Bill Text: TX SB1603 | 2017-2018 | 85th Legislature | Introduced

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Bill Title: Relating to state agency investigations.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-03-21 - Referred to Business & Commerce [SB1603 Detail]

Download: Texas-2017-SB1603-Introduced.html

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By: Estes S.B. No. 1603

A BILL TO BE ENTITLED
AN ACT
relating to state agency investigations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. DUE PROCESS IN STATE AGENCY INVESTIGATIONS
SECTION 1.01. Chapter 2001, Government Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. STATE AGENCY INVESTIGATIONS
Sec. 2001.301. DEFINITIONS. In this subchapter:
(1) "Enabling statute" means the statute or rule that
authorizes a state agency to conduct a state agency investigation.
(2) "Request" means a subpoena, civil investigative
demand, request for documents, sworn interrogatory, request for
admission, or request for deposition issued by a state agency as
part of a state agency investigation.
(3) "Requesting agency" means a state agency issuing a
request.
(4) "Responding party" means a party receiving a
request.
(5) "State agency" means an officer, board,
commission, or department in the executive branch of state
government that has statewide jurisdiction.
(6) "State agency investigation" means the efforts of
a state agency to obtain information from a nongovernmental party.
The term does not include:
(A) discovery conducted during a contested case
proceeding under this chapter;
(B) discovery conducted as part of a lawsuit
subject to state or federal rules of civil procedure;
(C) information sought in a criminal or family
law matter; or
(D) information required to be disclosed,
reported, or tendered pursuant to the terms of a valid contract or
lease between the agency and the nongovernmental party.
Sec. 2001.302. APPLICABILITY; CONFLICT OF LAWS. (a) This
subchapter applies to a state agency investigation conducted by a
state agency.
(b) This subchapter is intended to expand the legal
protections provided to a responding party who is subject to a state
agency investigation. To the extent another statute or rule
provides greater legal protections to a responding party than the
legal protections provided in this subchapter, a responding party
is entitled to rely on and receive the legal protection of the other
statute or rule.
Sec. 2001.303. ENABLING STATUTE AUTHORIZATION. A state
agency investigation must be authorized by an enabling statute that
expressly allows the requesting agency to issue a request. This
subchapter is not an enabling statute and does not provide a state
agency with an independent basis for conducting a state agency
investigation.
Sec. 2001.304. CONTENTS OF REQUEST. Each request submitted
by a state agency must:
(1) reference the enabling statute that authorizes the
requesting agency to make the request;
(2) state the applicable time for the responding party
to respond to the request;
(3) state with specificity the information sought from
the responding party; and
(4) specify the form in which the information must be
provided to the requesting agency.
Sec. 2001.305. PERMISSIBILITY OF AGREEMENTS. A requesting
agency and responding party may agree to any terms to facilitate a
state agency investigation, including terms that modify the
provisions of this subchapter. The requesting agency and the
responding party may agree to extend any response time established
by this subchapter or another time applicable to a state agency
investigation, including the time for filing a petition under
Section 2001.313.
Sec. 2001.306. OBJECTIONS TO REQUEST. A responding party
may object to a request on the basis that it is overly broad, unduly
burdensome, irrelevant, vague, ambiguous, or based on another
ground that would be a valid objection to a discovery request made
under the Texas Rules of Civil Procedure.
Sec. 2001.307. ASSERTIONS OF PRIVILEGE. (a) A responding
party may withhold information responsive to a request if the
information is a trade secret or protected by any privilege
recognized by law, the Texas Rules of Civil Procedure, or the Texas
Rules of Evidence.
(b) If information is withheld under Subsection (a), the
responding party must submit to the requesting agency a response
that includes:
(1) a statement that information or material
responsive to the request has been withheld;
(2) a description of the request to which the
information or material relates; and
(3) the privilege asserted.
(c) After receiving a response indicating that material or
information has been withheld, the requesting agency may serve a
written request that the responding party identify the information
and material withheld. Not later than the 15th day after the date
the request under this subsection is received, the responding party
must submit to the requesting agency a response that:
(1) describes the information or materials withheld
that, without revealing the privileged information or otherwise
waiving the privilege, enables the requesting agency to assess the
applicability of the privilege; and
(2) asserts a specific privilege for each item or
group of items withheld.
(d) Without complying with Subsections (a) and (b), a
responding party may withhold a privileged communication to or from
an attorney or attorney's representative or a privileged document
of an attorney or attorney's representative created or made from
the point at which the responding party consults an attorney with a
view to obtaining professional legal services from the attorney
related to the request.
Sec. 2001.308. COMPLIANCE WITH REQUEST. (a) A responding
party must timely respond to a valid request that complies with this
subchapter. A responding party is not required to respond to a
request that:
(1) does not comply with this subchapter; or
(2) is invalid under the appropriate enabling statute
or other law.
(b) If a responding party objects to a request or asserts a
privilege, the responding party is not required to respond to the
portion of the request covered by the privilege or objection until
ordered to comply:
(1) by a court; or
(2) as part of a final decision in a contested case.
(c) The responding party shall timely respond to the
portions of a request that are not covered by an objection or
assertion of privilege.
Sec. 2001.309. REMEDIES FOR REQUESTING AGENCY: CONTESTED
CASE. (a) A requesting agency may initiate a contested case to
obtain:
(1) a response from a responding party who has failed
to comply with a request; or
(2) a ruling on an objection or assertion of privilege
made by a responding party.
(b) A contested case initiated under Subsection (a) must be
conducted in accordance with the rules and other procedures of the
requesting agency for other contested cases. If the requesting
agency has not adopted rules or procedures for contested cases, the
contested case is governed by this chapter. A decision in a
contested case under this section may be appealed in accordance
with this chapter.
(c) Except as provided by Subsection (d), in a contested
case initiated under this subchapter, the relief sought by the
requesting agency is limited to an order requiring compliance with
the request, and a responding party's failure to comply with this
subchapter does not entitle the requesting agency to seek
administrative penalties, attorney's fees, or other remedies.
(d) If the presiding officer in a contested case initiated
under Subsection (a) determines that a responding party objected to
a request in bad faith or asserted a privilege in bad faith, the
presiding officer may award the agency administrative penalties,
attorney's fees, or other remedies sufficient to deter future bad
faith conduct.
(e) This subchapter does not prohibit a requesting agency
from taking other action to ensure compliance with a state agency
investigation authorized by the requesting agency's enabling
statute. The requesting agency may combine a request for relief
under this subchapter with an action for administrative penalties
and other remedies authorized by the requesting agency's enabling
statute.
Sec. 2001.310. CONDUCT OF STATE AGENCY INVESTIGATIONS. In
a state agency investigation conducted under this subchapter, a
responding party is entitled to be represented by counsel and may
cross-examine witnesses.
Sec. 2001.311. ORAL EXAMINATION. (a) The examination of
any witness under a demand for oral testimony served under this
section must be taken before a person authorized to administer
oaths and affirmations by state or federal law. The person before
whom the testimony is to be taken shall administer the oath or
affirmation and personally, or by someone acting under the person's
direction in the person's presence, record the witness's testimony.
At the expense of the requesting agency, the testimony must be taken
stenographically and may be transcribed.
(b) The witness's oral testimony under this section must be
taken in the county in which the witness resides, is found, or
transacts business or in another place agreed to by the witness and
the requesting agency.
(c) Any witness compelled to appear under this section may
be accompanied, represented, and advised by an attorney. The
attorney may advise the witness in confidence on any question
arising in connection with the examination.
(d) The person conducting the examination on behalf of the
requesting agency shall exclude from the place of examination all
other persons except the witness being examined, the witness's
attorney, the person before whom the testimony is to be taken, any
stenographer taking the testimony, and any persons assisting the
person conducting the examination.
(e) During the examination, the witness being examined or
the witness's attorney may object on the record to any question,
wholly or partly, and shall briefly state for the record the reason
for the objection. An objection may properly be made, received, and
entered on the record when it is claimed that the witness is
entitled to refuse to answer the question on grounds of any
constitutional or other legal right or privilege, including the
privilege against self-incrimination. The witness or the witness's
attorney may not otherwise object to or refuse to answer any
question or interrupt the oral examination. If the witness refuses
to answer any question, the requesting agency may petition the
district court in the county in which the examination is being
conducted for an order compelling the witness to answer the
question.
(f) If the testimony is fully transcribed, the person before
whom the testimony was taken shall promptly transmit the transcript
of the testimony to the witness and a copy of the transcript to the
requesting agency. The witness shall have a reasonable opportunity
to examine the transcript and make any changes in form or substance
accompanied by a statement of the reasons for the changes. The
witness shall sign and return the transcript, unless the witness is
ill, cannot be found, refuses to sign, or in writing waives the
signing. If the witness does not sign the transcript on or before
the 15th day after the date the witness receives the transcript, the
person before whom the testimony has been given shall sign it and
state on the record the reason, if known, for the witness's failure
to sign. The person transcribing the testimony shall certify on the
transcript that the witness was duly sworn and that the transcript
is a true record of the testimony given by the witness and promptly
transmit a copy of the certified transcript to the requesting
agency.
(g) On request, the requesting agency shall furnish a copy
of the certified transcript to the witness.
(h) The witness is entitled to the same fees and mileage
that are paid to witnesses in the district courts of this state.
ARTICLE 2. CONFORMING CHANGES
SECTION 2.01. Section 2001.003(7), Government Code, is
amended to read as follows:
(7) "State agency" means a state officer, board,
commission, or department with statewide jurisdiction that makes
rules or determines contested cases. The term includes the State
Office of Administrative Hearings for the purpose of determining
contested cases. Except as otherwise provided by this chapter,
the [The] term does not include:
(A) a state agency wholly financed by federal
money;
(B) the legislature;
(C) the courts;
(D) the Texas Department of Insurance, as regards
proceedings and activities under Title 5, Labor Code, of the
department, the commissioner of insurance, or the commissioner of
workers' compensation; or
(E) an institution of higher education.
SECTION 2.02. Subchapter B, Chapter 5, Alcoholic Beverage
Code, is amended by adding Section 5.439 to read as follows:
Sec. 5.439. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.03. Subchapter B, Chapter 15, Business & Commerce
Code, is amended by adding Section 15.101 to read as follows:
Sec. 15.101. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.04. Subchapter E, Chapter 14, Finance Code, is
amended by adding Section 14.2029 to read as follows:
Sec. 14.2029. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.05. Subchapter C, Chapter 35, Finance Code, is
amended by adding Section 35.2029 to read as follows:
Sec. 35.2029. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.06. Subchapter B, Chapter 66, Finance Code, is
amended by adding Section 66.0539 to read as follows:
Sec. 66.0539. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.07. Subchapter B, Chapter 96, Finance Code, is
amended by adding Section 96.0569 to read as follows:
Sec. 96.0569. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.08. Subchapter B, Chapter 126, Finance Code, is
amended by adding Section 126.0529 to read as follows:
Sec. 126.0529. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.09. Subchapter C, Chapter 36, Insurance Code, is
amended by adding Section 36.1515 to read as follows:
Sec. 36.1515. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this subtitle is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this subtitle and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.10. Subchapter G, Chapter 51, Occupations Code,
is amended by adding Section 51.35119 to read as follows:
Sec. 51.35119. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.11. Subchapter A, Chapter 153, Occupations Code,
is amended by adding Section 153.0069 to read as follows:
Sec. 153.0069. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.12. Subchapter G, Chapter 204, Occupations Code,
is amended by adding Section 204.307 to read as follows:
Sec. 204.307. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.13. Subchapter H, Chapter 205, Occupations Code,
is amended by adding Section 205.3589 to read as follows:
Sec. 205.3589. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
SECTION 2.14. Subchapter G, Chapter 206, Occupations Code,
is amended by adding Section 206.3079 to read as follows:
Sec. 206.3079. STATE AGENCY INVESTIGATION. (a) In this
section, "responding party" and "request" have the meanings
assigned by Section 2001.301, Government Code.
(b) A request submitted under this chapter is governed by
Subchapter J, Chapter 2001, Government Code. To the extent of any
conflict between the provisions of this chapter and Subchapter J,
Chapter 2001, Government Code, the provisions that provide the
greatest legal protections to a responding party control.
ARTICLE 3. TRANSITION AND EFFECTIVE DATE
SECTION 3.01. Subchapter J, Chapter 2001, Government Code,
as added by this Act, applies only to a request submitted to a
responding party by a state agency on or after the effective date of
this Act. A request submitted before that date is governed by the
law in effect on the date the request was submitted, and that law is
continued in effect for that purpose.
SECTION 3.02. This Act takes effect September 1, 2017.