(a) Definitions. Definitions for the words and terms used this section are located in §254.1 of this title (relating to the Operation of the Texas Department on Aging).(b) Purpose. The purpose of this section is to establish procedures for any area agency on aging contractor who is aggrieved in connection with penalties imposed by the Department, as described in §254.13 of this title (relating to Compliance with Contractor Responsibilities, Rewards and Penalties). All notifications sent from the Department to a contractor during the proposed imposition of a penalty shall contain information informing the contractor of the right to appeal, as well as the level of appeal appropriate for the matter, as described in this section.(c) Appeal to the Executive Director. The imposition of a level one penalty may be appealed by presenting a formal protest to the executive director of the Texas Department on Aging.(1) The protest shall follow the format described in subsection (f) of this section.(2) The contractor shall submit three copies of the protest to the Executive Director.(3) The Executive Director shall investigate the protest and issue a written determination within 30 calendar days upon receipt of the protest. The decision of the Executive Director is final.(d) Dispute Resolution Committee. The imposition of a level two or level three penalty may be appealed by the contractor by presenting a formal protest, as described in subsections (f)-(h) of this section, to the Dispute Resolution Committee of the Texas Department on Aging. When two Department division managers not connected with the matter cannot be identified, the Department may choose to refer the protest to a Dispute Resolution Center in Austin, Texas.(e) Exception. In the event of the level two and level three penalties relating to the temporary withholding of funds, as described in §254.13(g)(2)(B) and §254.13(g)(3)(C) of this title (relating to Compliance with Contractor Responsibilities, Rewards and Penalties) and/or relating to the disallowance of costs as described in §260.2(a)(3) of this title (relating to Area Agency on Aging Fiscal Responsibilities), and prior to presenting a formal protest to the Dispute Resolution Committee, a contractor may choose to request a public hearing from the Department, in accordance with the Older Americans Act, §306(e)(1)-(3).(f) Formal Protest. A formal protest must contain:(1) a specified identification of the statutory or regulatory provision or the contract provision that the contractor is alleged to have violated;(2) a specific description of the violation or violations;(3) a precise statement of the relevant facts;(4) an identification of the issue or issues to be resolved; and(5) arguments and authorities in support of the protest.(g) Copies. In making a formal protest to the Dispute Resolution Committee, the contractor shall send five copies of the protest to the Department. Copies of the protest shall also be sent by the protesting contractor to other interested parties, i.e., subcontractors or vendors for the contract(s) involved.(h) Settlement/Resolution. The Dispute Resolution Committee shall have the authority to settle and resolve the dispute. The committee may solicit written responses to the protest from other interested parties. If the protest/dispute is not resolved by mutual agreement during the meeting between the contractor and the Dispute Resolution Committee, the committee will issue a determination which shall be final. The committee will issue a written determination on the protest within 30 calendar days following the dispute resolution meeting.(i) Request for a Hearing before an Administrative Law Judge. The imposition of a level four penalty may be appealed by a request from the contractor for a hearing before an administrative law judge. The request shall be in writing and must state with specificity the grounds upon which the proposed penalty is appealed and all grounds upon which the contractor refutes the basis of the proposed penalty. The request must include:(1) the dates of all relevant actions;(2) the names of individuals or organizations involved in the proposed penalty;(3) specific statements and documentation which disprove the findings made by the Department, and/or that the sections of the Older Americans Act, state law or any rules or regulations cited in the letter of notification have not been violated; and(4) A certified copy of the minutes or resolution which indicates adoption by a majority of the quorum of the contractor's governing body a request for a hearing before an administrative law judge.(j) Conduct of a Hearing before an Administrative Law Judge. The person or persons so designated in the contract between the Department and the contractor shall act on behalf of the contractor. The proceedings and conduct of the hearing shall follow the rules promulgated in