Bill Text: OR SB230 | 2011 | Regular Session | Introduced
Bill Title: Relating to professional corporations organized to provide health care services; declaring an emergency.
Sponsorship: Unknown
Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB230 Detail]
Download: Oregon-2011-SB230-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2839
Senate Bill 230
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Committee on
Health Care)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Expands purposes for which professional corporation may be
organized to include professional corporation to practice health
care services. Provides that professional corporation to provide
health care services may consist of professional corporation
organized for purpose of practicing medicine or professional
corporation organized for purpose of practicing dentistry.
Specifies requirements for holding shares and governing
professional corporation organized to provide health care
services.
Becomes operative on January 12, 2012.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to professional corporations organized to provide health
care services; creating new provisions; amending ORS 58.015,
58.375, 58.377, 58.379, 58.381, 58.383, 58.385, 58.387, 58.389
and 679.020; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 58.015 is amended to read:
58.015. As used in this chapter { - , unless the context
requires otherwise - } :
(1) 'Foreign professional corporation' means a professional
corporation organized under laws other than the laws of this
state.
{ + (2) 'Health care practitioner licensing authority' means
the Oregon Medical Board or the Oregon Board of Dentistry. + }
{ - (2) - } { + (3) + } 'License' { - includes - } { +
means + } a license, certificate of registration, permit or other
legal authorization required by law as a condition precedent to
{ - the - } rendering { - of - } professional service or
services within this state.
{ + (4) 'Licensed health care practitioner' means a
physician, as defined in ORS 677.010, who holds a license to
practice medicine issued by the Oregon Medical Board under ORS
chapter 677 or a dentist, as defined in ORS 679.010, who holds a
license to practice dentistry issued by the Oregon Board of
Dentistry under ORS chapter 679. + }
{ - (3) - } { + (5) + } 'Oregon Business Corporation Act'
has the same meaning given that term in ORS 60.951.
{ - (4) 'Practicing medicine' has the meaning given that term
in ORS 677.085. - }
{ - (5) - } { + (6) + } 'Professional' means:
(a) Accountants licensed under ORS 673.010 to 673.457 or the
laws of another state;
(b) Architects licensed under ORS 671.010 to 671.220 or the
laws of another state;
(c) Attorneys licensed under ORS 9.005 to 9.755 or the laws of
another state;
(d) Chiropractors licensed under ORS chapter 684 or the laws of
another state;
(e) Dentists licensed under ORS chapter 679 or the laws of
another state;
(f) Landscape architects licensed under ORS 671.310 to 671.459
or the laws of another state;
(g) Naturopaths licensed under ORS chapter 685 or the laws of
another state;
(h) Nurse practitioners licensed under ORS 678.010 to 678.410
or the laws of another state;
(i) Psychologists licensed under ORS 675.010 to 675.150 or the
laws of another state;
(j) Physicians licensed under ORS chapter 677 or the laws of
another state;
(k) Podiatrists licensed under ORS chapter 677 or the laws of
another state;
(L) Medical imaging licensees under ORS 688.405 to 688.605 or
the laws of another state;
(m) Real estate appraisers licensed or certified under ORS
chapter 674 or the laws of another state; and
(n) Other persons providing to the public types of personal
service or services substantially similar to those listed in
paragraphs (a) to (m) of this subsection that may be lawfully
rendered only pursuant to a license.
{ - (6) - } { + (7) + } 'Professional corporation' or
'domestic professional corporation' means a corporation organized
under this chapter for the specific purpose of rendering
professional service or services and for { - such - } other
purposes provided under this chapter.
{ - (7) - } { + (8) + } 'Professional service' means
personal service or services rendered in this state to the public
which may be lawfully rendered only pursuant to a license by a
professional.
{ + (9) 'Provide health care services' means to practice
medicine, as described in ORS 677.085, or to practice dentistry,
as defined in ORS 679.010. + }
{ - (8) - } { + (10) + } 'Regulatory board' means the
governmental agency of the State of Oregon required or authorized
by law to license and regulate the rendering of a professional
service or services for which a professional corporation is
organized.
SECTION 2. { + Section 3 of this 2011 Act is added to and made
a part of ORS chapter 58. + }
SECTION 3. { + (1) A professional corporation organized to
provide health care services may be organized either for the
purpose of practicing medicine, as described in ORS 677.085, or
for the purpose of practicing dentistry, as defined in ORS
679.010.
(2) If the professional corporation is organized for the
purpose of practicing medicine:
(a) The rights, duties, functions and responsibilities this
chapter assigns to a licensed health care practitioner must be
held or performed by a physician, as defined in ORS 677.010, who
holds a license to practice medicine issued by the Oregon Medical
Board under ORS chapter 677; and
(b) The health care practitioner licensing authority is the
Oregon Medical Board.
(3) If the professional corporation is organized for the
purpose of practicing dentistry:
(a) The rights, duties, functions and responsibilities this
chapter assigns to a licensed health care practitioner must be
held or performed by a dentist, as defined in ORS 679.010, who
holds a license to practice dentistry issued by the Oregon Board
of Dentistry under ORS chapter 679; and
(b) The health care practitioner licensing authority is the
Oregon Board of Dentistry. + }
SECTION 4. ORS 58.375 is amended to read:
58.375. (1) In a professional corporation organized { - for
the purpose of practicing medicine - } { + to provide health
care services + }:
(a) The holders of the majority of each class of shares
entitled to vote { - shall be physicians who are licensed in
this state to practice medicine - } { + must be licensed health
care practitioners + }.
(b) A majority of the directors { - shall be physicians who
are licensed in this state to practice medicine - } { + must be
licensed health care practitioners + }.
(c) All officers except the secretary and treasurer, if any,
must be { - physicians who are licensed in this state to
practice medicine - } { + licensed health care
practitioners + }. { - Any two or more offices may be held
by - } The same person { + may hold two or more offices + }.
(d) Except as otherwise provided by law, { - the Oregon
Medical Board - } { + a health care practitioner licensing
authority + } may expressly require that { + licensed health
care practitioners hold + } more than a majority of each class of
shares entitled to vote { - be held by physicians who are
licensed in this state to practice medicine - } .
(e) Except as otherwise provided by law, { - the Oregon
Medical Board - } { + a health care practitioner licensing
authority + } may expressly require that more than a majority of
the directors be { + licensed health care practitioners + }
{ - physicians who are licensed in this state to practice
medicine - } .
(2) A professional corporation may be a shareholder of a
professional corporation organized { - for the purpose of
practicing medicine solely for the purpose of effecting - } { +
to provide health care services solely to effect + } a
reorganization as defined in the Internal Revenue Code.
(3) The provisions of subsections (1) and (2) of this section
do not apply to nonprofit corporations organized under Oregon law
to provide medical services to migrant, rural, homeless or other
medically underserved populations under 42 U.S.C. 254b or 254c or
to health centers qualified under 42 U.S.C. 1396d(l)(2)(B) that
operate in compliance with other applicable state and federal
law.
SECTION 5. ORS 58.377 is amended to read:
58.377. If { - all of the outstanding shares of a
professional corporation organized for the purpose of practicing
medicine are held by - } an administrator, executor, personal
representative, guardian, conservator or receiver of the estate
of a former shareholder { + holds all of the outstanding shares
of a professional corporation organized to provide health care
services + }, or { - by - } { + if + } a transferee
{ - who - } receives { - such - } shares by operation of law
or by a judgment, { + the + } { - such - } administrator,
executor, personal representative, guardian, conservator,
receiver or transferee may be a director, officer or shareholder
of the professional corporation for a period of six months
following receipt or transfer of { - such - } { + the + }
shares.
SECTION 6. ORS 58.379 is amended to read:
58.379. { + Unless a health care practitioner licensing
authority provides otherwise, + }a professional corporation
organized { - for the purpose of practicing medicine - } { +
to provide health care services + } has the powers enumerated in
ORS 60.077 and 60.081 { - , except as provided otherwise by the
Oregon Medical Board - } .
SECTION 7. ORS 58.381 is amended to read:
58.381. (1) A proxy to vote the shares of a professional
corporation organized { - for the purpose of practicing
medicine - } { + to provide health care services + } may be
given under the following conditions:
(a) If the shareholder granting the proxy is a { - physician
licensed in this state to practice medicine - } { + licensed
health care practitioner + }, the proxy may be given only to a
shareholder of the same corporation who is also a { - physician
licensed in this state to practice medicine - } { + licensed
health care practitioner + }, or to an attorney licensed to
practice law in this state or another person similarly licensed.
(b) If the shareholder granting the proxy is not a
{ - physician licensed in this state to practice medicine - }
{ + licensed health care practitioner + }, the proxy may be
given only to another shareholder of the same corporation,
whether or not the other shareholder is a
{ - physician licensed in this state to practice medicine - }
{ + licensed health care practitioner + }, or to an attorney
licensed to practice law in this state or another person
similarly licensed.
(2) { - No - } { + A + } voting trust may { + not + } be
created to vote the shares of a professional corporation
organized { - for the purpose of practicing medicine - } { +
to provide health care services + }.
(3) Two or more shareholders of a professional corporation
organized { - for the purpose of practicing medicine - } { +
to provide health care services + } may enter into a voting
agreement provided that the voting agreement does not transfer
voting rights from a shareholder who is a { - physician
licensed in this state to practice medicine - } { + licensed
health care practitioner + } to a shareholder who is not { - so
licensed - } { + a licensed health care practitioner + }.
Notwithstanding any provision of this subsection, voting rights
may be transferred to an attorney licensed to practice law in
this state or another person similarly licensed.
SECTION 8. ORS 58.383 is amended to read:
58.383. (1) A shareholder of a professional corporation
organized { - for the purpose of practicing medicine - } { +
to provide health care services + } may sell or transfer shares
only in a manner that leaves the corporation in compliance with
this chapter.
(2) Subject to subsection (1) of this section, the articles of
incorporation, bylaws or agreements among shareholders of a
professional corporation organized { - for the purpose of
practicing medicine may provide limitations on - } { + to
provide health care services may limit + } the issuance and
transferability of shares of the corporation and may provide for
the { + corporation's + } purchase or redemption of shares
{ - by the corporation - } .
SECTION 9. ORS 58.385 is amended to read:
58.385. (1) If a { - physician practicing medicine - } { +
licensed health care practitioner who provides health care
services + } on behalf of a professional corporation is
disqualified from
{ - practicing medicine - } { + providing health care
services + } for more than six months or assumes a public office,
the duties of which prohibit { - practicing medicine - }
{ + providing health care services + } for more than six months
under the rules of the { - Oregon Medical Board - } { +
health care practitioner licensing authority + } or other law,
the professional corporation { - shall have - } { + has + }
the right to redeem the shares of the { - physician - } { +
licensed health care practitioner + } within 60 days after the
disqualification or prohibition occurs.
(2) If a { - physician practicing medicine - } { + licensed
health care practitioner who provides health care services + } on
behalf of a professional corporation is disqualified from
{ - practicing medicine - } { + providing health care
services + } for six months or less or assumes a public office,
the duties of which prohibit { - practicing medicine - } { +
providing health care services + } for six months or less under
the rules of the { - Oregon Medical Board - } { + health care
practitioner licensing authority + } or other law, the
{ - physician - } { + licensed health care practitioner + }
may retain ownership of the shares in the corporation and may
remain a director and officer of the corporation during the
period of disqualification, unless otherwise prohibited under the
rules of the { - Oregon Medical Board - } { + health care
practitioner licensing authority + } or by law.
SECTION 10. ORS 58.387 is amended to read:
58.387. (1) A professional corporation organized { - for the
purpose of practicing medicine and its - } { + to provide
health care services and the corporation's + } shareholders may
provide for the disposition of a deceased shareholder's shares in
the articles of incorporation, in the bylaws, by agreement
between the corporation and { - its - } { + the
corporation's + } shareholders or by agreement among the
shareholders. If there is no such provision, the { - shares
shall first be offered for sale to the remaining shareholders of
the corporation by the - } personal representative of the
deceased shareholder's estate { + shall first offer the shares
for sale to the remaining shareholders of the corporation + }. If
the shares are not disposed of within six months after the date
of the death of the deceased shareholder, a special meeting of
the shareholders
{ - shall - } { + must + } be called, at which meeting
{ - it shall be decided by vote of - } the remaining
shareholders { + shall vote to decide + } whether the
corporation shall redeem the shares or whether { + to
dissolve + } the corporation { - shall be - } voluntarily
{ - dissolved - } . The meeting
{ - shall - } { + must + } be held within seven months after
the date of the death of the deceased shareholder. The action
{ - determined to be taken by - } { + that + } the
shareholders { - shall - } { + decide to take must + } be
completed within nine months after the date of death of the
deceased shareholder. At the special meeting, the shares of the
deceased shareholder may not be voted or counted in the
{ - determination - } { + decision + } of whether { + to
redeem + } the shares { - shall be redeemed - } or
whether { + to dissolve + } the corporation { - shall be - }
voluntarily { - dissolved - } .
(2) If a deceased shareholder of a professional corporation
organized { - for the purpose of practicing medicine - } { +
to provide health care services + } was the only shareholder of
the corporation at the time of death, the corporation shall cease
to { - practice medicine - } { + provide health care
services + } as of the date of death of the deceased shareholder
unless the corporation has retained the services of another
{ - physician licensed in this state to practice medicine - }
{ + licensed health care practitioner + }. Within six months
after the date of death of the deceased shareholder:
(a) The shares of the deceased shareholder { - shall - }
{ + must + } be sold to { - a physician or physicians who are
licensed in this state to practice medicine - } { + another
licensed health care practitioner + };
(b) The name of the corporation { - shall - } { + must + }
be changed and restated articles adopted, which { - shall - }
{ + must + } be filed with the Secretary of State in accordance
with ORS chapter 60; or
(c) The corporation { - shall - } { + must + } be
dissolved.
SECTION 11. ORS 58.389 is amended to read:
58.389. If the articles of incorporation or bylaws of a
professional corporation organized { - for the purpose of
practicing medicine - } { + to provide health care services + }
do not provide a price or method of determining a price at which
the corporation may purchase or redeem the shares, or at which
{ - its - } { + the corporation's + } shareholders may
purchase the shares, of a legally disqualified or deceased
shareholder, and the corporation and shareholders or the
shareholders have not provided the price or a method of
determining the price by private agreement, then the price for
the shares { - shall be - } { + is + } the book value as of
the end of the month preceding the disqualification or death of
the shareholder, payable in cash or on { - such - } other
terms { - as may be agreed to by - } { + upon which + } the
parties { + agree + }. Book value { - shall - } { + must + }
be determined from the books and records of the corporation in
accordance with the regular method of accounting { - used
by - } the corporation { + uses + }.
SECTION 12. ORS 679.020 is amended to read:
679.020. (1) A person may not practice dentistry without a
license.
{ - (2) Only a person licensed as a dentist by the Oregon
Board of Dentistry may own, operate, conduct or maintain a dental
practice, office or clinic in this state. - }
{ - (3) The restrictions of subsection (2) of this section,
as they relate to owning and operating a dental office or clinic,
do not apply to a dental office or clinic owned or operated by
any of the following: - }
{ + (2) Except as provided in subsection (3) of this section,
a person may not own, operate, conduct or maintain a dental
practice, office or clinic in this state unless the Oregon Board
of Dentistry has licensed the person as a dentist. + }
{ + (3) The following persons or entities may operate a
dental office or clinic without obtaining a license as a dentist
from the Oregon Board of Dentistry: + }
(a) A labor organization { + , + } as defined in ORS 243.650
and 663.005 (6), or { - to any - } { + a + } nonprofit
organization formed by or on behalf of { - such - } { + a + }
labor organization for the purpose of providing dental services.
{ - Such - } { + The + } labor organization must have
{ - had an active existence - } { + actively existed + } for
at least three years, have a constitution and bylaws, and be
maintained in good faith for purposes other than providing dental
services.
(b) The School of Dentistry of the Oregon Health and Science
University.
(c) { - Institutions - } { + An institution + } of higher
education listed in ORS 352.002.
(d) { + A + } local { - governments - } { +
government + }.
(e) { - Institutions or programs accredited by - } { + An
institution or program that + } the Commission on Dental
Accreditation of the American Dental Association { +
accredits + } to provide education and training.
(f) { + A + } nonprofit { - corporations - } { +
corporation + } organized under Oregon law to provide dental
services to rural areas and medically underserved populations of
migrant, rural community or homeless individuals under 42 U.S.C.
254b or 254c or health centers qualified under 42 U.S.C.
1396d(l)(2)(B) { - operating - } { + that operates + } in
compliance with other applicable state and federal law.
(g) { + A + } nonprofit charitable { - corporations - }
{ + corporation + } as described in section 501(c)(3) of the
Internal Revenue Code { - and determined by - } { + that + }
the Oregon Board of Dentistry { - as - } { + determines
is + } providing dental services by volunteer licensed dentists
to populations with limited access to dental care at no charge or
a substantially reduced charge.
{ + (h) A professional corporation organized to provide
health care services in accordance with ORS chapter 58, provided
that the professional corporation is organized for the specific
purpose of practicing dentistry. + }
(4) For the purpose of owning or operating a dental office or
clinic, an entity described in subsection (3) of this section
must:
(a) Name an actively licensed dentist as { - its - } { +
the office's or clinic's + } dental director, who { - shall
be - } { + is + } subject to the provisions of ORS 679.140 in
the { + licensed dentist's + } capacity as dental director. The
dental director, or an actively licensed dentist designated by
the director, { - shall have - } { + has + } responsibility
for the clinical practice of dentistry, which includes, but is
not limited to:
(A) { - Diagnosis of - } { + Diagnosing + } conditions
within the human oral cavity and { - its adjacent - } tissues
and structures { + adjacent to the human oral cavity + }.
(B) Prescribing drugs that are administered to patients in the
practice of dentistry.
(C) { - The treatment plan of any - } { + Treating a + }
dental patient { + under a treatment plan + }.
(D) { + Establishing, ensuring and evaluating the + } overall
quality of patient care that is rendered or performed in the
practice of dentistry { + at the office or clinic + }.
(E) { - Supervision of - } { + Supervising + } dental
hygienists, dental assistants or other personnel involved in
direct patient care { + in accordance with standards of
supervision established by statute or by the rules of the
board + } and { - the authorization for - } { +
authorizing + } procedures { - performed by them - } { + the
dental hygienists, dental assistants or other personnel
perform + } { - in accordance with the standards of supervision
established by statute or by the rules of the board - } .
(F) { + Rendering + } other specific services within the scope
of clinical dental practice.
(G) { - Retention of - } { + Retaining + } patient dental
records as required by statute or by rule of the board.
(H) Ensuring that each patient receiving services from the
dental office or clinic has a dentist of record.
(b) Maintain current records of the names of licensed dentists
who supervise the clinical activities of dental hygienists,
dental assistants or other personnel { + the entity uses to
provide + } { - involved in - } direct patient care
{ - utilized by the entity - } . The records must be available
to the board upon written request.
(5) Subsections (1) and (2) of this section do not apply to a
limited access permit dental hygienist who renders services
authorized by a limited access permit { - issued by - } the
board { + issues + }
{ - pursuant to - } { + under + } ORS 680.200.
(6) { - Nothing in - } This chapter { - precludes - }
{ + does not preclude + } a person or entity not licensed by
the board from:
(a) { - Ownership or leasehold of any - } { + Owning or
leasing + } tangible or intangible assets used in a dental office
or clinic { - . These assets include - } { + such as + } real
property, furnishings, equipment and inventory but { - do not
include - } { + not including + } dental records of patients
related to clinical care.
(b) Employing or contracting for the services of personnel
other than licensed dentists.
(c) { - Management of - } { + Managing + } the business
aspects of a dental office or clinic that do not include the
clinical practice of dentistry.
(7) { - If all of the ownership interests of a dentist or
dentists in a dental office or clinic are held by - } { +
If + } an administrator, executor, personal representative,
guardian, conservator or receiver of the estate of a former
shareholder, member or partner { + holds all of the ownership
interests of a dentist in a dental office or clinic + }, the
administrator, executor, personal representative, guardian,
conservator or receiver may retain the ownership interest for a
period of 12 months following the creation of the ownership
interest. The board shall extend the ownership period for an
additional 12 months upon 30 days' notice and may grant
additional extensions upon reasonable request.
SECTION 13. { + (1) Section 3 of this 2011 Act and the
amendments to ORS 58.015, 58.375, 58.377, 58.379, 58.381, 58.383,
58.385, 58.387, 58.389 and 679.020 by sections 1 and 4 to 12 of
this 2011 Act become operative January 1, 2012.
(2) The Secretary of State, the Oregon Medical Board or the
Oregon Board of Dentistry may take any action before the
operative date specified in subsection (1) of this section that
is necessary to enable the Secretary of State, the Oregon Medical
Board or the Oregon Board of Dentistry to exercise, on and after
the operative date specified in subsection (1) of this section,
the duties, functions and powers conferred on the Secretary of
State, the Oregon Medical Board or the Oregon Board of Dentistry
by section 3 of this 2011 Act and the amendments to ORS 58.015,
58.375, 58.377, 58.379, 58.381, 58.383, 58.385, 58.387, 58.389
and 679.020 by sections 1 and 4 to 12 of this 2011 Act. + }
SECTION 14. { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
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