1. (a) Initiation.

   1. (1) If the executive director finds that a petition meets all legal requirements, the department will initiate a contested case in accordance with the rules of the State Office of Administrative Hearings.
   2. (2) The department may initiate a contested case on its own initiative in accordance with the rules of the State Office of Administrative Hearings.

2. (b) Service of notice of hearing. Service of the Notice of Hearing shall be accomplished by certified or registered mail to the party's last known address as shown in the department's records. A notice of a hearing in a contested case is sufficient for purposes of notice if it includes a copy of the petition prepared in accordance with §1.24 of this subchapter (relating to Content of Petition), and the following information, unless it is included in the petition:

   1. (1) a statement of the time, place, and nature of the hearing;
   2. (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; and
   3. (3) reference to the particular sections of the statutes and rules involved.

3. (c) Standard of review.

   1. (1) The standard of review is reasonableness, if not otherwise specified.

   2. (2) The standard of review is whether the agency's actions were based on fraud, misconduct, or such gross mistake as would imply bad faith or failure to exercise an honest judgment for:

      1. (A) contract claims;
      2. (B) claims related to revocation or suspension of a county sign license under §21.149(f) of this title (relating to Licenses);
      3. (C) claims related to cancellation of a permit under §21.150(k) of this title (relating to Permits); and
      4. (D) claims related to control of signs along rural roads under §21.572 of this title (relating to Notice and Appeal).
4. (d) Burden of proof. A party seeking monetary damages or penalties shall bear the burden of proof. In all other instances, the party challenging a department decision or action shall bear the burden of proof.

Source Note:The provisions of this §1.26 adopted to be effective September 21, 2000, 25 TexReg 9228; amended to be effective February 17, 2005, 30 TexReg 722; amended to be effective May 20, 2010, 35 TexReg 3850.