By: Leedom, Patterson S.B. No. 1596 Cain A BILL TO BE ENTITLED AN ACT 1-1 relating to arbitration of alleged violations of law relating to 1-2 convalescent and nursing homes and related institutions. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Chapter 242, Health and Safety Code, is amended 1-5 by adding Subchapter H to read as follows: 1-6 SUBCHAPTER H. ARBITRATION OF CERTAIN DISPUTES 1-7 Sec. 242.251. SCOPE OF SUBCHAPTER. This subchapter applies 1-8 to any dispute between an institution licensed under this chapter 1-9 and the department relating to: 1-10 (1) renewal of a license under Section 242.033; 1-11 (2) suspension or revocation of a license or closing 1-12 of a facility under Section 242.061 or 242.062; 1-13 (3) assessment of a civil penalty under Section 1-14 242.065; or 1-15 (4) assessment of an administrative penalty under 1-16 Section 242.066. 1-17 Sec. 242.252. ELECTION OF ARBITRATION. (a) An affected 1-18 institution may elect binding arbitration of any dispute to which 1-19 this subchapter applies. Arbitration under this subchapter is an 1-20 alternative to a contested case hearing or to a judicial proceeding 1-21 relating to the assessment of a civil penalty. 1-22 (b) An affected institution may elect arbitration under this 1-23 subchapter by filing the election with the department not later 1-24 than the 10th day after a notice of hearing relating to any dispute 2-1 described by Section 242.251 is received by the institution. 2-2 (c) An election to engage in arbitration under this 2-3 subchapter is irrevocable and binding on the institution and the 2-4 department. 2-5 Sec. 242.253. ARBITRATION PROCEDURES. (a) The arbitration 2-6 shall be conducted by the American Arbitration Association or 2-7 another nationally recognized association that performs arbitration 2-8 services. 2-9 (b) The arbitration shall be conducted in accordance with 2-10 the American Arbitration Association's commercial arbitration rules 2-11 in effect November 1, 1993. 2-12 (c) The cost of the arbitration shall be shared equally by 2-13 the department and the institution electing arbitration. An 2-14 arbitrator's fee may not exceed $500 per day. 2-15 Sec. 242.254. ARBITRATOR; QUALIFICATIONS. The arbitrator 2-16 must be on an approved list of the American Arbitration Association 2-17 or another nationally recognized association that performs 2-18 arbitration services. 2-19 Sec. 242.255. ARBITRATOR; SELECTION. The arbitration shall 2-20 be conducted by one arbitrator appointed from a panel of 2-21 arbitrators provided by the American Arbitration Association or 2-22 another nationally recognized association that performs arbitration 2-23 services. The appointment shall be made in accordance with the 2-24 American Arbitration Association's commercial arbitration rules in 2-25 effect November 1, 1993. 2-26 Sec. 242.256. DUTIES OF ARBITRATOR. The arbitrator shall: 2-27 (1) protect the interests of the department and the 3-1 institution; 3-2 (2) ensure that all relevant evidence has been 3-3 disclosed to the arbitrator, department, and institution; and 3-4 (3) render an order consistent with this chapter and 3-5 the rules adopted under this chapter. 3-6 Sec. 242.257. SCHEDULING OF ARBITRATION. (a) The 3-7 association conducting the arbitration shall schedule arbitration 3-8 to be held not later than the 90th day after the date the 3-9 arbitrator is selected and shall notify the department and the 3-10 institution of the scheduled date. 3-11 (b) The arbitrator may grant a continuance of the 3-12 arbitration at the request of the department or institution. The 3-13 arbitrator may not unreasonably deny a request for a continuance. 3-14 Sec. 242.258. EXCHANGE AND FILING OF INFORMATION. Not later 3-15 than the seventh day before the first day of arbitration, the 3-16 department and the institution shall exchange and file with the 3-17 arbitrator: 3-18 (1) all documentary evidence not previously exchanged 3-19 and filed that is relevant to the dispute; and 3-20 (2) information relating to a proposed resolution of 3-21 the dispute. 3-22 Sec. 242.259. ATTENDANCE REQUIRED. (a) The arbitrator may 3-23 proceed in the absence of any party or representative of a party 3-24 who, after notice of the proceeding, fails to be present or to 3-25 obtain a postponement. 3-26 (b) An arbitrator may not make an order solely on the 3-27 default of a party and shall require the party who is present to 4-1 submit evidence, as required by the arbitrator, before making an 4-2 award. 4-3 Sec. 242.260. TESTIMONY; RECORD. (a) The arbitrator may 4-4 require witnesses to testify under oath and shall require testimony 4-5 under oath if requested by the department or the institution. 4-6 (b) The department shall make an electronic recording of the 4-7 proceeding. 4-8 (c) An official stenographic record of the proceeding is not 4-9 required, but the department or the institution may make a 4-10 stenographic record. The party that makes the stenographic record 4-11 shall pay the expense of having the record made. 4-12 Sec. 242.261. EVIDENCE. (a) The department or the 4-13 institution may offer evidence as they desire and shall produce 4-14 additional evidence as the arbitrator considers necessary to 4-15 understand and resolve the dispute. 4-16 (b) The arbitrator is the judge of the relevance and 4-17 materiality of the evidence offered. Strict conformity to rules 4-18 applicable to judicial proceedings is not required. 4-19 Sec. 242.262. CLOSING STATEMENTS; BRIEFS. The department 4-20 and the institution may present closing statements as they desire, 4-21 but the record may not remain open for written briefs unless 4-22 requested by the arbitrator. 4-23 Sec. 242.263. EX PARTE CONTACTS PROHIBITED. (a) Except as 4-24 provided by Subsection (b), the department and the institution may 4-25 not communicate with the arbitrator other than at an oral hearing 4-26 unless the parties and the arbitrator agree otherwise. 4-27 (b) Any oral or written communication, other than a 5-1 communication authorized under Subsection (a), from the parties to 5-2 the arbitrator shall be directed to the association that is 5-3 conducting the arbitration for transmittal to the arbitrator. 5-4 Sec. 242.264. ORDER. (a) The arbitrator may enter any 5-5 order that may be entered by the department, board, commissioner, 5-6 or court under this chapter in relation to a dispute described by 5-7 Section 242.251. 5-8 (b) The arbitrator shall enter the order not later than the 5-9 60th day after the last day of the arbitration. 5-10 (c) The arbitrator shall base the order on the facts 5-11 established at arbitration, including stipulations of the parties, 5-12 and on the law as properly applied to those facts. 5-13 (d) The order must: 5-14 (1) be in writing; 5-15 (2) be signed and dated by the arbitrator; and 5-16 (3) include a statement of the arbitrator's decision 5-17 on the contested issues and the department's and institution's 5-18 stipulations on uncontested issues. 5-19 (e) The arbitrator shall file a copy of the order with the 5-20 department and shall notify the department and the institution in 5-21 writing of the decision. 5-22 Sec. 242.265. EFFECT OF ORDER. An order of an arbitrator 5-23 under this subchapter is final and binding on all parties. Except 5-24 as provided by Section 242.267, there is no right to appeal. 5-25 Sec. 242.266. CLERICAL ERROR. For the purpose of correcting 5-26 a clerical error, an arbitrator retains jurisdiction of the award 5-27 for 20 days after the date of the award. 6-1 Sec. 242.267. COURT VACATING ORDER. (a) On application of 6-2 the department or an institution, a court shall vacate an 6-3 arbitrator's order on a finding that: 6-4 (1) the order was procured by corruption, fraud, or 6-5 misrepresentation; 6-6 (2) the decision of the arbitrator was arbitrary or 6-7 capricious and against the weight of the evidence; or 6-8 (3) the order exceeded the jurisdiction of the 6-9 arbitrator under Section 242.264(a). 6-10 (b) If the order is vacated, the dispute shall be remanded 6-11 to the department for another arbitration proceeding. 6-12 (c) A suit to vacate an arbitrator's order must be filed not 6-13 later than the 30th day after: 6-14 (1) the date of the award; or 6-15 (2) the date the appealing party knew or should have 6-16 known of a basis for suit under this section, but in no event later 6-17 than 12 months after the date of the order. 6-18 (d) Venue for a suit to vacate an arbitrator's order is in 6-19 the county in which the arbitration was conducted. 6-20 Sec. 242.268. EMERGENCY ORDER OR CLOSING ORDER NOT STAYED. 6-21 An order issued under Section 242.062 is not stayed pending an 6-22 arbitration under this subchapter. 6-23 SECTION 2. This Act takes effect September 1, 1995, and 6-24 expires August 31, 1997. It applies only to disputes described by 6-25 Section 242.251, Health and Safety Code, as added by this Act, with 6-26 respect to which formal proceedings are commenced on or after 6-27 January 1, 1996, and before August 31, 1997. An arbitration 7-1 proceeding commenced prior to the expiration of this Act is covered 7-2 by the law as it existed on the date on which the proceeding was 7-3 commenced, and the former law is continued in effect for this 7-4 purpose. 7-5 SECTION 3. The importance of this legislation and the 7-6 crowded condition of the calendars in both houses create an 7-7 emergency and an imperative public necessity that the 7-8 constitutional rule requiring bills to be read on three several 7-9 days in each house be suspended, and this rule is hereby suspended.