1. (a) Purpose. The purpose of this section is to provide procedures for contested case hearings. This section does not apply to matters such as appeals from staff or Board decisions or waivers, and this section does not in itself create any right to a contested case hearing, but merely provides a process for hearings that are otherwise expressly granted by law or rule.
2. (b) SOAH Designation. The Governing Board (the "Board") of the Texas Department of Housing and Community Affairs (the "Department") designates the State Office of Administrative Hearings (SOAH) to hold all contested case hearings on the Board's behalf.

3. (c) Initiation of Hearing.

   1. (1) Upon receipt of a pleading or other document that is intended to initiate a contested case proceeding before the Department, the Department shall determine if a contested case hearing is provided under the relevant statutory provisions and rules and, if so, will docket the same as a pending proceeding, number it in accordance with any established docket numbering system of the Department, and refer the matter to SOAH for hearing.
   2. (2) SOAH shall acquire jurisdiction over a case when the Department completes and files a Request to Docket Case form, or other form acceptable to SOAH, together with the notice of report to the board required under Texas Government Code, §2306.043 or other pertinent documents giving rise to the case. Once SOAH acquires jurisdiction, all subsequent documents are to be filed with SOAH, with appropriate service upon the opposing party in accordance with this chapter and the rules of SOAH.
   3. (3) Except upon a showing of good cause, all contested case hearings in which the Department is a party shall be held at the offices of SOAH located in Austin, Texas.
   4. (4) Nothing in this subchapter shall in any way limit, alter, or abridge the ability of the Department to enter into mediation or alternative dispute resolution at any time prior to or after the holding of the administrative hearing but prior to the adoption of a final order.

4. (d) Service of Notice of Hearing, Pleadings and Other Documents on Parties.

   1. (1) Service of a notice of hearing shall be made by hand delivery, regular first class mail or certified mail to the party's last known address as shown on the Department's records, in accordance with §1.22 of this chapter (relating to providing contact information to the Department).
   2. (2) Service of pleadings and other documents shall be made in any manner provided for in SOAH rules.

5. (e) Proposal for Decision.

   1. (1) After the conclusion of the hearing, the Administrative Law Judge (ALJ) shall prepare and serve on the parties a proposal for decision that includes the ALJ's findings of fact and conclusions of law, as modified by any exceptions and replies to exceptions timely filed with the ALJ in accordance with §2001.062 of the Texas Government Code and SOAH rules. The Executive Director shall place the proposal for decision and a proposed final order on the Board's agenda for discussion and possible action at a subsequent meeting of the Board.
   2. (2) At a meeting of the Board where the proposed order may be adopted, parties may argue based on the record only, for changes to the proposal for decision or the proposed final order. No new evidence shall be taken at the meeting. The Board may, on its own motion, remand to SOAH for additional fact finding. The Board may change a finding of fact or conclusion of law made by the ALJ, but only for reasons stated in §2001.058(e) of the Texas Government Code. The Board may adopt a final order if it finds that the findings of fact and conclusions of law are supported by the evidence. Motions for rehearing may be filed and served in accordance with the APA.

6. (f) Disposition of Contested Cases on a Default Basis.

   1. (1) In contested cases where the party not bearing the burden of proof at the hearing fails to appear, the ALJ may issue an order finding adequate notice, deeming factual allegations in the notice of hearing admitted, if appropriate, conditionally dismissing the case from the SOAH docket, and conditionally remanding the case to TDHCA for disposition on a default basis. Pursuant to SOAH rules, a party has 15 days after the issuance of a conditional order of dismissal and remand to file with SOAH a motion to set aside the order of dismissal and remand. On the sixteenth day after issuance, if no motion to set aside is timely filed, or the motion to set aside is not granted, the conditional order of dismissal and remand becomes final.
   2. (2) When the order of dismissal and remand is final, the Executive Director shall prepare a proposed order for the Board's action containing findings of fact, as set forth in the notice of hearing, conclusions of law, and granting the relief requested by staff. The matter shall be placed on the Board's agenda for discussion and possible action at a subsequent meeting. Argument and evidence on the merits will not be considered at the meeting. Motions for rehearing shall be filed and served in accordance with the APA.

Source Note:The provisions of this §1.13 adopted to be effective July 5, 2012, 37 TexReg 4889; amended to be effective September 25, 2014, 39 TexReg 7572; amended to be effective July 25, 2017, 42 TexReg 3637.