(a) Notification.
  (1) The department will notify a motor carrier of an enforcement action by the issuance of a claim letter as described in §4.16(a)(4) of this title (relating to Administrative Penalties, Payments, Collection and Settlement of Penalties).
  (2) The notification may be submitted to the motor carrier's last known address as reflected in the records of the department by certified mail, return receipt requested, or personal service, or another manner of delivery that records the receipt of the notice by the person responsible. Electronic mail may be used provided the department verifies receipt by the person responsible. A notification sent by mail shall be presumed to have been received by the motor carrier five days after the date of the mailing.
  (3) The motor carrier shall respond within 20 calendar days of receipt of the claim letter with one of the following options:
    (A) Payment of the claim in the full amount as outlined in the claim letter; or
    (B) Request, in writing, to make installment payments; or
    (C) Request, in writing, an informal hearing; or
    (D) Request, in writing, an administrative hearing.
  (4) A request under paragraph (3)(C) or (D) of this subsection must contain the following:
    (A) A concise statement of the issues to be presented at the hearing, including the occurrence of the violations, the amount of the penalty, or both;
    (B) defenses the carrier asserts to the department's claim; and
    (C) supporting documents to show defenses and/or financial condition of the carrier.
  (5) A request under paragraph (3)(C) of this subsection that does not contain the information required in paragraph (4) of this subsection may, after notice and a reasonable opportunity to correct the defect, be set for an administrative hearing rather than an informal hearing, at the discretion of the department.
(b) Informal hearing.
  (1) If requested, the department will hold an informal hearing to discuss a penalty recommended under this section. Such hearing will be scheduled and conducted by the manager of the Motor Carrier Bureau or the director's designee.
  (2) An informal hearing shall not be subject to rules of evidence and civil procedure except to the extent necessary for the orderly conduct of the hearing. The department will summarize the nature of the violation and the penalty, and discuss the factual basis for such. The motor carrier will be afforded an opportunity to respond to the allegations verbally and/or in writing.
  (3) After the conclusion of the informal hearing, the department will issue a Memorandum of Decision, which will be provided to the motor carrier. The Memorandum of Decision will contain the following:
    (A) a statement of findings by the department, including a statement of dismissal of charges, modification of penalties, or affirmation of penalties; and
    (B) if the penalties are modified or affirmed, the Memorandum of Decision will be accompanied by a revised claim letter requiring the motor carrier to respond within 20 calendar days of receipt of claim letter with one of the following options:
      (i) Payment of the claim in the full amount as outlined in the claim letter; or
      (ii) Request to make installment payments; or
      (iii) Request an administrative hearing before the State Office of Administrative Hearings.
(c) Administrative Hearing.
  (1) If the motor carrier requests an administrative hearing, as required by subsection (a)(3)(D) or (b)(3)(B)(iii) of this section, the department shall request an administrative hearing before the State Office of Administrative Hearings. The department will provide written notice by certified mail, return receipt requested, or by personal service of such action to the motor carrier. The administrative law judge for the State Office of Administrative Hearings shall issue a proposal for decision setting out the judge's findings of fact, conclusions of law and recommendations in accordance with agency rules and statutes, including a recommendation regarding the award and amount of costs, fees, expenses, and reasonable and necessary attorney's fees incurred by the state.
  (2) The director may adopt those findings and make it part of the director's order; or the director may, pursuant to §2001.058(e), Texas Government Code, increase or decrease the amount of the penalty recommended by the administrative law judge. Notice of the director's order and proposal for decision shall be given to the affected person as required by Chapter 2001, Texas Government Code, and must include a statement that the person is entitled to seek a judicial review of the order. Before the 31st calendar day after the date the director's order becomes final as provided in §2001.004, Texas Government Code, the person must:
    (A) pay the penalty in full;
    (B) pay the penalty in full and file a petition for judicial review contesting:
      (i) the occurrence of the violation(s);
      (ii) the amount of the penalty; or
      (iii) both the occurrence of the violation(s) and the amount of the penalty.
    (C) without paying the penalty, file a petition for review contesting:
      (i) the occurrence of the violation(s);
      (ii) the amount of the penalty; or
      (iii) both the occurrence of the violation(s) and the amount of the penalty.
  (3) A contested case under this subsection will be governed by Texas Government Code, Chapter 2001, subchapters C and D, Texas Transportation Code, §644.153, and 37 TAC, Chapter 29 of this title (relating to General Rules of Practice and Procedure), and not by Title 49, Code of Federal Regulations, Part 386, Subparts D and E.
(d) A final department decision is subject to judicial review under the substantial evidence rule, Texas Government Code, §2001.174. For purposes of collection of the administrative penalty, Final Departmental Decision is defined as:
  (1) the most recent claim letter issued to a motor carrier who fails to request an informal hearing or an administrative hearing within 20 calendar days of receipt of the Notice of Claim; or
  (2) the most recent claim letter issued to a motor carrier who fails to pay or becomes delinquent in the payment of an administrative penalty as outlined in §4.16 of this title (relating to Administrative Penalties, Payment, Collection and Settlement of Penalties); or
  (3) a Final Order issued by the director as a result of an administrative hearing as outlined in this subchapter.

Source Note: The provisions of this §4.17 adopted to be effective March 9, 2004, 29 TexReg 2376; amended to be effective January 4, 2005, 29 TexReg 12235; amended to be effective May 22, 2005, 30 TexReg 3031; amended to be effective January 24, 2006, 31 TexReg 404; amended to be effective June 11, 2008, 33 TexReg 4527; amended to be effective February 25, 2010, 35 TexReg 1470