By Turner of Harris                                   H.B. No. 1572
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the authority of physicians and podiatrists to form
 1-3     certain jointly owned entities and to the authority of certain
 1-4     medical schools to employ physicians.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Subsection A, Article 11.01, Texas Limited
 1-7     Liability Company Act (Article 1528n, Vernon's Texas Civil
 1-8     Statutes), is amended to read as follows:
 1-9           A.  (1)  One or more persons may organize a professional
1-10     limited liability company by filing articles of organization with
1-11     the Secretary of State in accordance with Part Three of this Act.
1-12     In addition to other provisions required or permitted by law, the
1-13     articles of organization of a professional limited liability
1-14     company must include a statement:
1-15                       (a)  that the limited liability company is a
1-16     professional limited liability company; and
1-17                       (b)  describing the [one] specific kind of
1-18     professional service to be rendered by the limited liability
1-19     company.
1-20                 (2)  Except as provided by Subdivision (3) of this
1-21     subsection, a [A] professional limited liability company:
1-22                       (a)  may be organized under this Act only for the
1-23     purpose of rendering one specific type of professional service and
1-24     ancillary services; and
 2-1                       (b)  [.  A professional limited liability company
 2-2     organized under this Act] may not render more than one kind of
 2-3     professional service.
 2-4                 (3)  Doctors of medicine and osteopathy licensed by the
 2-5     Texas State Board of Medical Examiners and podiatrists licensed by
 2-6     the Texas State Board of Podiatric Medical Examiners may organize a
 2-7     professional limited liability company that is jointly owned by
 2-8     those practitioners to perform a professional service that falls
 2-9     within the scope of practice of those practitioners.  When doctors
2-10     of medicine, osteopathy, and podiatry organize a professional
2-11     limited liability company that is jointly owned by those
2-12     practitioners, the authority of each of the practitioners is
2-13     limited by the scope of practice of the respective practitioners
2-14     and none can exercise control over the other's clinical authority
2-15     granted by their respective licenses, either through agreements,
2-16     bylaws, directives, financial incentives, or other arrangements
2-17     that would assert control over treatment decisions made by the
2-18     practitioner.  The Texas State Board of Medical Examiners and the
2-19     Texas State Board of Podiatric Medical Examiners continue to
2-20     exercise regulatory authority over their respective licenses.
2-21           SECTION 2.  Article 2.01, Texas Non-Profit Corporation Act
2-22     (Article 1396-2.01, Vernon's Texas Civil Statutes), is amended by
2-23     amending Subsection B and adding Subsections C and D to read as
2-24     follows:
2-25           B.  This Act shall not apply to any corporation, nor may any
2-26     corporation be organized under this Act or obtain authority to
2-27     conduct its affairs in this State under this Act:
 3-1                 (1)  If any one or more of its purposes for the conduct
 3-2     of its affairs in this State is expressly forbidden by any law of
 3-3     this State.
 3-4                 (2)  If any one or more of its purposes for the conduct
 3-5     of its affairs in this State is to engage in any activity which
 3-6     cannot lawfully be engaged in without first obtaining a license
 3-7     under the authority of the laws of this State to engage in such
 3-8     activity and such license cannot lawfully be granted to a
 3-9     corporation, except as provided by Subsection C.
3-10                 (3)  If any one or more of its purposes for the conduct
3-11     of its affairs in this State is to organize Group Hospital Service,
3-12     Rural Credit Unions, Agricultural and Livestock Pools, Mutual Loan
3-13     Corporations, Co-operative Credit Associations, Farmers'
3-14     Co-operative Societies, Co-operative Marketing Act Corporations,
3-15     Rural Electric Co-operative Corporations, Telephone Co-operative
3-16     Corporations, or fraternal organizations operating under the lodge
3-17     system and heretofore or hereafter incorporated under Articles 1399
3-18     through 1407, both inclusive, of Revised Civil Statutes of Texas,
3-19     1925.
3-20                 (4)  If any one or more of its purposes for the conduct
3-21     of its affairs in this State is to operate a bank under the banking
3-22     laws of this State or to operate an insurance company of any type
3-23     or character that operates under the insurance laws of this State.
3-24                 (5)  If any one or more of its purposes for the conduct
3-25     of its affairs in this State is to engage in water or sewer service
3-26     and it has heretofore or is hereafter incorporated under the Acts
3-27     of 1933, Forty-third Legislature, First Called Session, Chapter 76,
 4-1     as amended, Acts of 1941, Forty-seventh Legislature, page 666,
 4-2     Chapter 407, being presently identified as Article 1434(a), Revised
 4-3     Civil Statutes of Texas, 1925.
 4-4           C.  Doctors of medicine and osteopathy licensed by the Texas
 4-5     State Board of Medical Examiners and podiatrists licensed by the
 4-6     Texas State Board of Podiatric Medical Examiners may organize a
 4-7     non-profit corporation under this Act that is jointly owned,
 4-8     managed, and controlled by those practitioners to perform a
 4-9     professional service that falls within the scope of practice of
4-10     those practitioners and consists of:
4-11                 (1)  carrying out research in the public interest in
4-12     medical science, medical economics, public health, sociology, or a
4-13     related field;
4-14                 (2)  supporting medical education in medical schools
4-15     through grants or scholarships;
4-16                 (3)  developing the capabilities of individuals or
4-17     institutions studying, teaching, or practicing medicine, including
4-18     podiatric medicine;
4-19                 (4)  delivering health care to the public; or
4-20                 (5)  instructing the public regarding medical science,
4-21     public health, hygiene, or a related matter.
4-22           D.  When doctors of medicine, osteopathy, and podiatry
4-23     organize a non-profit corporation that is jointly owned by those
4-24     practitioners, the authority of each of the practitioners is
4-25     limited by the scope of practice of the respective practitioners
4-26     and none can exercise control over the other's clinical authority
4-27     granted by their respective licenses, either through agreements,
 5-1     articles of incorporation, bylaws, directives, financial
 5-2     incentives, or other arrangements that would assert control over
 5-3     treatment decisions made by the practitioner.  The Texas State
 5-4     Board of Medical Examiners and the Texas State Board of Podiatric
 5-5     Medical Examiners continue to exercise regulatory authority over
 5-6     their respective licenses.
 5-7           SECTION 3.  Section 2.02, Texas Revised Partnership Act
 5-8     (Article 6132b-2.02, Vernon's Texas Civil Statutes), is amended by
 5-9     adding Subsection (e) to read as follows:
5-10           (e)  Authority of Doctors of Medicine and Osteopathy and
5-11     Podiatrists to Create Partnership.  Doctors of medicine and
5-12     osteopathy licensed by the Texas State Board of Medical Examiners
5-13     and podiatrists licensed by the Texas State Board of Podiatric
5-14     Medical Examiners may create a partnership that is jointly owned by
5-15     those practitioners to perform a professional service that falls
5-16     within the scope of practice of those practitioners.  When doctors
5-17     of medicine, osteopathy, and podiatry create a partnership that is
5-18     jointly owned by those practitioners, the authority of each of the
5-19     practitioners is limited by the scope of practice of the respective
5-20     practitioners and none can exercise control over the other's
5-21     clinical authority granted by their respective licenses, either
5-22     through agreements, bylaws, directives, financial incentives, or
5-23     other arrangements that would assert control over treatment
5-24     decisions made by the practitioner.  The Texas State Board of
5-25     Medical Examiners and the Texas State Board of Podiatric Medical
5-26     Examiners continue to exercise regulatory authority over their
5-27     respective licenses.
 6-1           SECTION 4.  Subchapter E, Medical Practice Act (Article
 6-2     4495b, Vernon's Texas Civil Statutes), is amended by adding Section
 6-3     5.12 to read as follows:
 6-4           Sec. 5.12.  EMPLOYMENT OF PHYSICIANS BY PRIVATE MEDICAL
 6-5     SCHOOL.  A private medical school accredited by the Liaison
 6-6     Committee on Medical Education, in fulfilling its mission, may:
 6-7                 (1)  employ or contract for the services of physicians
 6-8     to provide medical services; and
 6-9                 (2)  retain all or part of the professional income
6-10     generated by a physician providing medical services under
6-11     Subdivision (1).
6-12           SECTION 5.  The importance of this legislation and the
6-13     crowded condition of the calendars in both houses create an
6-14     emergency and an imperative public necessity that the
6-15     constitutional rule requiring bills to be read on three several
6-16     days in each house be suspended, and this rule is hereby suspended,
6-17     and that this Act take effect and be in force from and after its
6-18     passage, and it is so enacted.