1-1 AN ACT
1-2 relating to the authority of physicians and podiatrists to form
1-3 certain jointly owned entities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsection A, Article 11.01, Texas Limited
1-6 Liability Company Act (Article 1528n, Vernon's Texas Civil
1-7 Statutes), is amended to read as follows:
1-8 A. (1) One or more persons may organize a professional
1-9 limited liability company by filing articles of organization with
1-10 the Secretary of State in accordance with Part Three of this Act.
1-11 In addition to other provisions required or permitted by law, the
1-12 articles of organization of a professional limited liability
1-13 company must include a statement:
1-14 (a) that the limited liability company is a
1-15 professional limited liability company; and
1-16 (b) describing the [one] specific kind of
1-17 professional service to be rendered by the limited liability
1-18 company.
1-19 (2) Except as provided by Subdivision (3) of this
1-20 subsection, a [A] professional limited liability company:
1-21 (a) may be organized under this Act only for the
1-22 purpose of rendering one specific type of professional service and
1-23 ancillary services; and
1-24 (b) [. A professional limited liability company
2-1 organized under this Act] may not render more than one kind of
2-2 professional service.
2-3 (3) Doctors of medicine and osteopathy licensed by the
2-4 Texas State Board of Medical Examiners and podiatrists licensed by
2-5 the Texas State Board of Podiatric Medical Examiners may organize a
2-6 professional limited liability company that is jointly owned by
2-7 those practitioners to perform a professional service that falls
2-8 within the scope of practice of those practitioners. When doctors
2-9 of medicine, osteopathy, and podiatry organize a professional
2-10 limited liability company that is jointly owned by those
2-11 practitioners, the authority of each of the practitioners is
2-12 limited by the scope of practice of the respective practitioners
2-13 and none can exercise control over the other's clinical authority
2-14 granted by their respective licenses, either through agreements,
2-15 bylaws, directives, financial incentives, or other arrangements
2-16 that would assert control over treatment decisions made by the
2-17 practitioner. The Texas State Board of Medical Examiners and the
2-18 Texas State Board of Podiatric Medical Examiners continue to
2-19 exercise regulatory authority over their respective licenses.
2-20 SECTION 2. Article 2.01, Texas Non-Profit Corporation Act
2-21 (Article 1396-2.01, Vernon's Texas Civil Statutes), is amended by
2-22 amending Subsection B and adding Subsections C and D to read as
2-23 follows:
2-24 B. This Act shall not apply to any corporation, nor may any
2-25 corporation be organized under this Act or obtain authority to
2-26 conduct its affairs in this State under this Act:
2-27 (1) If any one or more of its purposes for the conduct
3-1 of its affairs in this State is expressly forbidden by any law of
3-2 this State.
3-3 (2) If any one or more of its purposes for the conduct
3-4 of its affairs in this State is to engage in any activity which
3-5 cannot lawfully be engaged in without first obtaining a license
3-6 under the authority of the laws of this State to engage in such
3-7 activity and such license cannot lawfully be granted to a
3-8 corporation, except as provided by Subsection C.
3-9 (3) If any one or more of its purposes for the conduct
3-10 of its affairs in this State is to organize Group Hospital Service,
3-11 Rural Credit Unions, Agricultural and Livestock Pools, Mutual Loan
3-12 Corporations, Co-operative Credit Associations, Farmers'
3-13 Co-operative Societies, Co-operative Marketing Act Corporations,
3-14 Rural Electric Co-operative Corporations, Telephone Co-operative
3-15 Corporations, or fraternal organizations operating under the lodge
3-16 system and heretofore or hereafter incorporated under Articles 1399
3-17 through 1407, both inclusive, of Revised Civil Statutes of Texas,
3-18 1925.
3-19 (4) If any one or more of its purposes for the conduct
3-20 of its affairs in this State is to operate a bank under the banking
3-21 laws of this State or to operate an insurance company of any type
3-22 or character that operates under the insurance laws of this State.
3-23 (5) If any one or more of its purposes for the conduct
3-24 of its affairs in this State is to engage in water or sewer service
3-25 and it has heretofore or is hereafter incorporated under the Acts
3-26 of 1933, Forty-third Legislature, First Called Session, Chapter 76,
3-27 as amended, Acts of 1941, Forty-seventh Legislature, page 666,
4-1 Chapter 407, being presently identified as Article 1434(a), Revised
4-2 Civil Statutes of Texas, 1925.
4-3 C. Doctors of medicine and osteopathy licensed by the Texas
4-4 State Board of Medical Examiners and podiatrists licensed by the
4-5 Texas State Board of Podiatric Medical Examiners may organize a
4-6 non-profit corporation under this Act that is jointly owned,
4-7 managed, and controlled by those practitioners to perform a
4-8 professional service that falls within the scope of practice of
4-9 those practitioners and consists of:
4-10 (1) carrying out research in the public interest in
4-11 medical science, medical economics, public health, sociology, or a
4-12 related field;
4-13 (2) supporting medical education in medical schools
4-14 through grants or scholarships;
4-15 (3) developing the capabilities of individuals or
4-16 institutions studying, teaching, or practicing medicine, including
4-17 podiatric medicine;
4-18 (4) delivering health care to the public; or
4-19 (5) instructing the public regarding medical science,
4-20 public health, hygiene, or a related matter.
4-21 D. When doctors of medicine, osteopathy, and podiatry
4-22 organize a non-profit corporation that is jointly owned by those
4-23 practitioners, the authority of each of the practitioners is
4-24 limited by the scope of practice of the respective practitioners
4-25 and none can exercise control over the other's clinical authority
4-26 granted by their respective licenses, either through agreements,
4-27 articles of incorporation, bylaws, directives, financial
5-1 incentives, or other arrangements that would assert control over
5-2 treatment decisions made by the practitioner. The Texas State
5-3 Board of Medical Examiners and the Texas State Board of Podiatric
5-4 Medical Examiners continue to exercise regulatory authority over
5-5 their respective licenses.
5-6 SECTION 3. Section 2.02, Texas Revised Partnership Act
5-7 (Article 6132b-2.02, Vernon's Texas Civil Statutes), is amended by
5-8 adding Subsection (e) to read as follows:
5-9 (e) Authority of Doctors of Medicine and Osteopathy and
5-10 Podiatrists to Create Partnership. Doctors of medicine and
5-11 osteopathy licensed by the Texas State Board of Medical Examiners
5-12 and podiatrists licensed by the Texas State Board of Podiatric
5-13 Medical Examiners may create a partnership that is jointly owned by
5-14 those practitioners to perform a professional service that falls
5-15 within the scope of practice of those practitioners. When doctors
5-16 of medicine, osteopathy, and podiatry create a partnership that is
5-17 jointly owned by those practitioners, the authority of each of the
5-18 practitioners is limited by the scope of practice of the respective
5-19 practitioners and none can exercise control over the other's
5-20 clinical authority granted by their respective licenses, either
5-21 through agreements, bylaws, directives, financial incentives, or
5-22 other arrangements that would assert control over treatment
5-23 decisions made by the practitioner. The Texas State Board of
5-24 Medical Examiners and the Texas State Board of Podiatric Medical
5-25 Examiners continue to exercise regulatory authority over their
5-26 respective licenses.
5-27 SECTION 4. The importance of this legislation and the
6-1 crowded condition of the calendars in both houses create an
6-2 emergency and an imperative public necessity that the
6-3 constitutional rule requiring bills to be read on three several
6-4 days in each house be suspended, and this rule is hereby suspended,
6-5 and that this Act take effect and be in force from and after its
6-6 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1572 was passed by the House on April
15, 1999, by the following vote: Yeas 144, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1572 on May 19, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1572 was passed by the Senate, with
amendments, on May 17, 1999, by the following vote: Yeas 30, Nays
0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor