agencies pay fees when private parties win contested cases

The text as introduced · 443 words

By: Harrison
H.B. No. 5050

A BILL TO BE ENTITLED

AN ACT

relating to the award of reasonable attorney's fees and costs in

connection with certain contested cases.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter G, Chapter 2001, Government Code, is

amended by adding Section 2001.1765 to read as follows:

Sec. 2001.1765. STATE AGENCY PAYMENT OF ATTORNEY'S FEES AND

COSTS IN CONTESTED CASES UNDER JUDICIAL REVIEW. (a) Except as

provided by Subsection (b), a court reviewing a decision in a

contested case shall award a nongovernmental party to the case

under review, in addition to all other costs allowed by law or

rule, reasonable attorney's fees and costs incurred in defending

the case if the nongovernmental party prevails under judicial

review.

(b) A reviewing court may not order a state agency to pay the

reasonable attorney's fees and costs of a prevailing

nongovernmental party in a contested case if:

(1) the agency's only involvement in the case is to

serve as an arbiter of the legal rights, duties, or privileges of

two or more parties; or

(2) the agency's position as a party to the case is no

longer authorized as a result of an intervening amendment to

applicable law.

SECTION 2. Section 2001.903, Government Code, is amended to

read as follows:

Sec. 2001.903. RECOVERY OF ATTORNEY'S FEES AND COSTS IN

CONTESTED CASES INVOLVING [ FRIVOLOUS ] REGULATORY ACTION. The

administrative law judge in a contested case shall [ may ] award a

person, in addition to all other costs allowed by law or rule, an

amount not to exceed $1 million for reasonable attorney's fees and

costs incurred in defending against a [ frivolous ] regulatory action

during the case if there is no judicial review of the decision in

the case and:

(1) the person prevails in the case; and

(2) there is a final determination that :

(A) the regulatory action is frivolous or

groundless;

(B) the state agency pursued the regulatory

action in bad faith;

(C) the regulatory action is not authorized by a

state or federal statute or rule; or

(D) the agency failed to demonstrate the action

is within the authority granted to the agency under state or

federal law .

SECTION 3. The change in law made by this Act applies only

to an action commenced on or after the effective date of this Act.

An action commenced before the effective date of this Act is

governed by the law in effect on the date the action was commenced,

and the former law is continued in effect for that purpose.

SECTION 4. This Act takes effect September 1, 2025.