1-1 By: Leedom, Patterson, Cain S.B. No. 1596
1-2 (In the Senate - Filed March 15, 1995; March 22, 1995, read
1-3 first time and referred to Committee on Health and Human Services;
1-4 April 28, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; April 28, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1596 By: Madla
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to arbitration of alleged violations of law relating to
1-11 convalescent and nursing homes and related institutions.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Chapter 242, Health and Safety Code, is amended
1-14 by adding Subchapter H to read as follows:
1-15 SUBCHAPTER H. ARBITRATION OF CERTAIN DISPUTES
1-16 Sec. 242.251. SCOPE OF SUBCHAPTER. This subchapter applies
1-17 to any dispute between an institution licensed under this chapter
1-18 and the department relating to:
1-19 (1) renewal of a license under Section 242.033;
1-20 (2) suspension or revocation of a license or closing
1-21 of a facility under Section 242.061 or 242.062;
1-22 (3) assessment of a civil penalty under Section
1-23 242.065; or
1-24 (4) assessment of an administrative penalty under
1-25 Section 242.066.
1-26 Sec. 242.252. ELECTION OF ARBITRATION. (a) An affected
1-27 institution may elect binding arbitration of any dispute to which
1-28 this subchapter applies. Arbitration under this subchapter is an
1-29 alternative to a contested case hearing or to a judicial proceeding
1-30 relating to the assessment of a civil penalty.
1-31 (b) An affected institution may elect arbitration under this
1-32 subchapter by filing the election with the department not later
1-33 than the 10th day after a notice of hearing relating to any dispute
1-34 described by Section 242.251 is received by the institution.
1-35 (c) An election to engage in arbitration under this
1-36 subchapter is irrevocable and binding on the institution and the
1-37 department.
1-38 Sec. 242.253. ARBITRATION PROCEDURES. (a) The arbitration
1-39 shall be conducted by the American Arbitration Association or
1-40 another nationally recognized association that performs arbitration
1-41 services.
1-42 (b) The arbitration shall be conducted in accordance with
1-43 the American Arbitration Association's commercial arbitration rules
1-44 in effect November 1, 1993.
1-45 (c) The cost of the arbitration shall be shared equally by
1-46 the department and the institution electing arbitration.
1-47 Sec. 242.254. ARBITRATOR; QUALIFICATIONS. The arbitrator
1-48 must be on an approved list of the American Arbitration
1-49 Association or another nationally recognized association that
1-50 performs arbitration services.
1-51 Sec. 242.255. ARBITRATOR; SELECTION. The arbitration shall
1-52 be conducted by one arbitrator appointed from a panel of
1-53 arbitrators provided by the American Arbitration Association or
1-54 another nationally recognized association that performs arbitration
1-55 services. The appointment shall be made in accordance with the
1-56 American Arbitration Association's commercial arbitration rules in
1-57 effect November 1, 1993.
1-58 Sec. 242.256. DUTIES OF ARBITRATOR. The arbitrator shall:
1-59 (1) protect the interests of the department and the
1-60 institution;
1-61 (2) ensure that all relevant evidence has been
1-62 disclosed to the arbitrator, department, and institution; and
1-63 (3) render an order consistent with this chapter and
1-64 the rules adopted under this chapter.
1-65 Sec. 242.257. SCHEDULING OF ARBITRATION. (a) The
1-66 association conducting the arbitration shall schedule arbitration
1-67 to be held not later than the 90th day after the date the
1-68 arbitrator is selected and shall notify the department and the
2-1 institution of the scheduled date.
2-2 (b) The arbitrator may grant a continuance of the
2-3 arbitration at the request of the department or institution. The
2-4 arbitrator may not unreasonably deny a request for a continuance.
2-5 Sec. 242.258. EXCHANGE AND FILING OF INFORMATION. Not later
2-6 than the seventh day before the first day of arbitration, the
2-7 department and the institution shall exchange and file with the
2-8 arbitrator:
2-9 (1) all documentary evidence not previously exchanged
2-10 and filed that is relevant to the dispute; and
2-11 (2) information relating to a proposed resolution of
2-12 the dispute.
2-13 Sec. 242.259. ATTENDANCE REQUIRED. (a) The arbitrator may
2-14 proceed in the absence of any party or representative of a party
2-15 who, after notice of the proceeding, fails to be present or to
2-16 obtain a postponement.
2-17 (b) An arbitrator may not make an order solely on the
2-18 default of a party and shall require the party who is present to
2-19 submit evidence, as required by the arbitrator, before making an
2-20 award.
2-21 Sec. 242.260. TESTIMONY; RECORD. (a) The arbitrator may
2-22 require witnesses to testify under oath and shall require testimony
2-23 under oath if requested by the department or the institution.
2-24 (b) The department shall make an electronic recording of the
2-25 proceeding.
2-26 (c) An official stenographic record of the proceeding is not
2-27 required, but the department or the institution may make a
2-28 stenographic record. The party that makes the stenographic record
2-29 shall pay the expense of having the record made.
2-30 Sec. 242.261. EVIDENCE. (a) The department or the
2-31 institution may offer evidence as they desire and shall produce
2-32 additional evidence as the arbitrator considers necessary to
2-33 understand and resolve the dispute.
2-34 (b) The arbitrator is the judge of the relevance and
2-35 materiality of the evidence offered. Strict conformity to rules
2-36 applicable to judicial proceedings is not required.
2-37 Sec. 242.262. CLOSING STATEMENTS; BRIEFS. The department
2-38 and the institution may present closing statements as they desire,
2-39 but the record may not remain open for written briefs unless
2-40 requested by the arbitrator.
2-41 Sec. 242.263. EX PARTE CONTACTS PROHIBITED. (a) Except as
2-42 provided by Subsection (b), the department and the institution may
2-43 not communicate with the arbitrator other than at an oral hearing
2-44 unless the parties and the arbitrator agree otherwise.
2-45 (b) Any oral or written communication, other than a
2-46 communication authorized under Subsection (a), from the parties to
2-47 the arbitrator shall be directed to the association that is
2-48 conducting the arbitration for transmittal to the arbitrator.
2-49 Sec. 242.264. ORDER. (a) The arbitrator may enter any
2-50 order that may be entered by the department, board, commissioner,
2-51 or court under this chapter in relation to a dispute described by
2-52 Section 242.251.
2-53 (b) The arbitrator shall enter the order not later than the
2-54 60th day after the last day of the arbitration.
2-55 (c) The arbitrator shall base the order on the facts
2-56 established at arbitration, including stipulations of the parties,
2-57 and on the law as properly applied to those facts.
2-58 (d) The order must:
2-59 (1) be in writing;
2-60 (2) be signed and dated by the arbitrator; and
2-61 (3) include a statement of the arbitrator's decision
2-62 on the contested issues and the department's and institution's
2-63 stipulations on uncontested issues.
2-64 (e) The arbitrator shall file a copy of the order with the
2-65 department and shall notify the department and the institution in
2-66 writing of the decision.
2-67 Sec. 242.265. EFFECT OF ORDER. An order of an arbitrator
2-68 under this subchapter is final and binding on all parties. Except
2-69 as provided by Section 242.267, there is no right to appeal.
2-70 Sec. 242.266. CLERICAL ERROR. For the purpose of correcting
3-1 a clerical error, an arbitrator retains jurisdiction of the award
3-2 for 20 days after the date of the award.
3-3 Sec. 242.267. COURT VACATING ORDER. (a) On application of
3-4 the department or an institution, a court shall vacate an
3-5 arbitrator's order on a finding that:
3-6 (1) the order was procured by corruption, fraud, or
3-7 misrepresentation;
3-8 (2) the decision of the arbitrator was arbitrary or
3-9 capricious and against the weight of the evidence; or
3-10 (3) the order exceeded the jurisdiction of the
3-11 arbitrator under Section 242.264(a).
3-12 (b) If the order is vacated, the dispute shall be remanded
3-13 to the department for another arbitration proceeding.
3-14 (c) A suit to vacate an arbitrator's order must be filed not
3-15 later than the 30th day after:
3-16 (1) the date of the award; or
3-17 (2) the date the appealing party knew or should have
3-18 known of a basis for suit under this section, but in no event later
3-19 than 12 months after the date of the order.
3-20 (d) Venue for a suit to vacate an arbitrator's order is in
3-21 the county in which the arbitration was conducted.
3-22 Sec. 242.268. EMERGENCY ORDER OR CLOSING ORDER NOT STAYED.
3-23 An order issued under Section 242.062 is not stayed pending an
3-24 arbitration under this subchapter.
3-25 SECTION 2. This Act takes effect September 1, 1995, and
3-26 applies only to a dispute described by Section 242.251, Health and
3-27 Safety Code, as added by this Act, with respect to which formal
3-28 proceedings are commenced on or after January 1, 1996.
3-29 SECTION 3. The importance of this legislation and the
3-30 crowded condition of the calendars in both houses create an
3-31 emergency and an imperative public necessity that the
3-32 constitutional rule requiring bills to be read on three several
3-33 days in each house be suspended, and this rule is hereby suspended.
3-34 * * * * *