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.