Amends TCA Section 4-5-325 and Section 63-1-144.

When a state agency issues a citation to a party for the violation of a rule, regulation, or statute and the citation results in a contested case hearing subject to the Uniform Administrative Procedures Act, at the conclusion of such hearing, present law authorizes the hearing officer to order the agency to pay to the party issued a citation the amount of reasonable expenses incurred because of such citation, including a reasonable attorney's fee, if the hearing officer finds that the citation was issued: (1) Even though, to the best of such agency's knowledge, information and belief formed after reasonable inquiry, the violation was not well grounded in fact and was not warranted by existing law, rule or regulation; or (2) For an improper purpose such as to harass, to cause unnecessary delay or cause needless expense to the party cited. This bill clarifies that present law applies when a state agency issued a notice of hearing, rather than a citation. This bill changes the circumstances under which costs may be ordered against a state agency to cases where: (1) The party issued the notice substantially prevails on the merits of all of the allegations in the notice; and (2) The hearing officer finds that the state agency issued the notice to harass, cause unnecessary delay, or cause needless expense to the party issued the notice. Any such finding must be set forth in a written order the facts upon which that determination is based. When the division of health related boards or a professional licensing or certifying agency that is under the authority of the department of health imposes sanctions on a license or certificate holder in any disciplinary contested case proceeding, the license or certificate holder may, at the discretion of the division or agency that held the contested case proceeding, be required to pay the actual and reasonable costs of the investigation and prosecution of the case. This bill adds that when a party seeks judicial review of a division or agency decision, or appeals any such judicial review, the court, or the division or agency if the matter is remanded to the agency, upon finding that a sanction of the certificate or license holder is appropriate, may require the license or certificate holder to pay the actual and reasonable costs incurred by the division or agency for the judicial review or appeal. ON APRIL 22, 2021, THE SENATE SUBSTITUTED HOUSE BILL 79 FOR SENATE BILL 747, ADOPTED AMENDMENT #1, AND PASSED HOUSE BILL 79, AS AMENDED. AMENDMENT #1 revises the findings that must be made in order to support a hearing officer's or ALJ's award of costs to a respondent following an administrative hearing to be: (1) The claims contained in the notice are not warranted by existing law nor by a nonfrivolous argument for the extension or modification of existing law and do not have evidentiary support; or (2) The state agency issued the notice to harass, cause unnecessary delay, or cause needless expense to the party issued the notice. This amendment adds that, in order for a chancery court to order payment of costs by a licensee or certificate holder for a profession of the healing arts under this bill, the court must determine that: (1) The claims asserted in the petition for judicial review are not warranted by existing law nor by a nonfrivolous argument for the extension or modification of existing law and do not have evidentiary support; or (2) The license or certificate holder petitioned for judicial review to harass, cause unnecessary delay, or cause needless expense to the state or state agency.