Negotiated Rulemaking and Alternative Dispute Resolution
As stated in the Texas Lottery Commission’s rules at 16 Texas Administrative Code (TAC) §403.115 (copied below), “It is the Commission's policy to encourage the use of negotiated rulemaking under Government Code Chapter 2008, and appropriate alternative dispute resolution procedures under Government Code Chapter 2009.” The availability of these procedures at the Texas Lottery Commission is described below. However, the procedures set forth in Chapters 2008 and 2009 supplement (and do not replace) other processes the Commission may use to develop administrative rule proposals using stakeholder input, or to settle a contested case or other internal or external dispute under the Commission’s jurisdiction. In addition, contract claims asserted by a contractor against the Commission are governed by Texas Government Code Chapter 2260 and the Commission’s rules at 16 TAC §§ 403.201 - 403.223.
1. NEGOTIATED RULEMAKING UNDER CHAPTER 2008
The Commission, the Executive Director (for lottery rules), or the Charitable Bingo Operations Director (for charitable bingo rules), either on their own initiative or in response to a request from an interested person(s), may propose to engage in negotiated rulemaking under Texas Government Code Chapter 2008 to obtain assistance in drafting a proposed rule. Upon receipt of a request for negotiated rulemaking under Chapter 2008 from a person outside the agency, the Executive Director or the Charitable Bingo Operations Director (as applicable), or their designee, shall act as the negotiated rulemaking convener and will coordinate the identification of interested parties and stakeholders. The convener will recommend to the Commission whether the negotiated rulemaking process is a feasible way to address the proposed rule or subject. The Commission will consider the recommendation, and then may direct staff to engage in negotiated rulemaking proceedings under Chapter 2008. The convener may act as the facilitator over the proceedings, may designate a member of commission staff, or may contract to provide a third-party, such as a State Office of Administrative Hearings (SOAH) ALJ, to facilitate the negotiated rulemaking proceeding.
The Commission staff will collect data periodically regarding the status of negotiated rulemaking proceedings conducted under Chapter 2008 and instances where other processes were used to develop administrative rule proposals using stakeholder input.
2. ALTERNATIVE DISPUTE RESOLUTION UNDER CHAPTER 2009
The Commission encourages the fair and expeditious resolution of disputes involving Commission stakeholders, whether internal or external, through the use of ADR under Texas Government Code Chapter 2009. ADR includes “any procedure or combination of procedures described by Civil Practice and Remedies Code, Chapter 154.”
A. Ground Rules
Any ADR procedure shall conform to Chapter 2009 and the model guidelines issued by SOAH. This includes the application of any confidentiality requirements regarding the information discussed by the participants in mediation, and any qualified immunity provided to mediators under Texas Government Code Chapters 154 and 2009.
The Commission will engage impartial mediators to assist the parties to mediate an external lottery or bingo dispute. Mediators should be trained according to the requirements under Section 154.052, Texas Civil Practice and Remedies Code, and should follow the Ethical Guidelines for Mediators approved by the Texas Supreme Court. Mediators shall be impartial third parties to the dispute that they mediate, and can be employees or non-employees of the Commission. To the extent possible, the Commission will engage the services of mediators employed by SOAH. However, there may be instances where obtaining a SOAH mediator is not feasible, efficient, or cost effective.
To further the goal of providing effective ADR for its internal and external clients, the Commission will provide training to its staff as necessary to aid in the implementation of this policy. Additionally, Commission staff will collect data periodically regarding the status of all ADR cases (either conducted under Chapter 2009 or resolved by other means).
B. External
Any enforcement proceeding against a lottery or bingo licensee is eligible for formal or informal dispute resolution. Upon notice of a possible violation of a statutory provision or rule under the Commission’s jurisdiction, the Commission will send a letter, known as a “Show Cause Letter” or “Determination Letter,” to the affected person or entity. The affected party will have the opportunity to meet with authorized representatives of the Commission in an attempt to resolve the matter without further proceedings. See, e.g., 16 TAC §402.708, Dispute Resolution (regarding bingo disputes). If an agreement is not reached, then the matter may be docketed as a contested case before SOAH. At that stage, the affected party will have the opportunity to request mediation before a SOAH mediator. The request may be made to the assigned SOAH ALJ for the case, according to the SOAH ADR policy. Prior to requesting mediation from SOAH, the affected party is encouraged to approach the Commission’s attorney first with its ADR request to obtain an agreement regarding ADR, which may result in an agreed motion for ADR to the SOAH ALJ. A mediator selected to facilitate ADR may not serve as the ALJ for any contested matters arising from that matter. There may or may not be charges to a third party who requests a mediation from SOAH.
While the Commission encourages the use of ADR as a method to resolve eligible disputes, the Commission recognizes that some enforcement cases cannot be resolved through ADR. The Commission will make all reasonable efforts to agree to requests for mediation, unless an affected party is seeking mediation simply to delay the prosecution of a contested case or otherwise acting in bad faith.
If there are other types of complaints for which an external stakeholder would like to seek mediation, such a request should be made to the General Counsel, who will then assess the request to determine if it is within the Commission’s jurisdiction and otherwise eligible for ADR relief.
C. Internal
If a Commission employee wishes to seek mediation regarding a complaint filed with Commission management, that person may make a request for ADR services to the Human Resources (HR) Director. The HR Director will make the decision regarding whether to engage in mediation or other ADR procedures in consultation with the Executive Director, the General Counsel, and any other necessary agency personnel. Either an eligible Commission employee mediator, or a third-party mediator may be provided to conduct the mediation.
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Rule 403.115. Negotiated Rulemaking and Alternative Dispute Resolution. (a) Policy. It is the Commission's policy to encourage the use of negotiated rulemaking under Government Code, Chapter 2008, and appropriate alternative dispute resolution procedures under Government Code, Chapter 2009.
(b) Negotiated Rulemaking. The Commission, the Executive Director (for lottery rules), or the Charitable Bingo Operations Director (for charitable bingo rules), either on it/his/her own initiative or in response to a request from an interested person(s), may propose to engage in negotiated rulemaking to obtain assistance in drafting a proposed rule, in accordance with the provisions of Government Code, Chapter 2008. By way of example only, negotiated rulemaking may be appropriate when multiple constituencies are involved; the subject matter is complex or controversial; or the Commission lacks complete information.
(1) When negotiated rulemaking is proposed, the Executive Director (for lottery rules) or the Charitable Bingo Operations Director (for charitable bingo rules), or their designee, shall be the negotiated rulemaking convener.
(A) The convener shall assist in identifying persons who are likely to be affected by a proposed rule, including those who oppose the issuance of a rule. The convener shall discuss with those persons or their representatives the items listed in Government Code §2008.052(c).
(B) The convener shall then recommend to the Commission whether negotiated rulemaking is a feasible method to develop the proposed rule and shall report on the relevant considerations, including the items listed in Government Code §2008.052(d).
(2) Upon consideration of the convener's recommendation, the Commission may approve Commission staff to engage in negotiated rulemaking in accordance with the provisions of Government Code, Chapter 2008. The Commission may authorize the staff to perform the duties and requirements set forth in Chapter 2008, including providing any required notices, establishing a negotiated rulemaking committee and appointing the members of the committee, and appointing a facilitator.
(c) Alternative Dispute Resolution. The Commission encourages the fair and expeditious resolution of internal and external disputes under the Commission's jurisdiction through alternative dispute resolution (ADR) procedures. ADR procedures include any procedure or combination of procedures described by Civil Practice and Remedies Code, Chapter 154. ADR procedures are intended to supplement and not limit other dispute resolution procedures available for use by the Commission.
(1) Any ADR procedure used to resolve disputes under the Commission's jurisdiction shall conform with Government Code, Chapter 2009, and, to the extent possible, the model guidelines for the use of ADR issued by the State Office of Administrative Hearings (SOAH).
(2) The Commission, the Executive Director, or the Charitable Bingo Operations Director, either on it/his/her own initiative or in response to a request from a person involved in a dispute with the Commission, may direct an unresolved internal or external dispute, including but not limited to a lottery or bingo licensing matter, a bingo audit matter, a personnel matter, or a contested case to ADR, and will determine, in consultation with the Legal Services Division staff, which method of ADR is most appropriate.
(3) Breach of Contract Claims. Notwithstanding the foregoing, contract claims asserted by a contractor against the Commission are governed by Government Code, Chapter 2260 and the Commission Rules at §§403.201 - 403.223 of this title (relating to General Administration), and not this section.
(d) The Commission may adopt written procedures to further implement negotiated rulemaking and ADR procedures under this section, including procedures to designate a coordinator to implement the Commission's policy under this section and to collect data concerning the effectiveness of negotiated rulemaking and ADR procedures.