81R24615 YDB-F
 
  By: Truitt, Fletcher H.B. No. 2271
 
  Substitute the following for H.B. No. 2271:
 
  By:  Laubenberg C.S.H.B. No. 2271
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of certain chiropractic clinics;
  providing administrative and criminal penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle G, Title 2, Health and Safety Code, is
  amended by adding Chapter 147 to read as follows:
  CHAPTER 147.  NON-DOCTOR-OF-CHIROPRACTIC-OWNED CHIROPRACTIC
  CLINICS
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 147.001.  DEFINITIONS.  In this chapter:
               (1)  "Applicant" means a person or business seeking to
  be licensed under this chapter or seeking the renewal of a license
  under this chapter.
               (2)  "Board" means the Texas Board of Chiropractic
  Examiners.
               (3)  "Contracting doctor of chiropractic" means a
  person engaged in the practice of chiropractic as described by
  Section 201.002, Occupations Code, who holds a current active
  license to practice chiropractic and who has entered into a
  contractual agreement with a licensed chiropractic clinic owner to
  provide chiropractic care.
               (4)  "Controlling person" means:
                     (A)  an officer or director of a corporation
  seeking a license under this chapter, a shareholder holding 10
  percent or more of the voting stock of a corporation seeking to own
  or operate a non-doctor-of-chiropractic-owned chiropractic clinic,
  or a partner of a partnership seeking to own or operate a
  non-doctor-of-chiropractic-owned chiropractic clinic; or
                     (B)  an individual who possesses, directly or
  indirectly, the power to direct or cause the direction of the
  management or policies of a company that owns and operates a
  non-doctor-of-chiropractic-owned chiropractic clinic through the
  ownership of voting securities, by contract or otherwise.
               (5)  "Doctor of chiropractic" means a person engaged in
  the practice of chiropractic as described by Section 201.002,
  Occupations Code.
               (6)  "License holder" means an individual or entity
  licensed under this chapter who owns or operates a
  non-doctor-of-chiropractic-owned chiropractic clinic.
               (7)  "Non-doctor-of-chiropractic-owned chiropractic
  clinic" means a chiropractic facility licensed under this chapter
  and registered under Section 201.312, Occupations Code.
         Sec. 147.002.  APPLICABILITY. (a) For the purposes of this
  section, "physician" means:
               (1)  an individual licensed to practice medicine in
  this state under Subtitle B, Title 3, Occupations Code;
               (2)  a professional association of physicians licensed
  under Subtitle B, Title 3, Occupations Code, and organized under
  the Texas Professional Association Act (Article 1528f, Vernon's
  Texas Civil Statutes);
               (3)  an approved nonprofit health corporation
  certified under Chapter 162, Occupations Code; or
               (4)  another person wholly owned by physicians and
  engaged in the practice of medicine as permitted by Subtitle B,
  Title 3, Occupations Code.
         (b)  This chapter does not apply to a physician.
  [Sections 147.003-147.050 reserved for expansion]
  SUBCHAPTER B.  POWERS AND DUTIES OF BOARD
         Sec. 147.051.  RULES.  (a)  The board shall adopt rules as
  necessary to administer this chapter in accordance with Chapter
  2001, Government Code.
         (b)  Each license holder is governed and controlled by this
  chapter and the rules adopted by the board.
         Sec. 147.052.  INTERAGENCY COOPERATION.  (a)  Each state
  agency that, in performing duties under other law, affects the
  regulation of non-doctor-of-chiropractic-owned chiropractic
  clinics shall cooperate with the board and other state agencies as
  necessary to fully implement and enforce this chapter.
         (b)  The Texas Department of Insurance, the division of
  workers' compensation of the Texas Department of Insurance, and the
  attorney general's office shall assist in the implementation of
  this chapter and shall provide information to the board on request.
         Sec. 147.053.  USE OF FEES.  A fee collected by the board
  under this chapter shall be used to implement and enforce this
  chapter.
  [Sections 147.054-147.100 reserved for expansion]
  SUBCHAPTER C.  LICENSING
         Sec. 147.101.  LICENSE REQUIRED.  A
  non-doctor-of-chiropractic-owned chiropractic clinic may not allow
  a doctor of chiropractic to engage in or offer chiropractic
  services or chiropractic care at the clinic unless each controlling
  person for the clinic holds a license issued under this chapter.
         Sec. 147.102.  LICENSE APPLICATION.  (a)  Each controlling
  person for a non-doctor-of-chiropractic-owned chiropractic clinic
  that desires an original or renewal
  non-doctor-of-chiropractic-owned chiropractic clinic license
  shall file with the board a written application accompanied by the
  application fee.
         (b)  The board may require an applicant for a license to
  provide information and certifications necessary to determine that
  the applicant meets the licensing requirements of this chapter.  
  The board may also require the applicant to provide information and
  certifications necessary to determine whether individuals
  affiliated with the applicant are qualified to serve as controlling
  persons.
         (c)  An applicant, a license holder, the spouse of an
  applicant or license holder, a partner of a limited liability
  partnership, or any stockholder of a corporation is ineligible for
  a license for two years after the date of a final board action on the
  denial or revocation of a license applied for or issued under this
  chapter.  This restriction does not apply to a denial or revocation
  of a license based on:
               (1)  an inadvertent error or omission in the
  application if that error or omission is promptly corrected;
               (2)  the fact that the experience documented to the
  board was insufficient at the time of the previous application; or
               (3)  the board being unable to complete the background
  investigation required under Section 147.103 because of
  insufficient information received from a local, state, or federal
  law enforcement agency.
         (d)  An applicant, a license holder, the spouse of an
  applicant or license holder, a partner of a limited liability
  partnership, or any stockholder of a corporation is ineligible for
  a license until the first anniversary of the date of a final board
  action on the denial or revocation of a license applied for or
  issued under this chapter if:
               (1)  the basis of the denial or revocation was that one
  or more of the controlling persons affiliated with the applicant or
  license holder was determined by the board to be unsuitable; or
               (2)  a controlling person who is determined to be
  unsuitable under Subdivision (1) has in fact ceased to be a
  controlling person of the applicant or license holder.
         Sec. 147.103.  LICENSE REQUIREMENTS.  (a)  In this section:
               (1)  "Assigned employee" means a full-time employee
  whose normal work week is at least 25 hours per week and whose work
  is performed in this state.  The term does not include an employee
  hired to support or supplement the client's workforce in special
  work situations, such as employee absences.
               (2)  "Good moral character" means a personal history of
  honesty, trustworthiness, fairness, a good reputation for fair
  dealing, and respect for the rights of others and for the laws of
  this state and nation.
         (b)  To be qualified to serve as a controlling person for a
  non-doctor-of-chiropractic-owned chiropractic clinic under this
  chapter, the person must be at least 18 years of age, be of good
  moral character, and have educational, managerial, or business
  experience relevant to:
               (1)  operation of a business entity offering
  chiropractic care;  or
               (2)  service as a controlling person of a chiropractic
  care facility.
         (c)  The board shall conduct a thorough background
  investigation of each applicant to determine whether the applicant
  is qualified under this chapter.  The board may deny an application
  for the issuance or renewal of a license if it finds that the
  applicant is not qualified to be a controlling person under this
  chapter.  The investigation must include:
               (1)  the submission of fingerprints for processing
  through appropriate local, state, and federal law enforcement
  agencies; and
               (2)  examination by the board of police or other law
  enforcement records maintained by local, state, or federal law
  enforcement agencies.
         (d)  Board background investigations are governed by this
  chapter and by Chapter 53, Occupations Code, and Section 411.122,
  Government Code.  Conviction of a crime does not automatically
  disqualify a controlling person, require the revocation of a
  license, or require the denial of an application for an original or
  renewal license.  The board shall consider criminal convictions as
  provided by Chapter 53, Occupations Code, and Section 411.122,
  Government Code.
         (e)  Each license holder shall maintain a registered agent
  for the service of process in this state.
         (f)  An applicant for an original or renewal license must
  demonstrate that the clinic for which the person is applying as a
  controlling person has a net worth as follows:
               (1)  $50,000 if the clinic employs fewer than five
  assigned employees;
               (2)  $75,000 if the clinic employs at least five but not
  more than eight assigned employees; or
               (3)  $100,000 if the clinic employs more than eight
  assigned employees.
         (g)  The applicant shall demonstrate the net worth of the
  clinic to the board by providing the board with the applicant's
  financial statement or a copy of the applicant's most recent
  federal tax return.  The net worth requirement may also be satisfied
  through guarantees, letters of credit, or other security acceptable
  to the board.  A guaranty is not acceptable under this subsection
  unless the applicant submits sufficient evidence to satisfy the
  board that the guarantor has adequate resources to satisfy the
  obligations of the guaranty.
         (h)  In calculating net worth, an applicant shall include
  adequate reserves for all taxes and insurance, including reserves
  for claims incurred but not paid and for claims incurred but not
  reported under plans of self-insurance for health benefits.  The
  calculation of net worth by an applicant shall be made according to
  Section 448, Internal Revenue Code of 1986.
         (i)  A document submitted to establish net worth must reflect
  the net worth as of a date not earlier than six months before the
  date on which the application is submitted.  A document submitted to
  establish net worth must be prepared or certified by an independent
  certified public accountant.  Information supplied regarding net
  worth, including copies of federal tax returns, is proprietary and
  confidential and is exempt from disclosure to third parties, other
  than to other governmental agencies with a reasonable legitimate
  purpose for obtaining the information.
         Sec. 147.104.  FEES.  (a)  Each applicant for an original or
  renewal license shall pay to the board on the issuance or renewal of
  the license a fee set by the board by rule in an amount not to exceed
  $3,000.
         (b)  The board may charge reasonable fees for license
  applications and license renewals, investigations, inspections,
  and any other administrative or enforcement responsibilities
  created under this chapter.
         Sec. 147.105.  POSTING OF LICENSES.  (a)  The board by rule
  shall determine the form and content of:
               (1)  licenses issued under this chapter; and
               (2)  notices required to be posted under this section.
         (b)  Each license issued under this chapter must be posted in
  a conspicuous place in the principal place of business in this state
  of the license holder.  Each license holder shall display, in a
  place that is clear and unobstructed to public view, a notice
  stating that the business operated at the location is licensed and
  regulated by the board and that any questions or complaints should
  be directed to the board.
         (c)  Each license holder issued a
  non-doctor-of-chiropratric-owned chiropractic clinic license
  under this chapter shall provide a copy of the license to the board
  and to each contracting doctor of chiropractic on receipt of the
  initial license and annually on renewal.
         Sec. 147.106.  LICENSE NOT ASSIGNABLE; CHANGE OF NAME OR
  LOCATION.  (a)  A license holder may not conduct business under any
  name other than that specified in the license.  A license issued
  under this chapter is not assignable.  A license holder may not
  conduct business under any fictitious or assumed name without prior
  written authorization from the board.  The board may not authorize
  the use of a name that is so similar to that of a public office or
  agency or to that of another license holder that the public may be
  confused or misled by its use.  A license holder may not conduct
  business under more than one name unless it has obtained a separate
  license for each name.
         (b)  A license holder may change its licensed name at any
  time by notifying the board and paying a fee for each change of
  name.  The board by rule shall set the fee for a name change in an
  amount not to exceed $50.  A license holder may change its name on
  renewal of the license without the payment of the name change fee.
         (c)  A license holder must notify the board in writing within
  30 days of:
               (1)  any change in the location of its primary business
  office;
               (2)  the addition of more business offices; or
               (3)  a change in the location of business records
  maintained by the license holder.
         Sec. 147.107.  RECORDS.  Records of patient care and
  treatment are the sole property of the patient and must be
  maintained and kept in the custody of the doctor of chiropractic who
  treats the patient for a period prescribed by the board.
  [Sections 147.108-147.150 reserved for expansion]
  SUBCHAPTER D.  ADMINISTRATIVE AND CRIMINAL PENALTIES
         Sec. 147.151.  PROHIBITED ACTS; CRIMINAL PENALTY.  (a)  A
  person may not:
               (1)  offer chiropractic services without holding a
  license under this chapter as a non-doctor-of-chiropractic-owned
  chiropractic clinic;
               (2)  use the name or title "chiropractic clinic" or 
  "chiropractic offices," or any derivation of the term
  "chiropractic," or otherwise represent that the person is licensed
  under this chapter unless the person holds a license issued under
  this chapter;
               (3)  represent as the person's own the license of
  another location or represent that a facility is licensed if the
  person does not hold a license;
               (4)  give materially false or forged evidence to the
  board in connection with obtaining or renewing a license or in
  connection with disciplinary proceedings under this chapter; or
               (5)  use or attempt to use a license that has expired or
  been revoked.
         (b)  A person that violates Subsection (a) commits an
  offense.  An offense under this subsection is a Class A misdemeanor.
         (c)  The board may notify the attorney general of a
  violation, and the attorney general may apply to a district court in
  Travis County for permission to file suit in the nature of quo
  warranto or for injunctive relief, or both.  The attorney general
  may not be required to post a bond for injunctive relief.
         Sec. 147.152.  DISCIPLINARY ACTIONS.  (a)  For purposes of
  this section, "conviction" includes a plea of nolo contendere or a
  finding of guilt, regardless of adjudication.
         (b)  Disciplinary action may be taken against a license
  holder by the board on any of the following grounds:
               (1)  the conviction of a license holder or any
  controlling person affiliated with a license holder of bribery,
  fraud, or intentional or material misrepresentation in obtaining,
  attempting to obtain, or renewing a license;
               (2)  the conviction of a license holder or any
  controlling person affiliated with a license holder of a crime that
  relates to the operation of a non-doctor-of-chiropractic-owned
  chiropractic clinic or the ability of the license holder or
  controlling person to operate a non-doctor-of-chiropractic-owned
  chiropractic clinic;
               (3)  the conviction of a license holder or any
  controlling person affiliated with a license holder of a crime that
  relates to the classification, misclassification, or
  underreporting of employees under Subtitle A, Title 5, Labor Code;
               (4)  the conviction of a license holder or any
  controlling person affiliated with a license holder of a crime that
  relates to the establishment or maintenance of a self-insurance
  program, whether health insurance, workers' compensation
  insurance, or other insurance;
               (5)  the conviction of a license holder or any
  controlling person affiliated with a license holder of a crime that
  relates to fraud, deceit, or misconduct in the operation of a
  non-doctor-of-chiropractic-owned chiropractic clinic;
               (6)  engaging in services of a
  non-doctor-of-chiropractic-owned chiropractic clinic without a
  license;
               (7)  transferring or attempting to transfer a license
  issued under this chapter;
               (8)  violating this chapter or any order or rule issued
  by the board under this chapter;
               (9)  failing to notify the board, in writing, of the
  felony conviction of any controlling person not later than the 30th
  day after the date on which that conviction is final;
               (10)  failing to cooperate with an investigation,
  examination, or audit of the license holder's records conducted by
  the license holder's insurance company or the insurance company's
  designee, as allowed by the insurance contract or as authorized by
  the board;
               (11)  failing to notify the board not later than the
  30th day after the effective date of the change of any change in
  ownership, principal business address, or the address of accounts
  and records;
               (12)  failing to correct any tax filing or payment
  deficiency within a reasonable time as determined by the board;
               (13)  refusing, after reasonable notice, to meet
  reasonable health and safety requirements within the license
  holder's control and made known to the license holder by a federal
  or state agency;
               (14)  a delinquency in the payment of any taxes or debts
  owed to this state other than a tax or debt subject to a legitimate
  dispute;
               (15)  knowingly making a material misrepresentation to
  an insurance company, the board, or any other governmental agency; 
  or
               (16)  failing to maintain the net worth requirements
  required under Section 147.103.
         (c)  On a finding that a license holder or applicant has
  violated one or more provisions of Subsection (b), the board may:
               (1)  deny an application for a license;
               (2)  revoke, restrict, or refuse to renew a license;
               (3)  impose an administrative penalty in an amount not
  less than $1,000 per violation, but not more than $50,000;
               (4)  issue a reprimand; or
               (5)  place the license holder on probation for a period
  and subject to conditions that the board specifies.
         (d)  On revocation of a license, the license holder shall
  immediately return the revoked license to the board and notify all
  employees, all patients, and the board that the clinic may no longer
  provide chiropractic care and services.
         (e)  The board may take disciplinary action, deny a license
  application or renewal, or revoke a license only on a determination
  that a controlling person is unqualified, after notice to, and an
  opportunity for a hearing by, the affected applicant, license
  holder, or controlling person in accordance with Chapter 2001,
  Government Code.
         (f)  If a license is revoked or renewal is denied, the
  affected license holder may not request a reinstatement hearing
  before the first anniversary of the date of revocation or denial.  
  The board may reinstate or renew the license only if the cause of
  the revocation or denial has been corrected.
         SECTION 2.  Not later than November 1, 2009, the Texas Board
  of Chiropractic Examiners shall adopt rules as required by Section
  147.051, Health and Safety Code, as added by this Act.
         SECTION 3.  This Act takes effect September 1, 2009, except
  that Section 147.101 and Subchapter D, Chapter 147, Health and
  Safety Code, as added by this Act, take effect January 1, 2010.