(a) Except as provided by subsection (b), parties to a contested case filed under this subchapter are required to participate in mediation before the department will refer a contested case to SOAH for a hearing.
(b) This section does not limit the parties' ability to settle a case without mediation.
(c) The department will provide mediation services by a staff member qualified to serve as an impartial third party in accordance with Civil Practice and Remedies Code, Chapter 154.
(d) The mediation will conclude within 60 days of the date a contested case is assigned to a department mediator, unless the mediation deadline is extended. The department mediator may extend the mediation deadline based on a written request by a party or at the department mediator's discretion.
(e) If the parties do not agree on a mediation date within 30 days, the department mediator may set a date for mediation by notifying the parties in writing at least 10 days before the mediation date.
(f) At the discretion of the department mediator, a party may participate in scheduled mediation either in person or remotely using telephonic or videoconferencing technology.
(g) A party that declines to use the assigned department mediator shall:
  (1) confer with each contested case party; and
  (2) within 30 days of receiving notice from the department under §224.88 of this title (relating to Docketing and Notice of a Protest or Complaint), file with the department a joint notice of intent to retain a private mediator.
(h) The joint notice of intent to retain a private mediator must include:
  (1) the name, address, email address, and telephone number of the private mediator agreed upon by the parties;
  (2) a statement that the parties have entered into an agreement with the private mediator regarding the mediator's rate, method of compensation, and party responsibility for fee payment;
  (3) an affirmation that the private mediator qualifies for appointment as an impartial third party in accordance with Civil Practice and Remedies Code, Chapter 154;
  (4) a statement that the mediation will conclude within 60 days of the department's notice under §224.88 of this title, unless the mediation deadline is extended at the department's discretion; and
  (5) the signature of each party or authorized representative.
(i) All communication and documents provided by a contested case party or invited person in a mediation are confidential and subject to the Governmental Dispute Resolution Act, Government Code, §2009.054.
(j) An agreement reached by the contested case parties in mediation shall be reduced to writing and signed by the parties.
(k) Within 10 days of the conclusion of a mediation, a mediator shall provide to the department and to the parties a written report stating:
  (1) whether the parties attended and participated in the mediation;
  (2) whether the matter settled in part or in whole;
  (3) any unresolved issues remaining in the contested case; and
  (4) any other stipulations or matters the parties agree to report.
(l) Upon receipt of the mediator's report required under this section, the department shall:
  (1) enter an order disposing of resolved issues;
  (2) refer unresolved issues to SOAH for a hearing on the merits; and
  (3) inform SOAH whether a party refused to attend or participate in a mediation.
(m) If a party refused to attend or participate in a mediation, an ALJ may recommend a sanction in the proposal for decision.

Source Note: The provisions of this §224.90 adopted to be effective June 1, 2024, 49 TexReg 2771