplify the rules and streamline the processing of requests for waiver or reduction of civil penalties for late reports assessed through the administrative process. The rules as currently constructed are overly complicated. The complexity makes it difficult and time consuming for staff to process waiver requests. The complexity also makes it difficult for the regulated community to understand their rights under the rules. The Commission believes the rules need to change substantially for the Commission to timely process waiver requests. These proposed amendments are submitted along with the proposed repeal of 1 TAC §§18.21, 18.23, 18.24, 18.25 and 18.26, which is submitted separately. The proposed rules preserves the right to appeal the determination of a waiver or reduction under the rules to the Commission.

James Tinley, General Counsel, has determined that for the first five-year period the proposed new rules are in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed new rules.

The General Counsel has also determined that for each year of the first five years the proposed new rules are in effect, the public benefit will be consistency and clarity in the Commission’s rules regarding the reduction or waiver of administrative penalties. There will not be an effect on small businesses, microbusinesses or rural communities. There is no anticipated economic cost to persons who are required to comply with the proposed new rules.

The General Counsel has determined that during the first five years that the proposed new rules are in effect, they will not: create or eliminate a government program; require the creation of new employee positions or the elimination of existing employee positions; require an increase in future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; expand, limit, or repeal an existing regulation; create a new regulation; increase or decrease the number of individuals subject to the rules' applicability; or positively or adversely affect this state's economy.

The Commission invites comments on the proposed new rules from any member of the public. A written statement should be emailed to public_comment@ethics.state.tx.us, or mailed or delivered to J.R. Johnson, Executive Director, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070. A person who wants to offer spoken comments to the Commission concerning the proposed new rules may do so at any Commission meeting during the agenda item relating to the proposed new and amended rules. Information concerning the date, time, and location of Commission meetings is available by telephoning (512) 463-5800 or on the Commission’s website at www.ethics.state.tx.us.

The new rules are proposed under Texas Government Code §571.062, which authorizes the Commission to adopt rules to administer Title 15 of the Election Code.

The proposal affects Title 15 of the Election Code.

§18.21.Jurisdiction to Consider Waiver Request.

(a) A filer may ask the commission to waive or reduce a civil penalty determined by §§ 305.033(b) or 572.033(b) of the Government Code, or §254.042(b) of the Election Code by submitting a written request to the Commission.

(b) The commission will not consider a request under subsection (a) of this section unless the filer, not later than 60 days after the report or statement was due:

(1) submits the request in the manner prescribed by subsection (a) of this section;

(2) files all reports owed to the commission; and

(3) pays all outstanding civil penalties owed to the commission that are not subject to a pending request for waiver or appeal.

§18.24.General Guidelines for Administrative Waiver or Reduction of Statutory Civil Penalties.

(a) For purposes of determining whether a filer is eligible for a waiver or reduction of a civil penalty under §18.25 or §18.26 of this title (relating to Administrative Waiver or Reduction of Certain Statutory Civil Penalties and Administrative Waiver or Reduction of Statutory Civil Penalties in Excess of $500 respectively), a "prior late offense" is any report for which a civil penalty for late filing was assessed, regardless of whether the civil penalty was waived or reduced. The term does not include:

(1) reports for which no late notices were sent and the filer did not file a request that the civil penalty be waived or reduced for the prior late report; and

(2) reports determined by the executive director to be not required.

(b) A civil penalty that is reduced under §18.25 or §18.26 of this title will revert to the full amount originally assessed if the reduced civil penalty is not paid within thirty (30) calendar days from the date of the letter informing the filer of the reduction.

(c) A filer may appeal a determination made under §18.25 or §18.26 of this title by submitting a request for appeal in writing to the commission.

(1) The request for appeal should state the filer's reasons for requesting an appeal, provide any additional information needed to support the request, and state whether the filer would like the opportunity to appear before the commission and offer testimony regarding the appeal.

(2) The Executive Director may review the appeal and reconsider the determination made under §18.25 or §18.26 of this title or set the appeal for a hearing before the commission.

(3) After hearing a request for appeal, the commission may affirm the determination made under §18.25 or §18.26 of this title or make a new determination based on facts presented in the appeal.

§18.25.Administrative Waiver or Reduction of Certain Statutory Civil Penalties.

(a) The executive director shall apply this section to late report subject to statutory civil penalty of not more than $500.

(b) The executive director shall use the following chart to determine the level of waiver or reduction of a civil penalty under this section:

Figure: 1 TAC §18.25(b) (.pdf)

§18.26.Administrative Waiver or Reduction of Statutory Civil Penalties in Excess of $500.

(a) The executive director shall apply this section to late report subject to statutory civil penalty in excess of $500.

(b) The executive director shall use the following chart to determine the level of waiver or reduction of a civil penalty under this section:

Figure: 1 TAC §18.26(b) (.pdf)

(1) where the chart identifies a dollar amount, that is the amount of the reduced or waived penalty; and

(2) where the chart identifies a percentage, that is the percentage by which the penalty is reduced.