83R16952 CAE-F
	By: Menendez	H.B. No. 33
	Substitute the following for H.B. No. 33:
	By:  Raymond	C.S.H.B. No. 33

	A BILL TO BE ENTITLED
	AN ACT
	relating to alternative methods of dispute resolution in certain
	disputes between the Department of Aging and Disability Services
	and an assisted living facility licensed by the department.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 247.051, Health and Safety Code, is
	amended to read as follows:
	Sec. 247.051.  INFORMAL DISPUTE RESOLUTION. (a) The Health
	and Human Services Commission by rule shall establish an informal
	dispute resolution process to address disputes between a facility
	and the department concerning a statement of violations prepared by
	the department in accordance with this section. The process must
	provide for adjudication by an appropriate disinterested person of
	disputes relating to a statement of violations [a proposed
	enforcement action or related proceeding under this chapter]. The
	informal dispute resolution process must require:
	(1)  the assisted living facility to request informal
	dispute resolution not later than the 10th day after the date of
	notification by the department of the violation of a standard or
	standards;
	(2)  the Health and Human Services Commission to
	complete the process not later than the 90th [30th] day after the
	date of receipt of a request from the assisted living facility for
	informal dispute resolution; [and]
	(3)  that, not later than the 10th business day after
	the date an assisted living facility requests an informal dispute
	resolution, the department forward to the assisted living facility
	a copy of all information that is referred to in the disputed
	statement of violations or on which a citation is based in
	connection with the survey, inspection, investigation, or other
	visit, excluding:
	(A)  the name of any complainant, witness, or
	informant;
	(B)  any information that would reasonably lead to
	the identification of a complainant, witness, or informant;
	(C)  information obtained from or contained in the
	records of the facility;
	(D)  information that is publicly available; or
	(E)  information that is confidential by law;
	(4)  the Health and Human Services Commission to give
	full consideration to all factual arguments raised during the
	informal dispute resolution process that:
	(A)  are supported by references to specific
	information that the facility or department relies on to dispute or
	support findings in the statement of violations; and
	(B)  are provided by the proponent of the argument
	to the Health and Human Services Commission and the opposing party;
	(5)  that informal dispute resolution staff give full
	consideration to the information provided by the assisted living
	facility and the department;
	(6)  that ex parte communications concerning the
	substance of any argument relating to a survey, inspection,
	investigation, visit, or statement of violations under
	consideration not occur between the informal dispute resolution
	staff and the assisted living facility or the department; and
	(7)  that the assisted living facility and the
	department be given a reasonable opportunity to submit arguments
	and information supporting the position of the assisted living
	facility or the department and to respond to arguments and
	information presented against them.
	(b)  [any individual representing an assisted living
	facility in an informal dispute resolution process to register with
	the Health and Human Services Commission and disclose the
	following:
	[(A)     the individual's employment history during
	the preceding five years, including employment in regulatory
	agencies of this state and other states;
	[(B)     ownership, including the identity of the
	controlling person or persons, of the assisted living facility the
	individual is representing before the Health and Human Services
	Commission; and
	[(C)     the identity of other entities the
	individual represents or has represented before the Health and
	Human Services Commission during the preceding 24 months.
	[(b)     The Health and Human Services Commission shall adopt
	rules to adjudicate claims in contested cases.
	[(c)]  The Health and Human Services Commission may not
	delegate its responsibility to administer the informal dispute
	resolution process established by this section to another state
	agency.
	(c)  An assisted living facility requesting an informal
	dispute resolution under this section must reimburse the department
	for any costs associated with the department's preparation,
	copying, and delivery of information requested by the facility.
	(d)  A statement of violations prepared by the department
	following a survey, inspection, investigation, or visit is
	confidential pending the outcome of the informal dispute resolution
	process. Information concerning the outcome of a survey,
	inspection, investigation, or visit may be posted on any website
	maintained by the department while the dispute is pending if the
	posting clearly notes each finding that is in dispute.
	SECTION 2.  Chapter 247, Health and Safety Code, is amended
	by adding Subchapter E to read as follows:
	SUBCHAPTER E. ARBITRATION
	Sec. 247.081.  SCOPE OF SUBCHAPTER. This subchapter applies
	to any dispute between a facility licensed under this chapter and
	the department relating to:
	(1)  renewal of a license under Section 247.023;
	(2)  suspension, revocation, or denial of a license
	under Section 247.041;
	(3)  assessment of a civil penalty under Section
	247.045; or
	(4)  assessment of an administrative penalty under
	Section 247.0451.
	Sec. 247.082.  ELECTION OF ARBITRATION. (a) Except as
	provided by Subsection (d), an affected facility may elect binding
	arbitration of any dispute to which this subchapter applies.
	Arbitration under this subchapter is an alternative to a contested
	case hearing or to a judicial proceeding relating to the assessment
	of a civil penalty.
	(b)  An affected facility may elect arbitration under this
	subchapter by filing the election with the court in which the
	lawsuit is pending and sending notice of the election to the
	department and the office of the attorney general. The election
	must be filed not later than the 10th day after the date on which the
	answer is due or the date on which the answer is filed, whichever is
	earlier. If a civil penalty is requested after the initial filing of
	a Section 242.094 action through the filing of an amended or
	supplemental pleading, an affected facility must elect arbitration
	not later than the 10th day after the date on which the amended or
	supplemental pleading is served on the affected facility or the
	facility's counsel.
	(c)  The department may elect arbitration under this
	subchapter by filing the election with the court in which the
	lawsuit is pending and by notifying the facility of the election not
	later than the date on which the facility may elect arbitration
	under Subsection (b).
	(d)  Arbitration may not be used to resolve a dispute related
	to an affected facility that has had an arbitration award levied
	against it in the previous five years.
	(e)  If arbitration is not permitted under this subchapter or
	the election of arbitration is not timely filed:
	(1)  the court shall dismiss the arbitration election
	and retain jurisdiction of the lawsuit; and
	(2)  the State Office of Administrative Hearings shall
	dismiss the arbitration and does not have jurisdiction over the
	lawsuit.
	(f)  An election to engage in arbitration under this
	subchapter is irrevocable and binding on the facility and the
	department.
	Sec. 247.083.  ARBITRATION PROCEDURES. (a)  The arbitration
	shall be conducted by an arbitrator.
	(b)  The arbitration and the appointment of the arbitrator
	shall be conducted in accordance with rules adopted by the chief
	administrative law judge of the State Office of Administrative
	Hearings. Before adopting rules under this subsection, the chief
	administrative law judge shall consult with the department and
	shall consider appropriate rules developed by any nationally
	recognized association that performs arbitration services.
	(c)  The party that elects arbitration shall pay the cost of
	the arbitration. The total fees and expenses paid for an arbitrator
	for a day may not exceed $1,000.
	(d)  The State Office of Administrative Hearings may
	designate a nationally recognized association that performs
	arbitration services to conduct arbitrations under this subchapter
	and may, after consultation with the department, contract with that
	association for the arbitrations.
	(e)  On request by the department, the attorney general may
	represent the department in the arbitration.
	Sec. 247.084.  ARBITRATOR QUALIFICATIONS. Each arbitrator
	must be on an approved list of a nationally recognized association
	that performs arbitration services or be otherwise qualified as
	provided in the rules adopted under Section 247.083(b).
	Sec. 247.085.  ARBITRATOR SELECTION. The arbitrator shall
	be appointed in accordance with the rules adopted under Section
	247.083(b).
	Sec. 247.086.  ARBITRATOR DUTIES. The arbitrator shall:
	(1)  protect the interests of the department and the
	facility;
	(2)  ensure that all relevant evidence has been
	disclosed to the arbitrator, department, and facility; and
	(3)  render an order consistent with this chapter and
	the rules adopted under this chapter.
	Sec. 247.087.  SCHEDULING OF ARBITRATION. (a)  The
	arbitrator conducting the arbitration shall schedule arbitration
	to be held not later than the 90th day after the date the arbitrator
	is selected and shall notify the department and the facility of the
	scheduled date.
	(b)  The arbitrator may grant a continuance of the
	arbitration at the request of the department or facility. The
	arbitrator may not unreasonably deny a request for a continuance.
	Sec. 247.088.  EXCHANGE AND FILING OF INFORMATION. Not
	later than the seventh day before the first day of arbitration, the
	department and the facility shall exchange and file with the
	arbitrator:
	(1)  all documentary evidence not previously exchanged
	and filed that is relevant to the dispute; and
	(2)  information relating to a proposed resolution of
	the dispute.
	Sec. 247.089.  ATTENDANCE. (a)  The arbitrator may proceed
	in the absence of any party or representative of a party who, after
	notice of the proceeding, fails to be present or to obtain a
	postponement.
	(b)  An arbitrator may not make an order solely on the
	default of a party and shall require the party who is present to
	submit evidence, as required by the arbitrator, before making an
	award.
	Sec. 247.090.  TESTIMONY; RECORD. (a)  The arbitrator may
	require witnesses to testify under oath and shall require testimony
	under oath if requested by the department or the facility.
	(b)  The department shall make an electronic recording of the
	proceeding.
	(c)  An official stenographic record of the proceeding is not
	required, but the department or the facility may make a
	stenographic record. The party that makes the stenographic record
	shall pay the expense of having the record made.
	Sec. 247.091.  EVIDENCE. (a)  The department or the facility
	may offer evidence and shall produce additional evidence as the
	arbitrator considers necessary to understand and resolve the
	dispute.
	(b)  The arbitrator is the judge of the relevance and
	materiality of the evidence offered. Strict conformity to rules
	applicable to judicial proceedings is not required.
	Sec. 247.092.  CLOSING STATEMENTS; BRIEFS. The department
	and the facility may present closing statements, but the record
	does not remain open for written briefs unless required by the
	arbitrator.
	Sec. 247.093.  EX PARTE CONTACTS PROHIBITED. (a)  Except as
	provided by Subsection (b), the department and the facility may not
	communicate with an arbitrator other than at an oral hearing unless
	the parties and the arbitrator agree otherwise.
	(b)  Any oral or written communication, other than a
	communication authorized under Subsection (a), from the parties to
	an arbitrator shall be directed to the association that is
	conducting the arbitration or, if there is no association
	conducting the arbitration, to the State Office of Administrative
	Hearings for transmittal to the arbitrator.
	Sec. 247.094.  ORDER. (a)  The arbitrator may enter any
	order that may be entered by the department, board, commissioner,
	or court under this chapter in relation to a dispute described by
	Section 247.081.
	(b)  The arbitrator shall enter the order not later than the
	60th day after the last day of the arbitration.
	(c)  The arbitrator shall base the order on the facts
	established at arbitration, including stipulations of the parties,
	and on the law as properly applied to those facts.
	(d)  The order must:
	(1)  be in writing;
	(2)  be signed and dated by the arbitrator; and
	(3)  include a statement of the arbitrator's decision
	on the contested issues and the department's and facility's
	stipulations on uncontested issues.
	(e)  The arbitrator shall file a copy of the order with the
	department and shall notify the department and the facility in
	writing of the decision.
	Sec. 247.095.  EFFECT OF ORDER. An order of an arbitrator
	under this subchapter is final and binding on all parties. Except
	as provided by Section 247.097, there is no right to appeal.
	Sec. 247.096.  CLERICAL ERROR. For the purpose of
	correcting a clerical error, an arbitrator retains jurisdiction of
	the award until the 20th day after the date of the award.
	Sec. 247.097.  COURT VACATING ORDER. (a)  On a finding
	described by Subsection (b), a court shall:
	(1)  on application of a facility, vacate an
	arbitrator's order with respect to an arbitration conducted at the
	election of the department; or
	(2)  on application of the department, vacate an
	arbitrator's order with respect to an arbitration conducted at the
	election of a facility.
	(b)  A court shall vacate an arbitrator's order under
	Subsection (a) only on a finding that:
	(1)  the order was procured by corruption, fraud, or
	misrepresentation;
	(2)  the decision of the arbitrator was arbitrary or
	capricious and against the weight of the evidence; or
	(3)  the order exceeded the jurisdiction of the
	arbitrator under Section 247.094(a).
	(c)  If the order is vacated, the dispute shall be remanded
	to the department for another arbitration proceeding.
	(d)  A suit to vacate an arbitrator's order must be filed not
	later than the 30th day after:
	(1)  the date of the award; or
	(2)  the date the facility or department knew or should
	have known of a basis for suit under this section, but in no event
	later than the first anniversary of the date of the order.
	(e)  Venue for a suit to vacate an arbitrator's order is in
	the county in which the arbitration was conducted.
	Sec. 247.098.  ENFORCEMENT OF CERTAIN ARBITRATION ORDERS FOR
	CIVIL PENALTIES. (a) This section applies only to a suit for the
	assessment of a civil penalty under Section 247.045 in which
	binding arbitration has been elected under this subchapter as an
	alternative to the judicial proceeding.
	(b)  On application of a party to the suit, the district
	court in which the underlying suit has been filed shall enter a
	judgment in accordance with the arbitrator's order unless, within
	the time limit prescribed by Section 247.097(d)(2), a motion is
	made to the court to vacate the arbitrator's order in accordance
	with Section 247.097.
	(c)  A judgment filed under Subsection (b) is enforceable in
	the same manner as any other judgment of the court. The court may
	award costs for an application made under Subsection (b) and for any
	proceedings held after the application is made.
	(d)  Subsection (b) does not affect the right of a party, in
	accordance with Section 247.097 and within the time limit
	prescribed by Section 247.097(d)(2), if applicable, to make a
	motion to the court or initiate a proceeding in court as provided by
	law to vacate the arbitrator's order or to vacate a judgment of the
	court entered in accordance with the arbitrator's order.
	SECTION 3.  Section 531.058, Government Code, is amended by
	amending Subsection (a) and adding Subsection (d) to read as
	follows:
	(a)  The commission by rule shall establish an informal
	dispute resolution process in accordance with this section. The
	process must provide for adjudication by an appropriate
	disinterested person of disputes relating to a proposed enforcement
	action or related proceeding of the Texas Department of Human
	Services under Section 32.021(d), Human Resources Code, or Chapter
	242, 247, or 252, Health and Safety Code. The informal dispute
	resolution process must require:
	(1)  an [the] institution or facility to request
	informal dispute resolution not later than the 10th calendar day
	after notification by the department of the violation of a standard
	or standards; and
	(2)  the commission to complete the process not later
	than:
	(A)  the 30th calendar day after receipt of a
	request from an [the] institution or facility, other than an
	assisted living facility, for informal dispute resolution; or
	(B)  the 90th calendar day after receipt of a
	request from an assisted living facility for informal dispute
	resolution[; and
	[(3)     any individual representing an institution or
	facility in an informal dispute resolution process to register with
	the commission and disclose the following:
	[(A)     the individual's employment history during
	the preceding five years, including employment in regulatory
	agencies of this state and other states;
	[(B)     ownership, including the identity of the
	controlling person or persons, of the institution or facility the
	individual is representing before the commission; and
	[(C)     the identity of other entities the
	individual represents or has represented before the commission
	during the previous 24 months].
	(d)  The commission shall use a negotiated rulemaking
	process and engage a qualified impartial third party as provided by
	Section 2009.053, with the goal of adopting rules that are fair and
	impartial to all parties not later than January 1, 2015. This
	subsection expires September 1, 2015.
	SECTION 4.  Section 247.051, Health and Safety Code, as
	amended by this Act, and Section 247.081, Health and Safety Code, as
	added by this Act, apply only to disputes described by those
	sections, as amended or added, that occur on or after the effective
	date of this Act. A dispute that occurs before the effective date
	of this Act is governed by the law applicable to the dispute
	immediately before the effective date of this Act, and that law is
	continued in effect for that purpose.
	SECTION 5.  This Act takes effect September 1, 2013.