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A BILL TO BE ENTITLED
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AN ACT
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relating to the regulation of certain chiropractic clinics; |
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providing administrative and criminal penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle G, Title 2, Health and Safety Code, is |
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amended by adding Chapter 147 to read as follows: |
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CHAPTER 147. NON-DOCTOR-OF-CHIROPRACTIC-OWNED CHIROPRACTIC |
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CLINICS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 147.001. DEFINITIONS. In this chapter: |
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(1) "Applicant" means a person or business seeking to |
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be licensed under this chapter or seeking the renewal of a license |
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under this chapter. |
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(2) "Board" means the Texas Board of Chiropractic |
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Examiners. |
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(3) "Commission" means the Texas Commission of |
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Licensing and Regulation. |
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(4) "Commissioner" means the commissioner of |
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licensing and regulation. |
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(5) "Contracting doctor of chiropractic" means a |
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person engaged in the practice of chiropractic as described by |
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Section 201.002, Occupations Code, who holds a current active |
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license to practice chiropractic and who has entered into a |
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contractual agreement with a licensed chiropractic clinic owner to |
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provide chiropractic care. |
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(6) "Controlling person" means: |
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(A) an officer or director of a corporation |
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seeking a license under this chapter, a shareholder holding 10 |
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percent or more of the voting stock of a corporation seeking to own |
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or operate a non-doctor-of-chiropractic-owned chiropractic clinic, |
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or a partner of a partnership seeking to own or operate a |
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non-doctor-of-chiropractic-owned chiropractic clinic; or |
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(B) an individual who possesses, directly or |
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indirectly, the power to direct or cause the direction of the |
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management or policies of a company that owns and operates a |
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non-doctor-of-chiropractic-owned chiropractic clinic through the |
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ownership of voting securities, by contract or otherwise. |
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(7) "Department" means the Texas Department of |
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Licensing and Regulation. |
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(8) "Doctor of chiropractic" means a person engaged in |
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the practice of chiropractic as described by Section 201.002, |
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Occupations Code. |
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(9) "License holder" means an individual or entity |
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licensed under this chapter who owns or operates a |
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non-doctor-of-chiropractic-owned chiropractic clinic. |
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(10) "Non-doctor-of-chiropractic-owned chiropractic |
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clinic" means a chiropractic facility licensed under this chapter |
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and registered under Section 201.312, Occupations Code. |
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Sec. 147.002. APPLICABILITY. This chapter does not apply |
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to the provision of chiropractic care, services, or procedures by a |
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doctor of chiropractic employed by or contracted with: |
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(1) a licensed physician; |
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(2) a person licensed as a physician and organized |
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under Title 7, Business Organizations Code; |
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(3) a person organized under Title 4, Business |
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Organizations Code, and composed entirely of licensed physicians; |
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(4) an approved nonprofit health corporation |
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certified under Chapter 162, Occupations Code; |
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(5) a medical school or medical and dental unit, as |
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defined by Section 61.003, Education Code, that employs or |
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contracts with a physician in a practice plan or to teach or provide |
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medical services; or |
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(6) any other entity wholly owned by one or more |
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licensed physicians. |
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[Sections 147.003-147.050 reserved for expansion] |
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SUBCHAPTER B. POWERS AND DUTIES OF DEPARTMENT AND COMMISSIONER |
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Sec. 147.051. RULES. (a) The commissioner shall adopt |
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rules as necessary to administer this chapter. |
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(b) Each license holder is governed and controlled by this |
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chapter and the rules adopted by the commissioner. |
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Sec. 147.052. INTERAGENCY COOPERATION. (a) Each state |
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agency that, in performing duties under other law, affects the |
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regulation of non-doctor-of-chiropractic-owned chiropractic |
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clinics shall cooperate with the department, the commissioner, and |
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other state agencies as necessary to fully implement and enforce |
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this chapter. |
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(b) The board, the Texas Department of Insurance, the |
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division of workers' compensation of the Texas Department of |
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Insurance, and the attorney general's office shall assist in the |
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implementation of this chapter and shall provide information to the |
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department on request. |
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Sec. 147.053. USE OF FEES. A fee collected by the |
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department under this chapter shall be used to implement and |
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enforce this chapter. |
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[Sections 147.054-147.100 reserved for expansion] |
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SUBCHAPTER C. LICENSING |
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Sec. 147.101. LICENSE REQUIRED. A |
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non-doctor-of-chiropractic-owned clinic may not allow a doctor of |
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chiropractic to engage in or offer chiropractic services or |
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chiropractic care at the clinic unless each controlling person for |
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the clinic holds a license issued under this chapter. |
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Sec. 147.102. LICENSE APPLICATION. (a) Each controlling |
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person for a non-doctor-of-chiropractic-owned chiropractic clinic |
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that desires an original or renewal |
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non-doctor-of-chiropractic-owned chiropractic clinic license |
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shall file with the department a written application accompanied by |
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the application fee. |
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(b) The department may require an applicant for a license |
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to provide information and certifications necessary to determine |
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that the applicant meets the licensing requirements of this |
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chapter. The department may also require the applicant to provide |
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information and certifications necessary to determine whether |
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individuals affiliated with the applicant are qualified to serve as |
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controlling persons. |
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(c) An applicant, a license holder, the spouse of an |
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applicant or license holder, a partner of a limited liability |
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partnership, or any stockholder of a corporation is ineligible for |
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a license for two years after the date of a final department action |
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on the denial or revocation of a license applied for or issued under |
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this chapter. This restriction does not apply to a denial or |
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revocation of a license based on: |
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(1) an inadvertent error or omission in the |
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application if that error or omission is promptly corrected; |
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(2) the fact that the experience documented to the |
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department was insufficient at the time of the previous |
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application; or |
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(3) the department being unable to complete the |
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background investigation required under Section 147.103 because of |
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insufficient information received from a local, state, or federal |
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law enforcement agency. |
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(d) An applicant, a license holder, the spouse of an |
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applicant or license holder, a partner of a limited liability |
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partnership, or any stockholder of a corporation is ineligible for |
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a license until the first anniversary of the date of a final |
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department action on the denial or revocation of a license applied |
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for or issued under this chapter if: |
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(1) the basis of the denial or revocation was that one |
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or more of the controlling persons affiliated with the applicant or |
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license holder was determined by the department to be unsuitable; |
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and |
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(2) that unsuitable controlling person has in fact |
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ceased to be a controlling person of the applicant or license |
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holder. |
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Sec. 147.103. LICENSE REQUIREMENTS. (a) In this section, |
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"good moral character" means a personal history of honesty, |
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trustworthiness, fairness, a good reputation for fair dealing, and |
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respect for the rights of others and for the laws of this state and |
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nation. |
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(b) To be qualified to serve as a controlling person for a |
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non-doctor-of-chiropractic-owned chiropractic clinic under this |
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chapter, the person must be at least 18 years of age, be of good |
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moral character, and have educational, managerial, or business |
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experience relevant to: |
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(1) operation of a business entity offering |
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chiropractic care; or |
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(2) service as a controlling person of a chiropractic |
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care facility. |
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(c) The department shall conduct a thorough background |
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investigation of each applicant to determine whether the applicant |
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is qualified under this chapter. The department may deny an |
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application for the issuance or renewal of a license if it finds |
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that the applicant is not qualified to be a controlling person under |
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this chapter. The investigation must include: |
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(1) the submission of fingerprints for processing |
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through appropriate local, state, and federal law enforcement |
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agencies; and |
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(2) examination by the department of police or other |
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law enforcement records maintained by local, state, or federal law |
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enforcement agencies. |
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(d) Department background investigations are governed by |
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this chapter and by Chapter 53, Occupations Code, and Section |
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411.122, Government Code. Conviction of a crime does not |
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automatically disqualify a controlling person, require the |
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revocation of a license, or require the denial of an application for |
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an original or renewal license. The department shall consider |
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criminal convictions as provided by Chapter 53, Occupations Code, |
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and Section 411.122, Government Code. |
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(e) Each license holder shall maintain a registered agent |
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for the service of process in this state. |
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(f) An applicant for an original or renewal license must |
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demonstrate that the clinic for which the person is applying as a |
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controlling person has a net worth as follows: |
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(1) $50,000 if the clinic employs fewer than five |
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assigned employees; |
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(2) $75,000 if the clinic employs at least five but not |
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more than eight assigned employees; or |
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(3) $100,000 if the clinic employs more than eight |
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assigned employees. |
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(g) The applicant shall demonstrate the net worth of the |
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clinic to the department by providing the department with the |
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applicant's financial statement or a copy of the applicant's most |
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recent federal tax return. The net worth requirement may also be |
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satisfied through guarantees, letters of credit, or other security |
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acceptable to the department. A guaranty is not acceptable under |
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this subsection unless the applicant submits sufficient evidence to |
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satisfy the department that the guarantor has adequate resources to |
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satisfy the obligations of the guaranty. |
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(h) In calculating net worth, an applicant shall include |
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adequate reserves for all taxes and insurance, including reserves |
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for claims incurred but not paid and for claims incurred but not |
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reported under plans of self-insurance for health benefits. The |
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calculation of net worth by an applicant shall be made according to |
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Section 448, Internal Revenue Code of 1986. |
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(i) A document submitted to establish net worth must reflect |
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the net worth as of a date not earlier than six months before the |
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date on which the application is submitted. A document submitted to |
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establish net worth must be prepared or certified by an independent |
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certified public accountant. Information supplied regarding net |
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worth, including copies of federal tax returns, is proprietary and |
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confidential and is exempt from disclosure to third parties, other |
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than to other governmental agencies with a reasonable legitimate |
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purpose for obtaining the information. |
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Sec. 147.104. FEES. (a) Each applicant for an original or |
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renewal license shall pay to the department on the issuance or |
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renewal of the license a fee set by the commission by rule in an |
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amount not to exceed $3,000. |
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(b) The commission may charge reasonable fees for license |
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applications and license renewals, investigations, inspections, |
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and any other administrative or enforcement responsibilities |
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created under this chapter. |
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Sec. 147.105. POSTING OF LICENSES. (a) The commissioner |
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by rule shall determine the form and content of: |
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(1) licenses issued under this chapter; and |
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(2) notices required to be posted under this section. |
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(b) Each license issued under this chapter must be posted in |
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a conspicuous place in the principal place of business in this state |
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of the license holder. Each license holder shall display, in a |
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place that is clear and unobstructed to public view, a notice |
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stating that the business operated at the location is licensed and |
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regulated by the department and that any questions or complaints |
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should be directed to the department. |
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(c) Each license holder issued a |
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non-doctor-of-chiropratric-owned chiropractic clinic license |
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under this chapter shall provide a copy of the license to the board |
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and to each contracting doctor of chiropractic on receipt of the |
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initial license and annually on renewal. |
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Sec. 147.106. LICENSE NOT ASSIGNABLE; CHANGE OF NAME OR |
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LOCATION. (a) A license holder may not conduct business under any |
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name other than that specified in the license. A license issued |
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under this chapter is not assignable. A license holder may not |
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conduct business under any fictitious or assumed name without prior |
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written authorization from the department. The department may not |
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authorize the use of a name that is so similar to that of a public |
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office or agency or to that of another license holder that the |
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public may be confused or misled by its use. A license holder may |
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not conduct business under more than one name unless it has obtained |
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a separate license for each name. |
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(b) A license holder may change its licensed name at any |
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time by notifying the department and paying a fee for each change of |
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name. The commission by rule shall set the fee for a name change in |
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an amount not to exceed $50. A license holder may change its name on |
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renewal of the license without the payment of the name change fee. |
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(c) A license holder must notify the department in writing |
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within 30 days of: |
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(1) any change in the location of its primary business |
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office; |
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(2) the addition of more business offices; or |
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(3) a change in the location of business records |
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maintained by the license holder. |
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Sec. 147.107. RECORDS. Records of patient care and |
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treatment are the sole property of the patient and must be |
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maintained and kept in the custody of the doctor of chiropractic who |
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treats the patient for a period prescribed by the board. |
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[Sections 147.108-147.150 reserved for expansion] |
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SUBCHAPTER D. ADMINISTRATIVE AND CRIMINAL PENALTIES |
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Sec. 147.151. PROHIBITED ACTS; CRIMINAL PENALTY. (a) A |
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person may not: |
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(1) offer chiropractic services without holding a |
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license under this chapter as a non-doctor-of-chiropractic-owned |
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chiropractic clinic; |
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(2) use the name or title "chiropractic clinic" or |
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"chiropractic offices," or any derivation of the term |
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"chiropractic," or otherwise represent that the person is licensed |
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under this chapter unless the person holds a license issued under |
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this chapter; |
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(3) represent as the person's own the license of |
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another location or represent that a facility is licensed if the |
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person does not hold a license; |
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(4) give materially false or forged evidence to the |
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department in connection with obtaining or renewing a license or in |
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connection with disciplinary proceedings under this chapter; or |
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(5) use or attempt to use a license that has expired or |
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been revoked. |
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(b) A person that violates Subsection (a) commits an |
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offense. An offense under this subsection is a Class A misdemeanor. |
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(c) The commissioner may notify the attorney general of a |
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violation, and the attorney general may apply to a district court in |
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Travis County for permission to file suit in the nature of quo |
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warranto or for injunctive relief, or both. The attorney general |
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may not be required to post a bond for injunctive relief. |
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Sec. 147.152. DISCIPLINARY ACTIONS. (a) For purposes of |
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this section, "conviction" includes a plea of nolo contendere or a |
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finding of guilt, regardless of adjudication. |
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(b) Disciplinary action may be taken against a license |
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holder by the department on any of the following grounds: |
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(1) the conviction of a license holder or any |
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controlling person affiliated with a license holder of bribery, |
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fraud, or intentional or material misrepresentation in obtaining, |
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attempting to obtain, or renewing a license; |
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(2) the conviction of a license holder or any |
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controlling person affiliated with a license holder of a crime that |
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relates to the operation of a non-doctor-of-chiropractic-owned |
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chiropractic clinic or the ability of the license holder or |
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controlling person to operate a non-doctor-of-chiropractic-owned |
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chiropractic clinic; |
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(3) the conviction of a license holder or any |
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controlling person affiliated with a license holder of a crime that |
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relates to the classification, misclassification, or |
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underreporting of employees under Subtitle A, Title 5, Labor Code; |
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(4) the conviction of a license holder or any |
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controlling person affiliated with a license holder of a crime that |
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relates to the establishment or maintenance of a self-insurance |
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program, whether health insurance, workers' compensation |
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insurance, or other insurance; |
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(5) the conviction of a license holder or any |
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controlling person affiliated with a license holder of a crime that |
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relates to fraud, deceit, or misconduct in the operation of a staff |
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leasing service; |
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(6) engaging in services of a |
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non-doctor-of-chiropractic-owned chiropractic clinic without a |
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license; |
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(7) transferring or attempting to transfer a license |
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issued under this chapter; |
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(8) violating this chapter or any order or rule issued |
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by the department or commissioner under this chapter; |
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(9) failing to notify the department, in writing, of |
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the felony conviction of any controlling person not later than the |
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30th day after the date on which that conviction is final; |
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(10) failing to cooperate with an investigation, |
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examination, or audit of the license holder's records conducted by |
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the license holder's insurance company or the insurance company's |
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designee, as allowed by the insurance contract or as authorized by |
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the board; |
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(11) failing to notify the department and the board |
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not later than the 30th day after the effective date of any change |
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in ownership, principal business address, or the address of |
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accounts and records; |
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(12) failing to correct any tax filing or payment |
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deficiency within a reasonable time as determined by the |
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commissioner; |
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(13) refusing, after reasonable notice, to meet |
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reasonable health and safety requirements within the license |
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holder's control and made known to the license holder by a federal |
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or state agency; |
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(14) a delinquency in the payment of any taxes or debts |
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owed to this state other than a tax or debt subject to a legitimate |
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dispute; |
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(15) knowingly making a material misrepresentation to |
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an insurance company, the department, or any other governmental |
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agency; or |
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(16) failing to maintain the net worth requirements |
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required under Section 147.103. |
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(c) On a finding that a license holder or applicant has |
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violated one or more provisions of Subsection (b), the department |
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may: |
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(1) deny an application for a license; |
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(2) revoke, restrict, or refuse to renew a license; |
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(3) impose an administrative penalty in an amount not |
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less than $1,000 per violation, but not more than $50,000; |
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(4) issue a reprimand; or |
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(5) place the license holder on probation for a period |
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and subject to conditions that the department specifies. |
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(d) On revocation of a license, the license holder shall |
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immediately return the revoked license to the department and notify |
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all employees, all patients, and the board that the clinic may no |
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longer provide chiropractic care and services. |
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(e) The department may take disciplinary action, deny a |
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license application or renewal, or revoke a license only on a |
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determination that a controlling person is unqualified, after |
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notice to, and an opportunity for a hearing by, the affected |
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applicant, license holder, or controlling person in accordance with |
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Chapter 2001, Government Code. |
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(f) If a license is revoked or renewal is denied, the |
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affected license holder may not request a reinstatement hearing |
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before the first anniversary of the date of revocation or denial. |
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The department may reinstate or renew the license only if the cause |
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of the revocation or denial has been corrected. |
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SECTION 2. Not later than November 1, 2007, the |
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commissioner of licensing and regulation shall adopt rules as |
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required by Section 147.051, Health and Safety Code, as added by |
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this Act. |
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SECTION 3. This Act takes effect September 1, 2007, except |
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that Section 147.101 and Subchapter D, Chapter 147, Health and |
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Safety Code, as added by this Act, take effect January 1, 2008. |