1-1 By: Turner of Harris (Senate Sponsor - Barrientos) H.B. No. 1572
1-2 (In the Senate - Received from the House April 16, 1999;
1-3 April 19, 1999, read first time and referred to Committee on Health
1-4 Services; May 6, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 5, Nays 0; May 6, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1572 By: Madla
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the authority of physicians and podiatrists to form
1-11 certain jointly owned entities.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subsection A, Article 11.01, Texas Limited
1-14 Liability Company Act (Article 1528n, Vernon's Texas Civil
1-15 Statutes), is amended to read as follows:
1-16 A. (1) One or more persons may organize a professional
1-17 limited liability company by filing articles of organization with
1-18 the Secretary of State in accordance with Part Three of this Act.
1-19 In addition to other provisions required or permitted by law, the
1-20 articles of organization of a professional limited liability
1-21 company must include a statement:
1-22 (a) that the limited liability company is a
1-23 professional limited liability company; and
1-24 (b) describing the [one] specific kind of
1-25 professional service to be rendered by the limited liability
1-26 company.
1-27 (2) Except as provided by Subdivision (3) of this
1-28 subsection, a [A] professional limited liability company:
1-29 (a) may be organized under this Act only for the
1-30 purpose of rendering one specific type of professional service and
1-31 ancillary services; and
1-32 (b) [. A professional limited liability company
1-33 organized under this Act] may not render more than one kind of
1-34 professional service.
1-35 (3) Doctors of medicine and osteopathy licensed by the
1-36 Texas State Board of Medical Examiners and podiatrists licensed by
1-37 the Texas State Board of Podiatric Medical Examiners may organize a
1-38 professional limited liability company that is jointly owned by
1-39 those practitioners to perform a professional service that falls
1-40 within the scope of practice of those practitioners. When doctors
1-41 of medicine, osteopathy, and podiatry organize a professional
1-42 limited liability company that is jointly owned by those
1-43 practitioners, the authority of each of the practitioners is
1-44 limited by the scope of practice of the respective practitioners
1-45 and none can exercise control over the other's clinical authority
1-46 granted by their respective licenses, either through agreements,
1-47 bylaws, directives, financial incentives, or other arrangements
1-48 that would assert control over treatment decisions made by the
1-49 practitioner. The Texas State Board of Medical Examiners and the
1-50 Texas State Board of Podiatric Medical Examiners continue to
1-51 exercise regulatory authority over their respective licenses.
1-52 SECTION 2. Article 2.01, Texas Non-Profit Corporation Act
1-53 (Article 1396-2.01, Vernon's Texas Civil Statutes), is amended by
1-54 amending Subsection B and adding Subsections C and D to read as
1-55 follows:
1-56 B. This Act shall not apply to any corporation, nor may any
1-57 corporation be organized under this Act or obtain authority to
1-58 conduct its affairs in this State under this Act:
1-59 (1) If any one or more of its purposes for the conduct
1-60 of its affairs in this State is expressly forbidden by any law of
1-61 this State.
1-62 (2) If any one or more of its purposes for the conduct
1-63 of its affairs in this State is to engage in any activity which
1-64 cannot lawfully be engaged in without first obtaining a license
2-1 under the authority of the laws of this State to engage in such
2-2 activity and such license cannot lawfully be granted to a
2-3 corporation, except as provided by Subsection C.
2-4 (3) If any one or more of its purposes for the conduct
2-5 of its affairs in this State is to organize Group Hospital Service,
2-6 Rural Credit Unions, Agricultural and Livestock Pools, Mutual Loan
2-7 Corporations, Co-operative Credit Associations, Farmers'
2-8 Co-operative Societies, Co-operative Marketing Act Corporations,
2-9 Rural Electric Co-operative Corporations, Telephone Co-operative
2-10 Corporations, or fraternal organizations operating under the lodge
2-11 system and heretofore or hereafter incorporated under Articles 1399
2-12 through 1407, both inclusive, of Revised Civil Statutes of Texas,
2-13 1925.
2-14 (4) If any one or more of its purposes for the conduct
2-15 of its affairs in this State is to operate a bank under the banking
2-16 laws of this State or to operate an insurance company of any type
2-17 or character that operates under the insurance laws of this State.
2-18 (5) If any one or more of its purposes for the conduct
2-19 of its affairs in this State is to engage in water or sewer service
2-20 and it has heretofore or is hereafter incorporated under the Acts
2-21 of 1933, Forty-third Legislature, First Called Session, Chapter 76,
2-22 as amended, Acts of 1941, Forty-seventh Legislature, page 666,
2-23 Chapter 407, being presently identified as Article 1434(a), Revised
2-24 Civil Statutes of Texas, 1925.
2-25 C. Doctors of medicine and osteopathy licensed by the Texas
2-26 State Board of Medical Examiners and podiatrists licensed by the
2-27 Texas State Board of Podiatric Medical Examiners may organize a
2-28 non-profit corporation under this Act that is jointly owned,
2-29 managed, and controlled by those practitioners to perform a
2-30 professional service that falls within the scope of practice of
2-31 those practitioners and consists of:
2-32 (1) carrying out research in the public interest in
2-33 medical science, medical economics, public health, sociology, or a
2-34 related field;
2-35 (2) supporting medical education in medical schools
2-36 through grants or scholarships;
2-37 (3) developing the capabilities of individuals or
2-38 institutions studying, teaching, or practicing medicine, including
2-39 podiatric medicine;
2-40 (4) delivering health care to the public; or
2-41 (5) instructing the public regarding medical science,
2-42 public health, hygiene, or a related matter.
2-43 D. When doctors of medicine, osteopathy, and podiatry
2-44 organize a non-profit corporation that is jointly owned by those
2-45 practitioners, the authority of each of the practitioners is
2-46 limited by the scope of practice of the respective practitioners
2-47 and none can exercise control over the other's clinical authority
2-48 granted by their respective licenses, either through agreements,
2-49 articles of incorporation, bylaws, directives, financial
2-50 incentives, or other arrangements that would assert control over
2-51 treatment decisions made by the practitioner. The Texas State
2-52 Board of Medical Examiners and the Texas State Board of Podiatric
2-53 Medical Examiners continue to exercise regulatory authority over
2-54 their respective licenses.
2-55 SECTION 3. Section 2.02, Texas Revised Partnership Act
2-56 (Article 6132b-2.02, Vernon's Texas Civil Statutes), is amended by
2-57 adding Subsection (e) to read as follows:
2-58 (e) Authority of Doctors of Medicine and Osteopathy and
2-59 Podiatrists to Create Partnership. Doctors of medicine and
2-60 osteopathy licensed by the Texas State Board of Medical Examiners
2-61 and podiatrists licensed by the Texas State Board of Podiatric
2-62 Medical Examiners may create a partnership that is jointly owned by
2-63 those practitioners to perform a professional service that falls
2-64 within the scope of practice of those practitioners. When doctors
2-65 of medicine, osteopathy, and podiatry create a partnership that is
2-66 jointly owned by those practitioners, the authority of each of the
2-67 practitioners is limited by the scope of practice of the respective
2-68 practitioners and none can exercise control over the other's
2-69 clinical authority granted by their respective licenses, either
3-1 through agreements, bylaws, directives, financial incentives, or
3-2 other arrangements that would assert control over treatment
3-3 decisions made by the practitioner. The Texas State Board of
3-4 Medical Examiners and the Texas State Board of Podiatric Medical
3-5 Examiners continue to exercise regulatory authority over their
3-6 respective licenses.
3-7 SECTION 4. The importance of this legislation and the
3-8 crowded condition of the calendars in both houses create an
3-9 emergency and an imperative public necessity that the
3-10 constitutional rule requiring bills to be read on three several
3-11 days in each house be suspended, and this rule is hereby suspended,
3-12 and that this Act take effect and be in force from and after its
3-13 passage, and it is so enacted.
3-14 * * * * *