§40-2A-9. Repealed by Act 2014-146, §2, effective October 1, 2014. Procedures governing appeals to the Administrative Law Division; authority of administrative law judge.

Repealed by Act 2014-146, §2, effective October 1, 2014.

(a) Purpose. The purpose of this section is to establish uniform procedures concerning appeals to the Administrative Law Division and to establish the authority and responsibilities of the administrative law judge concerning those appeals. This section should be liberally construed to provide for the fair, efficient, and complete resolution of all matters in dispute.

(b) Authority of administrative law judge. The administrative law judge shall be responsible for administration of the Administrative Law Division and may schedule and conduct hearings and decide all appeals properly filed with the Administrative Law Division. The administrative law judge may dismiss any appeal for failure or refusal to comply with any department regulation or statute concerning appeals to the Administrative Law Division, or for the failure or refusal to comply with any preliminary order issued by the administrative law judge. If an appeal is dismissed by the administrative law judge for any reason, then for good cause, the administrative law judge may reinstate the appeal. However, no appeal may be reinstated unless a motion to reinstate such appeal is filed with the Administrative Law Division within 30 days of the date of entry of the order dismissing the appeal, or the appeal is reinstated by the administrative law judge within such period. An order dismissing an appeal may be appealed to circuit court in the same manner and subject to the same requirements as appeals from final orders of the administrative law judge. The order shall be upheld by the circuit court unless the court finds an abuse of discretion by the administrative law judge or that the order is otherwise unreasonable.

(c) Pre-hearing procedures. The notice of appeal filed with the Administrative Law Division shall, by specific reference, identify the assessment, refund, or other act or refusal to act which is the subject of the appeal, the position of the appealing party or taxpayer, the basis on which relief should be granted, and the relief sought on the appeal. The Administrative Law Division shall notify the Legal Division of the department that an appeal has been filed, and the Legal Division shall be required to file a written answer with the Administrative Law Division within 30 days from receipt of notice. The answer shall state the facts and issues in dispute and the department's position relating thereto. The administrative law judge may require additional information from either the taxpayer or the department or allow the Legal Division additional time, not to exceed 60 days, within which to file an answer.

(d) Hearings. An appeal may be held in abeyance by agreement of the parties or at the discretion of the administrative law judge, or an appeal may be submitted for decision on a joint stipulation of facts without a hearing, or as otherwise agreed by the parties. Otherwise, a hearing shall be conducted by the administrative law judge. Notice of the hearing shall be mailed to the taxpayer or the taxpayer's representative by certified mail, return receipt requested, directed to the taxpayer's last known address. The administrative law judge shall conduct the hearing substantially as follows:

1. Open the record and receive appearances.

2. Receive testimony and exhibits presented by the parties. All testimony shall be made under oath and any person testifying under oath shall be subject to the perjury provisions of Section 13A-10-102.

3. Further interrogate witnesses if deemed necessary.

4. Require oral arguments and the submission of briefs and other authorities if deemed necessary.

5. Continue or reopen the hearing for the taking of additional evidence as deemed necessary for a fair, efficient, and complete resolution of the matter or matters in dispute.

(e) Final order. A final order shall be entered by the administrative law judge which shall contain findings of fact and conclusions of law. The final order shall provide such relief as may be appropriate under the circumstances. Any final order, unless altered or amended on appeal, shall have the same force and effect as a final order issued by a circuit judge sitting in Alabama.

(f) Application for rehearing. Either the taxpayer or the department may file an application for rehearing within 15 days from the date of entry of a final order by the administrative law judge. The application for rehearing shall set forth the specific reasons and supporting arguments why the final order is incorrect and should be reheard. The timely filing of an application for rehearing shall suspend the time period for filing an appeal to circuit court and the time for filing a notice of appeal shall be computed from the date of entry of the order of the administrative law judge either granting or denying the application for rehearing.

(g) Appeals to circuit court.

(1)a. Either the taxpayer or the department may appeal to circuit court from a final order issued by the administrative law judge by filing a notice of appeal with the Administrative Law Division and with the circuit court within 30 days from the date of entry of the final order. Any appeal by the department shall be filed with the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama. If the taxpayer neither resides in Alabama nor has a principal place of business in Alabama, the appeal may be made to the Circuit Court of Montgomery County, Alabama. Any appeal by the taxpayer may be taken to the Circuit Court of Montgomery County, Alabama, or to the circuit court of the county in which the taxpayer resides or has a principal place of business in Alabama.

b. If the appeal to circuit court is by a taxpayer from a final order involving a final assessment, the taxpayer, at the time of filing the appeal, shall do one of the following:

1. Pay the amount stated in the final order of the administrative law judge, plus applicable interest.

2. Execute a supersedeas bond, which shall be executed by a surety company licensed to do business in Alabama, for 125 percent of the amount stated as due in the final order of the administrative law judge, including tax, interest, and any applicable penalty, payable to the state and conditioned to pay the amount stated in the final order plus applicable interest due the state and any court cost relating to the appeal.

3. File an irrevocable letter of credit with the circuit court in an amount equal to 125 percent of the amount stated as due in the final order of the administrative law judge. The irrevocable letter of credit shall be issued by a financial institution designated as a qualified public depository by the Board of Directors of the Security for Alabama Funding Enhancement (SAFE) Program pursuant to Chapter 14A, Title 41. The State of Alabama shall be named the beneficiary of the irrevocable letter of credit. The irrevocable letter of credit shall be conditioned to pay the assessment plus applicable interest and any court costs relating to the appeal. The taxpayer may not issue an irrevocable letter of credit as to an appeal by the same taxpayer.

4. File a pledge or collateral assignment of securities that constitute eligible collateral under Chapter 14A, Title 41, in an amount equal to 200 percent of the amount stated as due in the final order of the administrative law judge. The pledge or collateral assignment shall be conditioned to pay the assessment plus applicable interest and any court costs relating to the appeal.

5. Show to the satisfaction of the clerk of the circuit court to which the appeal is taken that the taxpayer has a net worth (based on fair market value) of one hundred thousand dollars ($100,000) or less, including his or her homestead.

c.1. Except as provided in subparagraph 2., the circuit court shall dismiss any appeal that is not timely filed with the Administrative Law Division and the circuit court as herein provided, or, concerning appeals from final assessments, if the amount of the assessment upheld by the final order of the administrative law judge is not timely paid in full, or a supersedeas bond, irrevocable letter of credit, or pledge or collateral assignment of securities is not timely filed as herein required.

2. Notwithstanding subparagraph 1., should the circuit court determine that the taxpayer has not satisfied the requirements of this subdivision, the circuit court shall order that the taxpayer satisfy such requirements. The taxpayer may satisfy such requirements at any time within 30 days after service of the court order. No order of dismissal for lack of jurisdiction shall be entered within 30 days after service of the court order, and no order of dismissal shall thereafter be entered if such requirement is satisfied within such 30-day period.

(2) The appeal to circuit court from an order issued by the administrative law judge shall be a trial de novo, provided the order of the administrative law judge shall be presumed prima facie correct and the burden shall be upon the appealing party to show otherwise. The court shall hear the case in accordance with its own rules and shall decide all questions of fact and law. The administrative record and transcript shall be transmitted to the reviewing court as provided herein, and shall be admitted into evidence in the trial de novo, subject to the rights of either party to assign errors, objections, or motions to exclude calling attention to any testimony or any evidence in the administrative record or transcript which is deemed objectionable or inadmissible. Notwithstanding the foregoing, with the consent of all parties, judicial review may be on the administrative record and transcript. The court, upon request, shall hear oral argument and receive written briefs.

(h) Pre-hearing conferences, preliminary orders, subpoenas. The administrative law judge shall have authority to hold pre-hearing conferences and issue preliminary orders.

(i) Record of hearing, record on appeal. All hearings shall be recorded by a qualified court reporter, and the proceedings shall be transcribed at the request of either the department, the taxpayer or the Administrative Law Division, with the expense of transcription charged to the requesting party. The record of the proceedings or transcript thereof shall be maintained by the Administrative Law Division for at least five years. Upon appeal to circuit court by either party, the Administrative Law Division shall cause the hearing to be transcribed and shall forward the original transcript or a certified copy of the transcript along with the administrative record to circuit court for use in the appeal.

(j) Rules of evidence at administrative hearing. The rules of evidence applicable in civil non-jury cases in the circuit courts of Alabama shall be followed. When necessary to ascertain facts not reasonably susceptible to proof under those rules of evidence, evidence not admissible thereunder may be admitted, in the discretion of the administrative law judge, if relevant or of the type commonly relied upon by prudent persons. The administrative law judge may announce prior to or during a hearing that it shall not be necessary for either party to make objections during the hearing to any testimony or evidence offered by either party, and such objections shall be preserved and may be made on appeal. The final order issued by the administrative law judge shall be based only on such evidence as is relevant, competent, and material. Documentary evidence may be received in copy form if an opportunity to review the original is available and there is no objection thereto. Official notice may be taken of any technical facts within the specialized knowledge of the administrative law judge, and the experience, technical competency, and specialized knowledge of the administrative law judge shall be utilized in evaluating the evidence and issuing decisions based thereon, and shall be given appropriate weight in considering the order of the administrative law judge on appeal.

(k) Authorized representatives; appearance of hearing. A taxpayer may be represented before the Administrative Law Division by an authorized representative. If a taxpayer or his or her authorized representative fails to appear at a hearing after proper service of notice, the administrative law judge may, in his or her discretion, dismiss the appeal with prejudice, adjourn the proceeding and reset the matter for a subsequent hearing, or proceed with the hearing.

(l) Intervention. Any person may, upon application, be permitted to intervene in any case before the Administrative Law Division if the person's individual rights are or may be affected by the outcome of the proceeding and the person's interest is otherwise not adequately represented in the case.

(m) Public records. All testimony, exhibits, documents, and other materials introduced into evidence at a hearing before the Administrative Law Division, and all final and other orders issued by the administrative law judge shall be deemed public information except (i) in those cases where information received from the Internal Revenue Service is restricted by law or agreement from disclosure, and (ii) as otherwise ordered by the administrative law judge.

(n) The Department of Revenue shall revise existing regulations or administrative guidance, or issue new regulations or administrative guidance, as appropriate, in conformance with this section.

(o) This section shall apply to all appeals filed after June 15, 2007. Notwithstanding the prior sentence, in any appeal to a circuit court which is pending on June 15, 2007, and in which a supersedeas bond was filed pursuant to, and in compliance with, the requirements of this section, for double the amount of the tax, interest, and any penalty shown on the final assessment, or for double the amount of the final order of the administrative law judge, such bond may be reduced to 125 percent of such amount shown on the final assessment or in the final order of the administrative law judge.

(Acts 1992, No. 92-186, p. 349, §8; Acts 1995, No. 95-607, p. 1279, §2; Act 2007-504, p. 1086, §§1-3.)