Can a Texas state agency make you pay a fine to settle a license case if no statute lets it fine you?

Texas AG Opinion JM-1084: Can an Agency Impose a Fine It Was Never Given?

Plain-English summary

The Commissioner of the Texas Department of Labor and Standards asked the Attorney General a clean question about the limits of agency power. In a contested case over an auctioneer's license, could the agency settle the case by having the auctioneer agree to pay a civil penalty to the state instead of losing the license? The commissioner pointed to a provision of the state administrative procedure law that lets agencies dispose of contested cases informally through settlement.

The Attorney General said no. The auctioneer statute, article 8700, is the source of the commissioner's power over auctioneer licenses, and it authorizes only three things: to deny, to suspend, or to revoke a license, for the causes the statute lists. It says nothing about civil penalties. The provision the commissioner relied on, section 13(e) of the Administrative Procedure and Texas Register Act (APTRA), says that "unless precluded by law, informal disposition may be made of any contested case by stipulation, agreed settlement, consent order, or default." The opinion read that as a purely procedural rule. It lets the parties resolve a case by agreement rather than a full formal hearing, but it does not hand the agency any new substantive power. An agency that can only suspend or revoke a license cannot, by using the settlement provision, start collecting fines the legislature never authorized.

The opinion backed this up with the provision's history and how other states read the same words. Section 13(e) has been in APTRA since 1975 and is taken word-for-word from the Revised Model State Administrative Procedure Act of 1961. Many other states have adopted identical or nearly identical language, and the Attorney General found no case, in Texas or elsewhere, reading that language as expanding an agency's authority over the sanctions it may impose in a contested case. The provision's purpose is to allow settlement of contested matters without formal proceedings, not to enlarge what the agency can order.

Currency note

This opinion was issued in 1989. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Administrative Procedure and Texas Register Act (former article 6252-13a) has since been recodified into the Government Code as the Administrative Procedure Act, and the auctioneer statute and the structure of the Department of Labor and Standards have changed since 1989. The specific article numbers used here are historical. The general principle, that a procedural settlement provision does not add substantive sanctions an agency's own statute does not authorize, should be checked against current administrative law before it is relied on.

Who this opinion affected (as of 1989)

The Department of Labor and Standards: The opinion told the commissioner that the settlement provision was not a shortcut to a fining power. In an auctioneer license case, the agency's options were the ones article 8700 gave it: deny, suspend, or revoke.

Licensed auctioneers and applicants: The opinion protected them from being asked to pay a civil penalty the auctioneer statute did not authorize, even as part of a negotiated settlement.

Other Texas agencies reading APTRA: The reasoning applied broadly. An agency whose enabling statute lists specific sanctions could not use the APTRA settlement provision to impose a different kind of sanction, such as a monetary penalty, that its own statute did not provide.

Common questions

Can a Texas agency fine you to settle a license dispute if its statute doesn't mention fines?
Under this opinion, no. The agency's sanctions are limited to what its own enabling statute authorizes. For auctioneer licenses, that was denial, suspension, or revocation, not civil penalties.

What does the APTRA settlement provision actually do?
Section 13(e) allows informal disposition of a contested case by stipulation, agreed settlement, consent order, or default. The opinion described it as purely procedural: it lets parties settle without a formal hearing but does not add new sanctions.

Why did the AG look at other states?
Because section 13(e) is copied from the Revised Model State Administrative Procedure Act of 1961, which many states adopted. The absence of any case, in Texas or elsewhere, reading the language as expanding agency sanction authority supported the conclusion that it does not.

Could the agency and the auctioneer just agree to a penalty voluntarily?
The opinion's logic was that the commissioner had no authority to impose a civil penalty in lieu of the statutory sanctions, and the settlement provision did not create that authority. The available dispositions were tied to what article 8700 allowed.

Background and statutory framework

Article 8700, V.T.C.S., regulated auctioneers. Section 3 required a person to be licensed by the Commissioner of the Texas Department of Labor and Standards to act as an auctioneer. Section 9 let the commissioner make reasonable rules on licensure applications and on "the issuance, denial, suspension, and revocation of licences, and the conduct of hearings consistent with the provisions of The Administrative Procedures Act." Section 7(a) provided that the commissioner "may deny, suspend, or revoke the licence of any auctioneer" for specified causes. Subsections (b) through (d) required notice and a hearing before denial, suspension, or revocation, and subsection (e) required the hearing to give due process and to be consistent with the Administrative Procedure and Texas Register Act (article 6252-13a).

The Administrative Procedure and Texas Register Act (APTRA), V.T.C.S. art. 6252-13a, was enacted to provide minimum standards of uniform practice and procedure for state agencies. Id. § 1. Section 13 governs hearings in contested cases, including notice and record-keeping. Section 13(e) provides: "Unless precluded by law, informal disposition may be made of any contested case by stipulation, agreed settlement, consent order, or default."

The opinion concluded that section 13(e) does not expand the commissioner's authority to impose sanctions beyond those authorized in article 8700 in a contested auctioneer-licensure case. Because article 8700 authorized the commissioner only to deny, suspend, or revoke licenses, the commissioner had no authority to impose a civil penalty in lieu of those sanctions.

The opinion supported that reading with the provision's history. Section 13(e) has appeared in APTRA since its original 1975 enactment and is identical to section 9(d) of the Revised Model State Administrative Procedure Act of 1961. Acts 1975, 64th Leg., ch. 61, at 140. Numerous other states adopted identical or substantially similar language, and the opinion found no case in Texas or in those states construing the language as expanding an agency's authority over the sanctions it may impose or the actions it may take in a contested case. The provision's purpose appeared to be purely procedural: to allow, where the parties agree, the settlement or other informal disposition of contested matters without formal proceedings. See, e.g., Gloss v. Delaware & Hudson Ry. Co., 378 A.2d 507 (Vt. 1977).

Citations

Statutory authorities:

• V.T.C.S. art. 8700 (auctioneer statute); § 3 (license required); § 7 (denial, suspension, revocation, and hearing procedure); § 9 (commissioner's rulemaking authority)
• V.T.C.S. art. 6252-13a (Administrative Procedure and Texas Register Act); § 1 (purpose); § 13 (contested-case hearings; subsection (e) informal disposition)
• Acts 1975, 64th Leg., ch. 61, at 140 (original APTRA enactment); Revised Model State Administrative Procedure Act of 1961, § 9(d) (source of section 13(e))

Cases:

• Gloss v. Delaware & Hudson Ry. Co., 378 A.2d 507 (Vt. 1977) (settlement provision is procedural)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1084
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1084.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative. (The scan mis-renders the issue year as "1588"; from the surrounding sequence it is 1989.)

August 9, 1989

Mr. Richard L. Morgan
Commissioner
Texas Department of Labor and Standards
P. O. Box 12157
Austin, Texas 78711

Opinion No. JM-1084

Re: Authority of the Department of Labor and Standards to enter into a settlement agreement which provides for a civil penalty under article 8700, V.T.C.S., the auctioneer statute (RQ-1721)

Dear Mr. Morgan:

You ask:

In a contested case under Article 8700, Section 7(a) and (e), can this administrative agency enter a settlement agreement pursuant to Article 6252-13a, Section 13(e) whereby the Respondent agrees to pay a civil penalty to the State of Texas in lieu of license forfeiture or suspension?

Article 8700, V.T.C.S., provides for the regulation of auctioneers in Texas. Section 3 of the article provides that no person may act as an auctioneer in Texas unless he is licensed by the Commissioner of the Texas Department of Labor and Standards. Section 9 provides that the commissioner may make reasonable rules and regulations relating to licensure applications, as well as "the issuance, denial, suspension, and revocation of licences, and the conduct of hearings consistent with the provisions of The Administrative Procedures Act." Section 7 provides in subsection (a) that the "commissioner may deny, suspend, or revoke the licence of any auctioneer" for specified causes. Subsections (b) through (d) of section 7 provide that "before denying an application for a license or before suspending or revoking any license," the commissioner shall give notice and set the matter for a hearing at which the applicant or licensee is entitled to be present and offer evidence. Subsection (e) provides:

The hearing must be conducted in a manner that will give to the applicant or licensee due process of law and that is consistent with the provisions of the Administrative Procedure and Texas Register Act (Article 6252-13a, Vernon's Texas Civil Statutes).

The Administrative Procedure and Texas Register Act (APTRA), V.T.C.S. art. 6252-13a, was enacted to provide minimum standards of uniform practice and procedure for state agencies. Id. § 1. Section 13 provides for hearings of contested cases, including notice and record keeping requirements. Subsection (e) of section 13 provides:

Unless precluded by law, informal disposition may be made of any contested case by stipulation, agreed settlement, consent order, or default.

In response to your question, we conclude that subsection (e) does not expand the authority of the commissioner to impose sanctions beyond those authorized in article 8700, V.T.C.S., in a contested case on auctioneer licensure. Since article 8700 authorizes the commissioner only to "deny, suspend, or revoke" licenses, the commissioner has no authority to impose a civil penalty in lieu of the sanctions available under article 8700, V.T.C.S.

The language of subsection (e) of section 13 has appeared in APTRA since its original enactment in 1975 and is identical with that in section 9, subsection (d), of the Revised Model State Administrative Procedure Act of 1961. Acts 1975, 64th Leg., ch. 61, at 140. Numerous other states have adopted, as part of their administrative procedure laws, provisions identical or substantially similar to those of section 13, subsection (e). We find no cases in Texas or in states having provisions identical or similar to the provisions of subsection (e) that construe such language as expanding an agency's authority as to sanctions it may impose or other actions it may take in a contested case. The purpose of subsection (e) appears to be purely procedural, i.e., to allow, where the parties agree, for the settlement or other informal disposition of contested matters without the need of formal proceedings. See, e.g., Gloss v. Delaware & Hudson Ry. Co., 378 A.2d 507 (Vt. 1977).

SUMMARY

The Commissioner of the Texas Department of Labor and Standards is not authorized to impose civil penalties in contested auctioneer licensure cases by the provisions of either V.T.C.S. article 8700, Section 7, or V.T.C.S. article 6252-13a, section 13(e).

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by William Walker
Assistant Attorney General