| (a) The Executive Director will appoint an Enforcement
Committee, as defined in §2.102 of this chapter (relating to
Definitions).
(b) The referring division will recommend the initiation
of administrative penalty proceedings to the Committee by referral
to the secretary of the Committee (Secretary). At the time of referral
for a multifamily rental Development, the referral letter from the
referring Division will require the Responsible Party who Controls
the Development to provide a listing of the Actively Monitored Developments
in their portfolio. The Secretary will use this information to help
determine whether mandatory Debarment should be simultaneously considered
by the Enforcement Committee in accordance with §2.401(e)(2)
of this section, related to repeated violations.
(c) The Secretary shall promptly contact the Responsible
Party. If fully acceptable corrective action documentation is submitted
to the referring division before the Secretary sends an informal conference
notice, the referral shall be closed with no further action provided
that the Responsible Party is not subject to consideration for Debarment
and provided that the referring division does not wish to move forward
with the referral based upon a pattern of repeated violations. If
the Secretary is not able to facilitate resolution, but receives a
reasonable plan for correction, such plan shall be reported to the
Committee to determine whether to schedule an informal conference,
modify the plan, or accept the plan. If accepted, plan progress shall
be regularly reported to the Committee, but an informal conference
will not be held unless the approved plan is substantively violated,
or an informal conference is later requested by the Committee or the
Responsible Party. Plan examples include but are not limited to: a
rehabilitation plan with a scope of work or contracts already in place,
plans approved by the Department as part of the Previous Participation
Review process provided for in 10 TAC Subchapter C for an ownership
transfer or funding application, plans approved by the Executive Director,
plans approved by the Asset Management Division, and/or plans relating
to newly transferred Developments with unresolved Events of Noncompliance
originating under prior ownership. Should the Secretary and Responsible
Party fail to come to, an agreement or closer of the referral, or
if the Responsible Party or ownership group's prior history of administrative
penalty referrals does not support closure, or if consideration of
Debarment is appropriate, the Secretary will schedule an informal
conference with the Responsible Party to attempt to reach an agreed
resolution.
(d) When an informal conference is scheduled, a deadline
for submitting Corrective Action documentation will be included, providing
a final opportunity for resolution. If compliance is achieved at this
stage, the referral will be closed with a warning letter provided
that factors, as discussed below, do not preclude such closure. Closure
with a warning letter shall be reported to the Committee. Factors
that will determine whether it is appropriate to close with a warning
letter include, but are not limited to:
(1) Prior Enforcement Committee history relating to
the Development or other properties in the ownership group;
(2) Prior Enforcement Committee history regarding similar
federal or state Programs;
(3) Whether the deadline set by the Secretary in the
informal conference notice has been met;
(4) Whether the Committee has set any exceptions for
certain finding types; and
(5) Any other factor that may be relevant to the situation.
(e) If an informal conference is held:
(1) Notwithstanding the Responsible Party's attendance
or presence of an authorized representative, the Enforcement Committee
may proceed with the informal conference;
(2) The Responsible Party may, but is not required
to be, represented by legal counsel of their choosing at their own
cost and expense;
(3) The Responsible Party may bring to the meeting
third parties, employees, and agents with knowledge of the issues;
(4) Assessment of an administrative penalty and Debarment
may be considered at the same informal conference; and
(5) In order to facilitate candid dialogue, an informal
conference will not be open to the public; however, the Committee
may include such other persons or witnesses as the Committee deems
necessary for a complete and full development of relevant information
and evidence.
(f) An informal conference may result in the following,
which shall be reported to the Executive Director:
(1) An agreement to dismiss the matter with no further
action;
(2) A compliance assistance notice issued by the Committee,
available for Responsible Parties appearing for the first time before
the Committee for matters which the Committee determines do not necessitate
the assessment of an administrative penalty, but for which the Committee
wishes to place the Responsible Party on notice with regard to possible
future penalty assessment;
(3) An agreement to resolve the matter through corrective
action without penalty with a clear timeline included. If the agreement
is to be included in an order, a proposed agreed order will be prepared
and presented to the Board for approval;
(4) An agreement to resolve the matter through corrective
action with the assessment of an administrative penalty which may
be probated in whole or in part, and may, where appropriate, include
additional action to promote compliance such as requirements to obtain
training. In this circumstance, a proposed agreed order will be prepared
and presented to Department's Governing Board for approval;
(5) A recommendation by the Committee to the Executive
Director to determine that a violation occurred, and to issue a report
to the Board and a Notice of Violation to the Responsible Party, seeking
the assessment of administrative penalties through a contested case
hearing with the State Office of Administrative Hearings (SOAH); or
(6) Other action as the Committee deems appropriate.
(g) Upon receipt of a recommendation from the Committee
regarding the issuance of a report and assessment of an administrative
penalty under subsection (f)(5), the Executive Director shall determine
whether a violation has occurred. If needed, the Executive Director
may request additional information and/or return the recommendation
to the Committee for further development. If the Executive Director
determines that a violation has occurred, the Executive Director will
issue a report to the Board in accordance with §2306.043 of the
Texas Government Code.
(h) Not later than 14 days after issuance of the report
to the Board, the Executive Director will issue a Notice of Violation
to the Responsible Party, along with a Notice of Violation for Property
Posting (which shall be printed and posted in two prominent places
on the property subject to the Notice, and photographic proof of the
posting shall be made). The Notice of Violation issued by the Executive
Director will include:
(1) A summary of the alleged violation(s) together
with reference to the particular sections of the statutes and rules
alleged to have been violated;
(2) A statement informing the Responsible Party of
the right to a hearing before the SOAH, if applicable, on the occurrence
of the violation(s), the amount of penalty, or both;
(3) Any other matters deemed relevant, including the
requirements regarding the Notice of Violation for Property Posting;
and
(4) The amount of the recommended penalty. In determining
the amount of a recommended administrative penalty, the Executive
Director shall take into consideration the statutory factors at Tex.
Gov't Code §2306.042 the penalty schedule shown in the tables
in subsection (k) of this section and in the instance of a proceeding
to assess administrative penalties against a Responsible Party administering
the annual block grant portion of CDBG, CSBG, or LIHEAP, whether the
assessment of such penalty will interfere with the uninterrupted delivery
of services under such program(s). The Executive Director shall further
take into account whether the Department's purposes may be achieved
or enhanced by the use of full or partial probation of penalties subject
to adherence to specific requirements and whether the violation(s)
in question involve disallowed costs.
(i) Not later than 20 days after the Responsible Party
receives the Notice of Violation, the Responsible Party may accept
the requirements of the Notice of Violation or request a SOAH hearing.
(j) If the Responsible Party requests a hearing or
does not respond to the Notice of Violation, the Executive Director,
with the approval of the Board, shall cause the hearing to be docketed
before a SOAH administrative law judge in accordance with §1.13
of this title (relating to Contested Case Hearing Procedures), which
outlines the remainder of the process.
(k) Penalty schedules.
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