89R3057 CMO-F
By: Hinojosa of Hidalgo S.B. No. 613
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of the practice of veterinary medicine;
increasing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 801.002, Occupations Code, is amended by
amending Subdivisions (1) and (1-a) and adding Subdivisions (1-b)
and (1-c) to read as follows:
(1) "Affiliate" means a legal entity that directly or
indirectly controls, is controlled by, or is under common control
with another legal entity or that shares common branding with
another legal entity by means of:
(A) the ownership of, or the power to vote, more
than 25 percent of the outstanding shares or participation shares
of any class of voting security of a legal entity;
(B) the power to control in any manner the
election of a majority of the directors of, or individuals
exercising similar functions with respect to, a legal entity; or
(C) the power to exercise in any manner a
controlling influence over the management or policies of a legal
entity, including by ownership of equity or securities or by
contract.
(1-a) "Board" means the State Board of Veterinary
Medical Examiners.
(1-b) "Business entity" means an entity recognized by
law through which business for profit is conducted, including:
(A) a private equity firm, service management
organization, sole proprietorship, corporation, limited or general
partnership, limited liability company, limited liability
partnership, business trust, investment asset manager, real estate
investment trust, joint venture, joint stock company, holding
company, receivership, firm, organization, estate, association, or
other entity or successor in interest recognized by law through
which business for profit is conducted; and
(B) a wholly owned subsidiary, majority-owned
subsidiary, parent company, or affiliate of an entity or
association described by Paragraph (A).
(1-c) [(1-a)] "Certified veterinary assistant" means
a person who has been certified as a certified veterinary assistant
by the Texas Veterinary Medical Association and is employed by a
licensed veterinarian.
SECTION 2. Section 801.352, Occupations Code, is amended by
amending Subsection (a) and adding Subsections (c-1) and (e) to
read as follows:
(a) The professional services of a veterinarian may not be
controlled or exploited, including by contract, by a person who:
(1) is not a veterinarian; and
(2) intervenes between the veterinarian and the
veterinarian's client.
(c-1) Unless each owner, partner, or shareholder, as
appropriate, of a business entity holds a license to practice
veterinary medicine issued under this chapter:
(1) for purposes of Subsection (a), the business
entity is considered a person who is not a veterinarian; and
(2) for purposes of Subsections (b) and (c), the
business entity is considered a person who does not hold a license
to practice veterinary medicine.
(e) For purposes of this section:
(1) conduct prohibited by Section 801.506(b) is
considered to be an intervention with respect to a veterinarian's
practice of veterinary medicine; and
(2) a contract or other arrangement between a
veterinarian and another person that provides the person with a
controlling influence over the veterinarian's practice of
veterinary medicine, including by authorizing any conduct
prohibited by Section 801.506(b), is considered to be submission to
interference with the practice of veterinary medicine.
SECTION 3. Subchapter H, Chapter 801, Occupations Code, is
amended by adding Section 801.3525 to read as follows:
Sec. 801.3525. CERTAIN CONTRACTS AND CONTRACT PROVISIONS
PROHIBITED. (a) A contract between a veterinarian and a private
equity firm, or a person owned or controlled in any manner or to any
extent by a private equity firm, that involves either the
furnishing of business or management services to the veterinarian
or the purchase of property related to the veterinarian's practice
may not include a provision that prohibits the veterinarian from:
(1) competing with another veterinarian in which the
private equity firm or person has a financial interest; or
(2) disparaging or commenting on any issues involving
the quality of care, utilization of care, ethical or professional
standards or guidelines, or revenue-increasing strategies employed
or influenced by the private equity firm or person.
(b) A contract provision described by Subsection (a) is
void.
(c) A veterinarian may not enter into a contract described
by Section 801.506(b)(15) with a private equity firm or a person
owned or controlled in any manner or to any extent by a private
equity firm. A contract described by this subsection is void.
SECTION 4. Section 801.354, Occupations Code, is amended to
read as follows:
Sec. 801.354. AUTHORIZED BUSINESS PRACTICES. (a) It is not
a violation of this chapter for a veterinarian, or a business entity
authorized under this chapter to render veterinary services, to, in
connection with providing veterinary services:
(1) lease space for the purpose of providing
veterinary services;
(2) pay for franchise fees [or other services] on a
percentage-of-receipts basis; [or]
(3) sell, transfer, or assign accounts receivable to a
lending institution;
(4) repair, renovate, or replace any facility,
information system, or medical equipment owned or leased by the
veterinarian or business entity;
(5) provide accounting, financial planning, payroll,
bookkeeping, budget, investment, billing and collection, tax
compliance, or similar financial services;
(6) provide clerical, reception, secretarial,
messaging, scheduling, boarding, cleaning, or similar services;
(7) provide advertising, marketing, or public
relations services in compliance with rules adopted by the board;
(8) provide contract negotiation, drafting, or
similar legal services;
(9) assist in recruiting, training, including
continuing education, or legal and logistical peer review services;
or
(10) provide insurance, purchasing, or claims
services.
(b) The payment or receipt of consideration for services
described by Subsection (a) that is based on a percentage of gross
revenue, or a similar type of contract, is not a violation of this
chapter if the consideration is commensurate with:
(1) the value of the services provided; or
(2) the fair rental value of any space leased or
provided.
SECTION 5. Section 801.402, Occupations Code, is amended to
read as follows:
Sec. 801.402. GENERAL GROUNDS FOR LICENSE DENIAL OR
DISCIPLINARY ACTION. A person is subject to denial of a license or
to disciplinary action under Section 801.401 if the person:
(1) presents to the board dishonest or fraudulent
evidence of the person's qualifications;
(2) commits fraud or deception in the examination
process or to obtain a license;
(3) is chronically or habitually intoxicated,
chemically dependent, or addicted to drugs;
(4) engages in dishonest or illegal practices in, or
connected with, the practice of veterinary medicine or the practice
of equine dentistry;
(5) is convicted of a felony under the laws of this
state, another state, or the United States;
(6) engages in practices or conduct that violates this
chapter, a rule adopted by the board, or the board's rules of
professional conduct;
(7) permits another to use the person's license to
practice veterinary medicine or to practice equine dentistry in
this state;
(8) fraudulently issues a health certificate,
vaccination certificate, test chart, or other form used in the
practice of veterinary medicine or the practice of equine dentistry
that relates to the presence or absence of animal disease;
(9) issues a false certificate relating to the sale
for human consumption of inedible animal products;
(10) commits fraud in connection with the application
or reporting of a test of animal disease;
(11) pays or receives a kickback, rebate, bonus, or
other remuneration for treating an animal or for referring a client
to another provider of veterinary or equine dental services or
goods;
(12) performs or prescribes unnecessary or
unauthorized treatment;
(13) orders a prescription drug or controlled
substance for the treatment of an animal without first establishing
a veterinarian-client-patient relationship;
(14) refuses to admit a board representative to
inspect the person's client and patient records and business
premises during regular business hours;
(15) fails to keep the person's equipment and business
premises in a sanitary condition;
(16) commits gross malpractice or a pattern of acts
that indicate consistent malpractice, negligence, or incompetence
in the practice of veterinary medicine or the practice of equine
dentistry;
(17) is subject to disciplinary action in another
jurisdiction, including the suspension, probation, or revocation
of a license to practice veterinary medicine or to practice equine
dentistry issued by another jurisdiction;
(18) is convicted for an offense under Section 42.09,
42.091, or 42.092, Penal Code;
(19) represents the person as a veterinarian without a
license issued under this chapter;
(20) practices veterinary medicine or assists in the
practice of veterinary medicine without a license issued under this
chapter, including by directly or indirectly aiding or abetting an
unlicensed person in connection with the practice of veterinary
medicine without the appropriate license; or
(21) violates Section 801.353 or a rule adopted by the
board related to confidentiality.
SECTION 6. Section 801.502, Occupations Code, is amended by
adding Subsections (c) and (d) to read as follows:
(c) Violation of an injunction issued under this section may
be punished as contempt. Instead of the fine authorized by Section
21.002(b), Government Code, the punishment for contempt under this
section is a fine of not more than $1,000 for each day the violation
of the injunction continues.
(d) A district or county attorney who prevails in an action
brought under this section may recover reasonable attorney's fees
and court costs.
SECTION 7. Section 801.503, Occupations Code, is amended by
amending Subsections (a) and (b) and adding Subsections (c) and (d)
to read as follows:
(a) A person not licensed under this chapter, including a
corporation, organization, business trust, estate, trust,
partnership, association, or other legal entity, who violates this
chapter or a rule adopted by the board under this chapter is subject
to a civil penalty of $5,000 [$1,000] for each day of violation.
(b) The attorney general or a district or county attorney
may bring an action to recover a civil penalty authorized by this
section. At the request of the board, the attorney general shall
bring the [an] action [to recover a civil penalty authorized by this
section].
(c) The venue provisions of Section 801.502(b) apply to an
action brought against a person subject to the civil penalty under
this section.
(d) A district or county attorney who prevails in an action
brought under this section may recover reasonable attorney's fees
and court costs.
SECTION 8. Section 801.504(a), Occupations Code, is amended
to read as follows:
(a) A person, including an entity, commits an offense if the
person violates this chapter or a rule adopted by the board under
this chapter.
SECTION 9. Subchapter K, Chapter 801, Occupations Code, is
amended by adding Section 801.5045 to read as follows:
Sec. 801.5045. DUTY TO PROVIDE EVIDENCE OF CRIMINAL
OFFENSE. Notwithstanding Section 801.207, the board shall provide
to the appropriate prosecuting attorney a copy of any evidence in
the board's possession of an offense under Section 801.504.
SECTION 10. Sections 801.506(a) and (b), Occupations Code,
are amended to read as follows:
(a) A business entity [sole proprietorship, partnership, or
corporation] may not engage in veterinary medicine unless each
[the] owner, [each] partner, [or each] shareholder, director, or
officer, as appropriate, holds a license to practice veterinary
medicine issued under this chapter.
(b) A business entity [corporation, organization, business
trust, estate, trust, partnership, association, or other legal
entity] not owned exclusively by one or more persons licensed to
practice veterinary medicine under this chapter may not:
(1) engage in veterinary medicine;
(2) employ a veterinarian to practice veterinary
medicine;
(3) determine the compensation of a veterinarian for
the practice of veterinary medicine;
(4) determine the fees or other amounts to be charged
by a veterinarian for the veterinarian's practice of veterinary
medicine;
(5) determine the number of patients a veterinarian
may see in a specified time or the number of hours a veterinarian
may work;
(6) determine the amount of time a veterinarian may
spend with a patient;
(7) own a drug, biologic, anesthetic, apparatus, or
other therapeutic or diagnostic substance or technique used in the
practice of veterinary medicine, unless owned in compliance with
applicable state or federal law;
(8) own or otherwise determine the content of patient
and business records of a veterinarian in violation of Section
801.355(f);
(9) mandate compliance with specific professional
standards, protocols, or practice guidelines relating to the
practice of veterinary medicine;
(10) place limitations or conditions on
communications the subject of which are primarily clinical between
a veterinarian and the veterinarian's clients;
(11) require a veterinarian to make a referral to
another provider of veterinary or equine dental services or goods
in violation of Section 801.402;
(12) reduce or delay any financial benefit owed to or
institute any adverse change to the working conditions of a
veterinarian in response to the veterinarian reporting a violation
of a law regulating the practice of veterinary medicine;
(13) require a veterinarian to violate Section 801.353
or a rule adopted by the board related to the confidential
relationship between the veterinarian and the veterinarian's
client;
(14) determine the coding and billing procedures for
the veterinarian's practice of veterinary medicine;
(15) enter into a contract with a veterinarian to
provide business or management services in exchange for a
percentage of revenue received directly or indirectly from:
(A) the performance of a veterinary service by
the veterinarian;
(B) the collection of the veterinarian's
accounts receivable; or
(C) fees or other amounts to be charged by the
veterinarian or passed through by the veterinarian directly or
indirectly to a client or insurer covering veterinary services;
(16) set conditions under which a veterinarian is
legally obligated to enter into a contract with a vendor or insurer;
(17) set conditions under which a veterinarian is
legally obligated to enter into a contract with another
veterinarian for the delivery of care; or
(18) exercise control over, exploit, be delegated the
power to approve, intervene in, or interfere with, a
veterinarian's:
(A) selection or use of a type or quality of
medical supplies, medical equipment, or pharmaceuticals in the
practice of veterinary medicine;
(B) professional medical judgment regarding the
health of an animal patient; or
(C) practice of veterinary medicine.
SECTION 11. Chapter 801, Occupations Code, as amended by
this Act, applies only to a contract entered into or renewed on or
after the effective date of this Act. A contract entered into or
renewed before the effective date of this Act is governed by the law
in effect on the date the contract was entered into or renewed, and
the former law is continued in effect for that purpose.
SECTION 12. Chapter 801, Occupations Code, as amended by
this Act, applies only to conduct that occurs on or after the
effective date of this Act. Conduct that occurs before the
effective date of this Act is governed by the law in effect on the
date the conduct occurred, and the former law is continued in effect
for that purpose.
SECTION 13. This Act takes effect September 1, 2025.