                               ATTORNEY GENERAL OF TEXAS
                                            GREG       ABBOTT




                                               March 152004



Mr. Danny Payne                                           Opinion No. GA-01 67r
Commissioner
Texas Savings and Loan Department                         Re:     Whether under Finance Code section
2601 North Lamar, Suite 201                               156.209(c), a hearings officer must schedule a
Austin, Texas 78705                                       hearing for a date not later than thirty days after
                                                          the date the Savings and Loan Commissioner
                                                          receives the applicant’s appeal (RQ-0 117-GA)


Dear Mr. Payne:

         Your predecessor     asked about the proper construction       of section 156.209(c) of the Finance
Code.’

         Pursuant to chapter 156 of the Finance Code, the Mortgage Broker License Act, a person may
not act as a mortgage broker in this state without a license issued by the Savings and Loan
Commissioner (the “Commissioner”).        See TEX.FIN. CODEANN. $8 156.201(a) (,‘A person may not
act in the capacity of, engage in the business of, or advertise or hold that person out as engaging in
or conducting the business of a mortgage broker in this state unless the person holds an active
mortgage broker license or is exempt under Section 156.202.“), 156.202 (exemptions) (Vernon Supp.
2004); see also id. $5 156.001 (short title), 156.002( 1) (in chapter 156 “‘Commissioner’ means the
savings and loan commissioner”).         Subchapter C establishes requirements and procedures an
applicant must follow to obtain or renew a license. See id. $6 156.201-.213.

        Section 156.209, the subject of your predecessor’s query, applies if the Commissioner
declines or fails to issue or renew a license. It requires the Commissioner to provide notice to the
applicant and establishes procedural requirements for an administrative appeal that the applicant
must exhaust to later appeal to a district court:

                          (a) If the commissioner declines or fails to issue or renew a
                 license, the commissioner shall promptly give written notice to the
                 applicant or the person requesting the renewal that the application or
                 renewal, as appropriate, was denied.



         ‘See Letter fromDouglas B. Foster, InterimTexas Savings and Loan Commissioner,   to Honorable Greg Abbott,
Texas Attorney General (Oct. 10,2003) (on file with the Opinion Committee) [hereinafter   Request Letter].
Mr. Danny Payne - Page 2                         (GA-0167)




                         (b) Before the applicant or person requesting the renewal may
                appeal to a district court as provided by Section 156.401, the
                applicant or person must file with the commissioner, not later than the
                10th day after the date on which notice under Subsection (a) is
                received, an appeal of the ruling requesting a time and place for a
                hearing before a hearings officer designated by the commissioner.

                        (c) The designated hearings officer shall set the time and
                place for a hearing requested under Subsection (b) not later than the
                30th day after the date on which the appeal is received. The hearings
                officer shall provide at least 10 days’ notice of the hearing to the
                applicant or person requesting the renewal. The time of the hearing
                may be continued periodically with the consent of the applicant or
                person requesting the renewal. After the hearing, the commissioner
                shall enter an order from the findings of fact, conclusions of law, and
                recommendations     of the hearings officer.

                        (d) If an applicant or person requesting the renewal fails to
                request a hearing under this section, the commissioner’s refusal to
                issue or renew a license is final and may not be subject to review by
                the courts.

                        (e) A hearing held under this section is governed by Chapter
                2001, Government Code. An appeal of a final order issued under this
                section may be made in accordance with Section 156.401.

Id. 9 156.209 (emphasis added).

         Your predecessor asked about the time fi-arne for setting the administrative hearing.
Specifically, he asked whether in section 156.209(c) “the words ‘not later than’ modify ‘shall set’
or ‘hearing. “’ Request Letter, supra note 1. In other words, he wished to know whether a hearings
officer designated to hear an applicant’s appeal must schedule the hearing for a date not later than
thirty days after the date the Commissioner receives the appeal or whether the hearings officer must
set the hearing date within that thirty day period, but may actually hold the hearing at a later time.
He informed us that “the Texas Savings and Loan Department . . . has construed and consistently
applied this statute to require the designated hearings officer to set a hearing to be conducted within
thirty days of the Department’s receipt of a request for an appeal.” Id. However, if this office
concludes that the alternate construction is correct, “the Department would construe this statute as
imposing a duty to set a hearing before the thirtieth day of the Department’s receipt of a request for
an appeal . . . , without regard to the date on which the hearing would be held.” Id.

         In construing the first sentence of section 156.209(c), we must give effect to the legislature’s
intent. See TEX. GOV’T CODE ANN. 83 3 11.021, .023 (Vernon 1998); Mitchell Energy Corp. v.
Ashworth, 943 S.W.2d 436, 438 (Tex. 1997). To do so, we must first attempt to construe the
provision according to its plain language. See RepublicBank Dallas, N.A. v. Interkal, Inc., 691
Mr. Danny Payne - Page 3                          (GA-0167)




S.W.2d 605,607-08 (Tex. 1985). However, we agree with your predecessor’s suggestion that the
provision’s language standing alone is somewhat ambiguous. On the one hand, the phrase “not later
than” may be construed to establish a time frame for the hearing. On the other hand, it could be
construed to establish a time frame for the hearings officer’s duty to set the hearing without limiting
the hearing date. Given that the sentence itself is susceptible to either construction, we look at the
sentence in the context of section 156.209 as a whole and subsection (c)‘s other requirements to
resolve the ambiguity. See Helena Chemical Co. v. Wilkins, 47 S.W.3d 486,493 (Tex. 2001) (“[W]e
must always consider the statute as a whole rather than its isolated provisions. We should not give
one provision a meaning out of harmony or inconsistent with other provisions, although it might be
susceptible to such a construction standing alone.“) (citations omitted); see also TEX. GOV’T CODE
ANN.~~311.Oll(a)(      words and phrases to be read in context), 3 11.02 l(2)-(3) (“In enacting a statute,
it is presumed that . . . the entire statute is intended to be effective” and “a just and reasonable result
is intended”), 3 11.023(l), (5) (“In construing a statute, . . . a court may consider . . . the . . . object
sought to be attained” and the “consequences of a particular construction[.]“) (Vernon 1998).

         Section 156.209’s overriding purpose is to establish the procedural steps an unsuccessful
applicant for a mortgage-broker      license or license renewal must follow in order to exhaust the
applicant’s administrative remedies before seeking judicial review and to establish a fixed time
frame for each step. See TEX. FIN. CODE ANN. 6 156.209(a) (re q uiring prompt notice of denial), (b)
(in order to appeal to the district court, the applicant must file an appeal with the commissioner not
later than the tenth day after receiving the notice), (c) (requiring hearings officer to set hearing date
and to provide applicant with at least ten days notice), (d) (denial of license or renewal final if
applicant fails to request a hearing) (Vernon Supp. 2004). When the Commissioner declines to issue
or fails to renew a license, the Commissioner must promptly provide notice to the applicant,
who must then file an administrative appeal within ten days after receiving the notice. See id.
8 156.209(a)-(b). Construing the first sentence of section 156.209(c) to require the hearings officer
to set the hearing for a date within the thirty-day period after the applicant appeals is consistent with
this framework of prompt action, precise duties, and definite dates. Indeed, it would be inconsistent
with the overall purpose of section 156.209 to construe this sentence to allow a hearings officer to
set the hearing for any date provided that the hearings officer acts to set the hearing not later than the
thirtieth day after the Commissioner receives the appeal. Moreover, given that an unsuccessful
applicant’s livelihood may be at stake and the applicant may not appeal to district court until
exhausting the administrative hearing process, it seems more likely that the legislature intended to
set a precise time frame for the hearing date rather than to set a precise time frame for the hearings
officer to schedule the hearing with no outside limit on the hearing date. See TEX. GOV’T CODE
ANN. 89 311.021(3) (“In enacting a statute, it is presumed that . . . a just and reasonable result is
intended.“), 3 11.023(l), (5) (“In construing a statute, . . . a court may consider . . . the . . . object
sought to be attained” and the “consequences of a particular construction[.]“) (Vernon 1998).

         In addition, construing the first sentence of section 156.209(c) to require that the hearing be
set for a date within a fixed period is supported by section 156.209(c) as a whole. Its second
sentence requires the hearings officer to provide the applicant with at least ten-days notice of the
hearing. See TEX. FIN. CODE ANN. 6 156.209(c) (Vernon Supp. 2004). That short notice period is
consistent with the requirement that the hearing be set for a date within thirty days after the applicant
Mr. Danny Payne - Page 4                       (GA-0167)




appeals. Had the legislature intended the hearing date to be open-ended, one would expect a longer
notice period. In addition, section 156.209(c)‘s third sentence provides the hearings officer with
flexibility to continue the hearing if the applicant consents. See id. (“The time of the hearing may
be continued periodically with the consent of the applicant or person requesting the renewal.“). The
fact that the legislature has given hearings officers the latitude to move hearing dates only with
applicants’ consent suggests that the legislature did not intend to give hearings officers open-ended
authority to set initial hearing dates.

        Accordingly, we conclude that section 156.209(c) requires a hearings officer to schedule an
administrative hearing for a date no later than thirty days after the date the Commissioner receives
the applicant’s appeal.
Mr. Danny Payne - Page 5                       (GA-0167)




                                        SUMMARY

                       Finance Code section 156.209 requires the Savings and Loan
               Commissioner to provide notice to an unsuccessful applicant for a
               mortgage broker license or license renewal and establishes procedural
               requirements for an administrative appeal that the applicant must
               exhaust to later appeal to a district court. Section 156.209(c) requires
               the administrative hearings officer to schedule an administrative
               hearing for a date no later than thirty days after the date the Savings
               and Loan Commissioner receives the applicant’s appeal.




                                               Attom&neral        of Texas


BARRY R. MCBEE
First Assistant Attorney General

DON R. WILLETT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Mary R. Crouter
Assistant Attorney General, Opinion Committee
