1-1  By:  Van de Putte (Senate Sponsor - Madla)            H.B. No. 1506
    1-2        (In the Senate - Received from the House April 21, 1995;
    1-3  April 24, 1995, read first time and referred to Committee on Health
    1-4  and Human Services; May 3, 1995, reported favorably by the
    1-5  following vote:  Yeas 8, Nays 0; May 3, 1995, sent to printer.)
    1-6                         A BILL TO BE ENTITLED
    1-7                                AN ACT
    1-8  relating to the authority of the Texas State Board of Pharmacy to
    1-9  impose  administrative penalties.
   1-10        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-11        SECTION 1.  Subsections (d)-(s), Section 28B, Texas Pharmacy
   1-12  Act (Article 4542a-1, Vernon's Texas Civil Statutes), are amended
   1-13  to read as follows:
   1-14        (d)  The board by rule shall prescribe procedures, consistent
   1-15  with the provisions of Chapter 2001, Government Code, relating to
   1-16  contested cases, by which the board may impose an administrative
   1-17  penalty <executive director, or staff designee, on determination
   1-18  that a violation has occurred may issue to the board a report that
   1-19  states the facts on which the determination is based and the
   1-20  director's recommendation on the imposition of a penalty, including
   1-21  a recommendation on the amount of the penalty>.
   1-22        (e)  If the board by order finds that a violation has
   1-23  occurred and imposes an administrative penalty, the board shall
   1-24  give notice to the person of the board's order.  The notice must
   1-25  include a statement of the right of the person to judicial review
   1-26  of the order.  <Within 14 days after the date the report is
   1-27  approved by the board and issued, the executive director shall give
   1-28  written notice of the report to the person.  The notice may be
   1-29  given by certified mail.  The notice must include a brief summary
   1-30  of the alleged violation and a statement of the amount of the
   1-31  recommended penalty and must inform the person that the person has
   1-32  a right to a hearing on the occurrence of the violation, the amount
   1-33  of the penalty, or both the occurrence of the violation and the
   1-34  amount of the penalty.>
   1-35        <(f)  Within 20 days after the date the person receives the
   1-36  notice, the person in writing may accept the determination and
   1-37  recommended penalty of the executive director or may make a written
   1-38  request for a hearing on the occurrence of the violation, the
   1-39  amount of the penalty, or both the occurrence of the violation and
   1-40  the amount of the penalty.>
   1-41        <(g)  If the person accepts the determination and recommended
   1-42  penalty of the executive director, the board by order shall approve
   1-43  the determination and impose the recommended penalty.>
   1-44        <(h)  If the person requests a hearing or fails to respond
   1-45  timely to the notice, the executive director shall set a hearing
   1-46  and give notice of the hearing to the person.  The hearing shall be
   1-47  held by the board, except that a hearing involving the diversion of
   1-48  controlled substances shall be held by an administrative law judge
   1-49  of the State Office of Administrative Hearings.  The board or the
   1-50  administrative law judge, as appropriate, shall make findings of
   1-51  fact and conclusions of law and, if the hearing is held by an
   1-52  administrative law judge, the judge promptly shall issue to the
   1-53  board a proposal for a decision about the occurrence of the
   1-54  violation and the amount of a proposed penalty.  Based on the
   1-55  findings of fact, conclusions of law, and any proposal for a
   1-56  decision, the board by order may find that a violation has occurred
   1-57  and impose a penalty or may find that no violation occurred.>
   1-58        <(i)  The notice of the board's order given to the person
   1-59  under the Administrative Procedure and Texas Register Act (Article
   1-60  6252-13a, Vernon's Texas Civil Statutes) and its subsequent
   1-61  amendments must include a statement of the right of the person to
   1-62  judicial review of the order.>
   1-63        (f) <(j)>  Within 30 days after the date the board's order is
   1-64  final as provided by Section 2001.144, Government Code <16(c),
   1-65  Administrative Procedure and Texas Register Act (Article 6252-13a,
   1-66  Vernon's Texas Civil Statutes), and its subsequent amendments>, the
   1-67  person shall:
   1-68              (1)  pay the amount of the penalty;
    2-1              (2)  pay the amount of the penalty and file a petition
    2-2  for judicial review contesting the occurrence of the violation, the
    2-3  amount of the penalty, or both the occurrence of the violation and
    2-4  the amount of the penalty; or
    2-5              (3)  without paying the amount of the penalty, file a
    2-6  petition for judicial review contesting the occurrence of the
    2-7  violation, the amount of the penalty, or both the occurrence of the
    2-8  violation and the amount of the penalty.
    2-9        (g) <(k)>  Within the 30-day period, a person who acts under
   2-10  Subsection (f)(3) <(j)(3)> of this section may:
   2-11              (1)  stay enforcement of the penalty by:
   2-12                    (A)  paying the amount of the penalty to the
   2-13  court for placement in an escrow account; or
   2-14                    (B)  giving to the court a supersedeas bond
   2-15  approved by the court for the amount of the penalty and that is
   2-16  effective until all judicial review of the board's order is final;
   2-17  or
   2-18              (2)  request the court to stay enforcement of the
   2-19  penalty by:
   2-20                    (A)  filing with the court a sworn affidavit of
   2-21  the person stating that the person is financially unable to pay the
   2-22  amount of the penalty and is financially unable to give the
   2-23  supersedeas bond; and
   2-24                    (B)  giving a copy of the affidavit to the
   2-25  executive director by certified mail.
   2-26        (h) <(l)>  An executive director who receives a copy of an
   2-27  affidavit under Subsection (g)(2) <(k)(2)> of this section may file
   2-28  with the court, within five days after the date the copy is
   2-29  received, a contest to the affidavit.  The court shall hold a
   2-30  hearing on the facts alleged in the affidavit as soon as
   2-31  practicable and shall stay the enforcement of the penalty on
   2-32  finding that the alleged facts are true.  The person who files an
   2-33  affidavit has the burden of proving that the person is financially
   2-34  unable to pay the amount of the penalty and to give a supersedeas
   2-35  bond.
   2-36        (i) <(m)>  If the person does not pay the amount of the
   2-37  penalty and the enforcement of the penalty is not stayed, the
   2-38  executive director may refer the matter to the attorney general for
   2-39  collection of the amount of the penalty.
   2-40        <(n)  Judicial review of the order of the board:>
   2-41              <(1)  is instituted by filing a petition as provided by
   2-42  Section 19, Administrative Procedure and Texas Register Act
   2-43  (Article 6252-13a, Vernon's Texas Civil Statutes), and its
   2-44  subsequent amendments; and>
   2-45              <(2)  is under the substantial evidence rule.>
   2-46        (j) <(o)>  If the court sustains the occurrence of the
   2-47  violation on appeal, the court may uphold or reduce the amount of
   2-48  the penalty and order the person to pay the full or reduced amount
   2-49  of the penalty.  If the court does not sustain the occurrence of
   2-50  the violation, the court shall order that no penalty is owed.
   2-51        (k) <(p)>  When the judgment of the court becomes final, the
   2-52  court shall proceed under this subsection.  If the person paid the
   2-53  amount of the penalty and if that amount is reduced or is not
   2-54  upheld by the court, the court shall order that the appropriate
   2-55  amount plus accrued interest be remitted to the person.  The rate
   2-56  of the interest is the rate charged on loans to depository
   2-57  institutions by the New York Federal Reserve Bank, and the interest
   2-58  shall be paid for the period beginning on the date the penalty was
   2-59  paid and ending on the date the penalty is remitted.  If the person
   2-60  gave a supersedeas bond and if the amount of the penalty is not
   2-61  upheld by the court, the court shall order the release of the bond.
   2-62  If the person gave a supersedeas bond and if the amount of the
   2-63  penalty is reduced, the court shall order the release of the bond
   2-64  after the person pays the amount.
   2-65        (l) <(q)>  A penalty collected under this section shall be
   2-66  remitted to the comptroller for deposit in the general revenue
   2-67  fund.
   2-68        (m) <(r)>  All proceedings under this section are subject to
   2-69  Chapter 2001, Government Code <the Administrative Procedure and
   2-70  Texas Register Act (Article 6252-13a, Vernon's Texas Civil
    3-1  Statutes) and its subsequent amendments>.
    3-2        (n) <(s)>  This section does not limit the ability of the
    3-3  board to impose an administrative penalty pursuant to a consent
    3-4  order entered in accordance with board rules and requirements of
    3-5  Section 17D of this Act.
    3-6        SECTION 2.  This Act takes effect September 1, 1995.
    3-7        SECTION 3.  The importance of this legislation and the
    3-8  crowded condition of the calendars in both houses create an
    3-9  emergency and an imperative public necessity that the
   3-10  constitutional rule requiring bills to be read on three several
   3-11  days in each house be suspended, and this rule is hereby suspended.
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