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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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creating an offense and providing civil 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 C, Title 3, Occupations Code, is |
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amended by adding Chapter 207 to read as follows: |
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CHAPTER 207. NON-DOCTOR-OF-CHIROPRACTIC-OWNED CHIROPRACTIC |
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CLINICS |
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Sec. 207.001. 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) "Chiropractic care records" means records of |
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patient treatment and care maintained by date of service. |
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Chiropractic care records are the sole property of the patient and |
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must be maintained and in the custody of the doctor of chiropractic |
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providing the services for the period prescribed by the Texas Board |
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of Chiropractic Examiners. |
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(4) "Commission" means the Texas Commission of |
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Licensing and Regulation. |
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(5) "Commissioner" means the commissioner of |
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licensing and regulation. |
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(6) "Contracted doctor of chiropractic" means any |
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doctor of chiropractic as defined in Section 201.002(b) who holds a |
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current active license to practice chiropractic and who has entered |
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into a contractual agreement with a licensed chiropractic clinic |
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owner to provide chiropractic care. |
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(7) "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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(8) "Department" means the Texas Department of |
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Licensing and Regulation. |
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(9) "Doctor of chiropractic" has the meaning assigned |
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by Section 201.002(b). |
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(10) "Independent contractor" means a person other |
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than a doctor of chiropractic who contracts to perform work or |
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provide a service for the benefit of another and who: |
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(A) is paid by the job, not by the hour or on some |
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other time-measured basis; |
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(B) is free to hire as many helpers as the person |
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desires and to determine what each helper will be paid; and |
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(C) is free to work for other contractors, or to |
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send helpers to work for other contractors, while under contract to |
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the hiring employer. |
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(11) "Licensee" means a person or entity licensed |
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under this chapter who owns or operates a |
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non-doctor-of-chiropractic-owned chiropractic clinic. |
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(12) "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. |
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(13) "Patient" means a person seeking and receiving |
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chiropractic care or services. |
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(14) "Person" means an individual, association, |
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corporation, organization, government or governmental subdivision |
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or agency, business trust, estate trust, joint venture, |
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partnership, or other legal entity. |
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(15) "Public company" means a corporation whose shares |
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are listed on the New York Stock Exchange and that has total assets |
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that exceed $1 billion. |
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Sec. 207.002. RULES; INTERAGENCY COOPERATION. (a) The |
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commissioner shall adopt rules as necessary to administer this Act. |
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(b) Rules shall be adopted in compliance with Chapter 2001, |
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Government Code. |
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(c) Each licensee is governed and controlled by this chapter |
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and the rules adopted by the commissioner. |
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(d) Notwithstanding any other provision of this chapter, |
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nothing in this chapter preempts the existing statutory or |
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rulemaking authority of any other state agency or entity to |
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regulate non-doctor-of-chiropractic-owned chiropractic clinics in |
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a manner that is consistent with the statutory authority of that |
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state agency or entity. |
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(e) Each state agency that, in performing duties under other |
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law, affects the regulation of non-doctor-of-chiropractic-owned |
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chiropractic clinics shall cooperate with the department, the |
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commissioner, and other state agencies as necessary to fully |
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implement and enforce this chapter. In particular, the board, the |
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Texas Department of Insurance, the division of workers' |
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compensation of the Texas Department of Insurance, and the attorney |
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general's office shall assist in the implementation of this chapter |
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and shall provide information to the department on request. |
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Sec. 207.003. LICENSE REQUIRED; APPLICATION. (a) A |
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non-doctor-of-chiropractic-owned clinic may not allow a licensed |
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doctor of chiropractic to engage in or offer chiropractic services |
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or chiropractic care in this state without holding a license issued |
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under this chapter. |
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(b) Each non-doctor-of-chiropractic-owned clinic that |
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desires an original or renewal non-doctor-of-chiropractic-owned |
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chiropractic clinic license shall file with the department a |
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written application accompanied by the application fee. |
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(c) 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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(d) An applicant, a licensee, a spouse of an applicant or |
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licensee, a partner of an LLP, or any stockholder of a corporation |
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is ineligible for a license for two years after the date of 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. This restriction does not apply |
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to a denial or revocation of a license if the basis of the action |
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was: |
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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 experience documented to the department was |
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insufficient at the time of the previous application; or |
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(3) the department was unable to complete the criminal |
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background investigation required under Section 207.004 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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(e) An applicant, a licensee, a spouse of an applicant or |
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licensee, a partner of an LLP, or any stockholder of a corporation |
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is ineligible for a license for one year after the date of 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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licensee was determined by the department to be unsuitable; or |
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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 licensee. |
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Sec. 207.004. LICENSE REQUIREMENTS. (a) To be qualified to |
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serve as a controlling person of a licensee under this chapter, that |
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person must be at least 18 years of age, be of good moral character, |
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and have educational, managerial, or business experience relevant |
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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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(b) For the purposes of this section, "good moral character" |
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means a personal history of honesty, trustworthiness, fairness, a |
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good reputation for fair dealing, and respect for the rights of |
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others and for the laws of this state and nation. |
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(c) The department shall conduct a thorough background |
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investigation of each individual applicant and of each controlling |
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person of each applicant to determine whether that applicant or |
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controlling person is qualified under this chapter. The department |
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may deny an application for the issuance or renewal of a license if |
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it finds that a controlling person is not qualified under this |
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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 of this code and Section 411.122, |
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Government Code. Conviction of a crime does not automatically |
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disqualify a controlling person, require the revocation of a |
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license, or require the denial of an application for a new or |
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renewed license. The department shall consider criminal |
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convictions as provided by Chapter 53 of this code and Section |
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411.122, Government Code. |
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(e) Each licensee shall maintain a registered agent for the |
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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 a net worth as follows: |
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(1) $50,000 if the applicant employs fewer than five |
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assigned employees; |
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(2) $75,000 if the applicant employs at least five but |
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not more than eight assigned employees; or |
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(3) $100,000 if the applicant employs more than eight |
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assigned employees. |
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(g) For purposes of Subsection (f), "assigned employee" |
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means a full-time employee whose normal work week is at least 25 |
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hours per week and whose work is performed in this state. The term |
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does not include an employee hired to support or supplement the |
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client's workforce in special work situations, such as employee |
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absences. |
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(h) The applicant shall demonstrate net worth to the |
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department by providing the department with the applicant's |
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financial statement or a copy of the applicant's most recent |
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federal tax return. The net worth requirement may also be satisfied |
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through guarantees, letters of credit, or other security acceptable |
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to the department. A guaranty is not acceptable to satisfy this |
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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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(i) 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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(j) 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. 207.005. FEES. (a) Each applicant for an original or |
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renewal license shall pay to the department on the issuance of the |
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license or license renewal 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 is authorized to charge reasonable fees |
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for license applications and renewals, investigations, |
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inspections, and any other administrative or enforcement |
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responsibilities created under this chapter. |
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Sec. 207.006. WORKERS' COMPENSATION INSURANCE. A licensee |
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may elect to obtain workers' compensation insurance coverage for |
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its assigned employees through an insurance company as defined |
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under Section 401.011, Labor Code, or through self-insurance as |
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provided under Chapter 407, Labor Code. |
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Sec. 207.007. UNEMPLOYMENT TAXES; PAYROLL. A licensee is |
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the employer of an assigned employee for purposes of Subtitle A, |
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Title 4, Labor Code. In addition to any other reports required to |
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be filed by law, a licensee shall report quarterly to the Texas |
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Workforce Commission the name, address, telephone number, federal |
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income tax identification number, and classification code as |
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described in the Standard Industrial Classification Manual as |
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published by the United States Office of Management and Budget of |
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each client company on a form prescribed by the Texas Workforce |
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Commission. |
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Sec. 207.008. POSTING OF LICENSES. (a) The commissioner by |
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rule shall determine the form and content of: |
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(1) the 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 licensee. Each licensee shall display, in a place that is |
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clear and unobstructed public view, a notice stating that the |
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business operated at the location is licensed and regulated by the |
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department and that any questions or complaints should be directed |
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to the department. |
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(c) Each licensee issued a |
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non-doctor-of-chiropratric-owned chiropractic clinic license |
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under this chapter must provide a copy of that license to the board |
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and to any and all contracting doctors of chiropractic upon receipt |
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of the initial license and annually upon renewal. |
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Sec. 207.009. LICENSE NOT ASSIGNABLE; CHANGES OF NAME OR |
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LOCATION. (a) A licensee may not conduct business under any name |
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other than that specified in the license. A license issued under |
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this chapter is not assignable. A licensee may not conduct business |
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under any fictitious or assumed name without prior written |
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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 licensee that the public may |
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be confused or misled by its use. A licensee may not conduct |
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business under more than one name unless it has obtained a separate |
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license for each name. |
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(b) A licensee may change its licensed name at any time by |
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notifying the department and paying a fee for each change of name. |
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The commission by rule shall set the fee for a name change in an |
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amount not to exceed $50. A licensee may change its name on renewal |
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of the license without the payment of the name change fee. |
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(c) A licensee must notify the department in writing within |
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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 licensee. |
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Sec. 207.010. 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 Act 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," |
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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 its own the license of another |
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location or represent that a facility is licensed if the person does |
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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. 207.011. 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 licensee by |
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the department on any of the following grounds: |
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(1) the conviction of a licensee or any controlling |
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person of a licensee of bribery, fraud, or intentional or material |
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misrepresentation in obtaining, attempting to obtain, or renewing a |
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license; |
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(2) the conviction of a licensee or any controlling |
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person of a licensee of a crime that relates to the operation of a |
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non-doctor-of-chiropractic-owned chiropractic clinic or the |
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ability of the licensee or any controlling person of a licensee to |
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operate a non-doctor-of-chiropractic-owned chiropractic clinic; |
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(3) the conviction of a licensee or any controlling |
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person of a licensee of a crime that relates to the classification, |
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misclassification, or underreporting of employees under Subtitle |
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A, Title 5, Labor Code; |
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(4) the conviction of a licensee or any controlling |
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person of a licensee of a crime that relates to the establishment or |
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maintenance of a self-insurance program, whether health insurance, |
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workers' compensation insurance, or other insurance; |
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(5) the conviction of a licensee or any controlling |
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person of a licensee of a crime that relates to fraud, deceit, or |
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misconduct in the operation of a staff 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 licensee's records conducted by the |
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licensee's insurance company or the insurance company's designee, |
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as allowed by the insurance contract or as authorized by law by the |
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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 the change |
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of any change in ownership, principal business address, or the |
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address of accounts and records; |
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(12) failing to correct any tax filings or payment |
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deficiencies 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 licensee's |
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control and made known to the licensee by a federal or state agency; |
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(14) a delinquency in the payment of any taxes or debts |
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owed to the State of Texas other than those 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, or to the department or 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 207.004. |
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(c) On a finding that a licensee has violated one or more |
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provisions of Subsection (b), the department 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 licensee on probation for the period and |
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subject to conditions that the department specifies. |
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(d) On revocation of a license, the licensee 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) Disciplinary action may be taken, a denial of an |
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application for a new or renewal license or a revocation of a |
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license may be done, or a determination that a controlling person is |
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unqualified may be made by the department only subject to Chapter |
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2001, Government Code, with notice to, and an opportunity for a |
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hearing by, the affected applicant, licensee, or controlling |
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person. |
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(f) If a license is revoked or renewal is denied, the |
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affected licensee may request a reinstatement hearing after a |
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minimum of one year. The department may reinstate or renew the |
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license only if the cause of the nonrenewal or revocation has been |
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corrected. |
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Sec. 207.012. FEES USED FOR ADMINISTRATION. All fees |
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collected by the department under this chapter shall be used to |
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implement this chapter. |
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Sec. 207.013. EFFECT OF OTHER LAW. This chapter does not |
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exempt any assigned employee of a licensee from any other license |
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requirements imposed under local, state, or federal law. |
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SECTION 2. A person is not required to hold a license under |
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this Act to operate a non-doctor-of-chiropractic-owned |
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chiropractic clinic until January 1, 2008. |
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SECTION 3. This Act takes effect September 1, 2007. |