Senate Study Bill 1092 SENATE FILE BY (PROPOSED COMMITTEE ON HUMAN RESOURCES BILL BY CHAIRPERSON RAGAN) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act to allow medical or osteopathic physicians, physician 2 assistants, and nurse practitioners to form limited liability 3 companies or professional corporations. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1781SC 83 6 jr/nh/8 PAG LIN 1 1 Section 1. Section 490A.1501, subsection 4, Code 2009, is 1 2 amended to read as follows: 1 3 4. "Profession" means the profession of certified public 1 4 accountancy, architecture, chiropractic, dentistry, physical 1 5 therapy, practice as a physician assistant, psychology, 1 6 professional engineering, land surveying, landscape 1 7 architecture, law, medicine and surgery, optometry, 1 8 osteopathic medicine and surgery, accounting practitioner, 1 9 podiatry, real estate brokerage, speech pathology, audiology, 1 10 veterinary medicine, pharmacy, practice as a nurse 1 11 practitioner, nursing, and marriage and family therapy, 1 12 provided that the marriage and family therapist is licensed 1 13 under chapters 147 and 154D. 1 14 Sec. 2. Section 490A.1502, Code 2009, is amended to read 1 15 as follows: 1 16 490A.1502 PURPOSES AND POWERS. 1 17 1. A professional limited liability company shall be 1 18 organized only for the purpose of engaging in the practice of 1 19 one specific profession, or two or more specific professions 1 20 which could lawfully be practiced in combination by a licensed 1 21 individual or a partnership of licensed individuals, and for 1 22 the additional purpose of doing all lawful things which may be 1 23 incidental to or necessary or convenient in connection with 1 24 the practice of the profession or professions. The articles 1 25 of organization of a professional limited liability company 1 26 shall state in substance that the purposes for which the 1 27 professional limited liability company is organized are to 1 28 engage in the general practice of a specified profession or 1 29 professions, or one or more specified branches or divisions 1 30 thereof, and to do all lawful things which may be incidental 1 31 to or necessary or convenient in connection with the practice 1 32 of the profession or professions. 1 33 2. For purposes of this section, medicine and surgery, 1 34 osteopathic medicine and surgery, practice as a physician 1 35 assistant, and practice as a nurse practitioner shall be 2 1 deemed to be professions which could lawfully be practiced in 2 2 combination by licensed individuals or a partnership of 2 3 licensed individuals. 2 4 Sec. 3. Section 490A.1505, Code 2009, is amended to read 2 5 as follows: 2 6 490A.1505 PRACTICE BY PROFESSIONAL LIMITED LIABILITY 2 7 COMPANY. 2 8 1. Notwithstanding any other statute or rule of law, a 2 9 professional limited liability company may practice a 2 10 profession, but may do so in this state only through members, 2 11 managers, employees, and agents who are licensed to practice 2 12 the same profession in this state. In its practice of a 2 13 profession, no professional limited liability company shall do 2 14 any act which could not lawfully be done by individuals 2 15 licensed to practice the profession which the professional 2 16 limited liability company is authorized to practice. 2 17 2. This section shall not prohibit persons practicing 2 18 medicine and surgery, persons practicing osteopathic medicine 2 19 and surgery, persons practicing as physician assistants, or 2 20 persons practicing as nurse practitioners, from practicing 2 21 their respective professions in lawful combination pursuant to 2 22 section 490A.1502. 2 23 Sec. 4. Section 490A.1514, Code 2009, is amended to read 2 24 as follows: 2 25 490A.1514 MANAGEMENT. 2 26 All managers of a professional limited liability company 2 27 shall at all times be individuals who are licensed to practice 2 28 a profession in this state, or a lawful combination of 2 29 professions pursuant to section 490A.1502, which the limited 2 30 liability company is authorized to practice. A person who is 2 31 not licensed shall have no authority or duties in the 2 32 management or control of the limited liability company. If a 2 33 manager ceases to have this qualification, the manager shall 2 34 immediately and automatically cease to hold such management 2 35 position. 3 1 Sec. 5. Section 496C.2, subsection 4, Code 2009, is 3 2 amended to read as follows: 3 3 4. "Profession" means the profession of certified public 3 4 accountancy, architecture, chiropractic, dentistry, physical 3 5 therapy, practice as a physician assistant, psychology, 3 6 professional engineering, land surveying, landscape 3 7 architecture, law, medicine and surgery, optometry, 3 8 osteopathic medicine and surgery, accounting practitioner, 3 9 podiatry, real estate brokerage, speech pathology, audiology, 3 10 veterinary medicine, pharmacy, practice as a nurse 3 11 practitioner, and the practice of nursing. 3 12 Sec. 6. Section 496C.4, Code 2009, is amended to read as 3 13 follows: 3 14 496C.4 PURPOSES AND POWERS. 3 15 1. A professional corporation shall be organized only for 3 16 the purpose of engaging in the practice of one specific 3 17 profession, or two or more specific professions which could 3 18 lawfully be practiced in combination by a licensed individual 3 19 or a partnership of licensed individuals, and for the 3 20 additional purpose of doing all lawful things which may be 3 21 incidental to or necessary or convenient in connection with 3 22 the practice of the profession or professions. The articles 3 23 of incorporation shall state in substance that the purposes 3 24 for which the corporation is organized are to engage in the 3 25 general practice of a specified profession or professions, or 3 26 one or more specified branches or divisions thereof, and to do 3 27 all lawful things which may be incidental to or necessary or 3 28 convenient in connection with the practice of the profession 3 29 or professions. Each professional corporation, unless 3 30 otherwise provided in its articles of incorporation or unless 3 31 expressly prohibited by this chapter, shall have all powers 3 32 granted to corporations by the Iowa business corporation Act, 3 33 chapter 490. 3 34 2. For purposes of this section, medicine and surgery, 3 35 osteopathic medicine and surgery, practice as a physician 4 1 assistant, and practice as a nurse practitioner shall be 4 2 deemed to be professions which could lawfully be practiced in 4 3 combination by licensed individuals or a partnership of 4 4 licensed individuals. 4 5 Sec. 7. Section 496C.7, Code 2009, is amended to read as 4 6 follows: 4 7 496C.7 PRACTICE BY PROFESSIONAL CORPORATION. 4 8 1. Notwithstanding any other statute or rule of law, a 4 9 professional corporation may practice a profession, but may do 4 10 so in this state only through shareholders, directors, 4 11 officers, employees, and agents who are licensed to practice 4 12 the same profession in this state. 4 13 2. In its practice of a profession, no professional 4 14 corporation shall do any act which could not lawfully be done 4 15 by individuals licensed to practice the profession which the 4 16 professional corporation is authorized to practice. 4 17 3. This section shall not prohibit persons practicing 4 18 medicine and surgery, persons practicing osteopathic medicine 4 19 and surgery, persons practicing as physician assistants, or 4 20 persons practicing as nurse practitioners, from practicing 4 21 their respective professions in lawful combination pursuant to 4 22 section 496C.4. 4 23 Sec. 8. Section 496C.16, Code 2009, is amended to read as 4 24 follows: 4 25 496C.16 MANAGEMENT. 4 26 All directors of a professional corporation and all 4 27 officers of a professional corporation, except assistant 4 28 officers, shall at all times be individuals who are licensed 4 29 to practice in this state a profession, or a lawful 4 30 combination of professions pursuant to section 496C.4, which 4 31 the corporation is authorized to practice. However, upon the 4 32 occurrence of any event that requires the corporation either 4 33 to be dissolved or to elect to adopt the provisions of the 4 34 Iowa business corporation Act, chapter 490, as provided in 4 35 section 496C.19, provided the corporation ceases to practice 5 1 the profession that the corporation is authorized to practice, 5 2 as provided in section 496C.19, then individuals who are not 5 3 licensed to practice in this state a profession that the 5 4 corporation is authorized to practice may be appointed as 5 5 officers and directors for the sole purpose of carrying out 5 6 the dissolution of the corporation or, if applicable, the 5 7 voluntary election of the corporation to adopt the provisions 5 8 of the Iowa business corporation Act, as provided in section 5 9 496C.19. 5 10 EXPLANATION 5 11 This bill allows physician assistants and nurse 5 12 practitioners to form professional corporations and 5 13 professional limited liability companies. The bill also 5 14 provides that persons who are licensed to practice medicine 5 15 and surgery, physician assistants, and nurse practitioners may 5 16 jointly form professional corporations and professional 5 17 limited liability companies. 5 18 LSB 1781SC 83 5 19 jr/nh/8