89R2583 SRA-F     By: Hinojosa of Hidalgo S.B. No. 2130       A BILL TO BE ENTITLED   AN ACT   relating to the regulation of certain transactions and activities   involving the provision of veterinary services; authorizing civil   penalties; creating criminal offenses.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Title 2, Business & Commerce Code, is amended by   adding Chapter 15A to read as follows:   CHAPTER 15A. CONSOLIDATION OF VETERINARY SERVICES   SUBCHAPTER A. GENERAL PROVISIONS          Sec. 15A.0001.  DEFINITIONS. In this chapter:                (1)  "Affiliate" means a person or entity who, directly   or indirectly through intermediaries, controls, is controlled by,   or is under common control with another entity or shares common   branding with another entity. For purposes of this subdivision,   control of an entity means having:                      (A)  ownership of or the direct or indirect   ability to vote 25 percent or more of the outstanding shares or   participation shares of any class of voting securities of the   entity;                      (B)  the ability to control in any manner the   election of the majority of the entity's directors or individuals   exercising functions similar to a director's functions; or                      (C)  the ability to directly or indirectly   exercise a controlling influence over the management or policies of   the entity through ownership of equity or securities, by contract,   or otherwise.                (2)  "Geographic market" means a county, metropolitan   statistical area designated by the United States Office of   Management and Budget, or contiguous geographic area in this state   from which an entity draws at least 50 percent of the entity's   veterinary services clients.                (3)  "Private equity company" means a for-profit firm,   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, or other entity, including a   wholly-owned subsidiary, majority-owned subsidiary, parent   company, or affiliate of any of those entities, that:                      (A)  is not required to be registered or regulated   as an investment company under the Investment Company Act of 1940   (15 U.S.C. Section 80a-1 et seq.) due to the exclusion from the   definition of investment company under Section 3(c)(1) or (7) of   the Investment Company Act of 1940 (15 U.S.C. Section 80a-3(c)(1)   or (7));                      (B)  engages in collecting capital from   individuals or entities to invest, develop, or dispose of assets;   and                      (C)  limits or does not provide investors with   redemption rights in the ordinary course of business.                (4)  "Transaction" means:                      (A)  a direct or indirect acquisition, purchase,   lease, merger, gift, encumbrance, exchange, option, receipt of a   conveyance, creation of a joint venture, or other transfer of an   interest in a veterinary services provider; or                      (B)  a change of control, wholly or partly, of a   veterinary services provider by a private equity company.                (5)  "Veterinary medicine" has the meaning assigned by   Section 801.002, Occupations Code.                (6)  "Veterinary services" means:                      (A)  diagnosing, treating, correcting, changing,   manipulating, relieving, providing care, advice, or guidance for,   or preventing disease, deformity, defect, injury, or other physical   or mental condition of an animal by prescribing, administering, or   dispensing to or for the animal a drug, biologic, anesthetic,   apparatus, surgery, or other therapeutic or diagnostic substance or   technique, and services provided under any other discipline or   specialty of veterinary medicine;                      (B)  representing an ability and willingness to   perform an act listed under Paragraph (A);                      (C)  using a title, a word, or letters to induce   the belief that a person is legally authorized and qualified to   perform an act listed under Paragraph (A); and                      (D)  receiving a fee from a client, including an   owner or caretaker of an animal, or insurer in exchange for   performing an act listed under Paragraph (A).                (7)  "Veterinary services provider" means:                      (A)  a person licensed to practice veterinary   medicine under Chapter 801, Occupations Code, who provides   veterinary services; and                      (B)  a business entity owned exclusively by one or   more veterinarians as authorized by Chapter 801, Occupations Code,   that provides veterinary services.          Sec. 15A.0002.  CHANGE OF CONTROL. For purposes of this   chapter, a change of control with respect to a veterinary services   provider in this state means an agreement, association,   affiliation, partnership, joint venture, transfer, or other   arrangement or event:                (1)  that results in a private equity company directly   or indirectly establishing a change in governance of or sharing of   control over the provision of veterinary services by the veterinary   services provider; or                (2)  in which a private equity company wholly or partly   assumes direct or indirect control over the management, operations,   or policies of the veterinary services provider through ownership   of voting securities, by contract, or through another means of   altering voting control or responsibility for the governing body of   the veterinary services provider.          Sec. 15A.0003.  RULES; PROCEDURES; FORMS. The attorney   general may adopt rules, procedures, and forms necessary to   administer and enforce this chapter.          Sec. 15A.0004.  MULTIPLE REMEDIES ALLOWED. The application   of one civil remedy under a provision of this chapter does not   preclude the application of any other civil or criminal remedy   under this chapter or other law. Civil remedies under this chapter   are supplemental and not mutually exclusive.   SUBCHAPTER B. REVIEW OF PROPOSED TRANSACTIONS          Sec. 15A.0051.  APPLICABILITY OF SUBCHAPTER. (a)  Except as   provided by Subsection (b), this subchapter applies only to a   proposed transaction between a private equity company and a   veterinary services provider:                (1)  that:                      (A)  involves:                            (i)  a veterinary services provider that has   an annual gross revenue of at least $400,000;                            (ii)  a private equity company that has an   annual gross revenue of at least $400,000 during the three most   recent fiscal years that is derived from veterinary services   provided in this state by the private equity company and the   company's affiliates; or                            (iii)  a veterinary services provider   located in a geographic market in which the private equity company   has a 40 percent market share of any veterinary services; or                      (B)  will result in an entity that is projected to   generate an annual gross revenue of at least $400,000 during the   five years after the transaction's closing date; and                (2)  with respect to which at least one of the following   material circumstances exists:                      (A)  the transaction is a merger, consolidation,   amalgamation, divestiture, leveraged buyout, or interest exchange   of a veterinary services provider by or with another entity;                      (B)  the transaction is part of a series of   related transactions for the same or related veterinary services   occurring over the past 10 years involving the same entities to the   transaction or entities affiliated with the same entities to the   transaction;                      (C)  the transaction involves the acquisition of a   veterinary services provider by another entity that has consummated   a similar transaction or series of similar transactions over the   past 10 years with one or more other veterinary services providers;                      (D)  the transaction involves the formation of a   new entity, affiliation, partnership, joint venture, or parent   corporation for the provision of veterinary services in this state   that is projected to have at least $400,000 in annual revenue at   normal or stabilized levels of utilization or operation;                      (E)  the transaction involves a change of control   of assets in this state that are related to the provision of   veterinary services and valued at $400,000 or more;                      (F)  the fair market value of the transaction is   at least $400,000 and the transaction concerns the provision of   veterinary services;                      (G)  the transaction is likely to increase the   annual revenue derived in this state of any party to the transaction   by either $400,000 or more or 25 percent or more at normal or   stabilized levels of utilization or operation;                      (H)  the transaction involves the sale, transfer,   lease, exchange, option, encumbrance, granting of a security   interest, or other disposition of 25 percent or more of the total   assets or operations of the veterinary services provider to another   entity;                      (I)  the transaction is part of an agreement or   series of agreements that will result in the sharing of 25 percent   or more of the veterinary services provider's revenues with the   private equity company, that company's affiliates, or a combination   of those entities;                      (J)  the transaction would result in the transfer   of 25 percent or more of the voting power of the members of the   governing body of the veterinary services provider, including by   adding or substituting one or more members or through any other type   of written or oral arrangement;                      (K)  the transaction would vest voting rights   significant enough to constitute a change in control, including   supermajority rights, veto rights, exclusivity provisions, and   similar provisions, even if ownership shares or representation on a   governing body are less than 25 percent;                      (L)  the transaction is part of an agreement or   series of agreements that directly or indirectly through one or   more other persons transfers to another entity the ownership of or   power to vote 25 percent or more of the outstanding shares of any   class of voting security of a veterinary services provider;                      (M)  the transaction is part of an agreement or   series of agreements that directly or indirectly transfers the   power to exercise a controlling influence over the management or   policies of a veterinary services provider; or                      (N)  the transaction would result in any other   change of control of a veterinary services provider to, or   acquisition of control of a veterinary services provider by,   another entity.          (b)  This subchapter does not apply to a proposed transaction   if, immediately before the transaction, the private equity company   that is a party to the transaction already controls all other   parties to the transaction.          Sec. 15A.0052.  ATTORNEY GENERAL CONSENT TO PROPOSED   TRANSACTION REQUIRED.  A proposed transaction to which this   subchapter applies may not be completed unless the attorney general   provides written approval for the transaction to be completed.          Sec. 15A.0053.  NOTICE TO ATTORNEY GENERAL OF PROPOSED   TRANSACTION. (a)  A private equity company that is a party to a   proposed transaction shall submit to the attorney general for   approval under Section 15A.0052 written notice of the transaction   not later than the 90th day before the transaction's anticipated   closing date.          (b)  A notice of a proposed transaction must contain:                (1)  the name, address, federal tax identification   number, contact information, and business line or segment of each   party to the transaction;                (2)  the anticipated closing date of the transaction;                (3)  the annual revenue for the three most recent   fiscal years derived from the provision of veterinary services in   this state by each party to the transaction;                (4)  the current geographic markets for veterinary   services of each party to the transaction;                (5)  for each party to the transaction, the address of   each facility owned or operated for the provision of veterinary   services, the number of staff for each facility, and the capacity to   serve patients or the number of patients served within the   preceding three years for each geographic market;                (6)  a detailed description of the terms of the   transaction;                (7)  for each party to the transaction, the current   organizational chart, including charts of any parent and subsidiary   entities, and proposed charts for each entity if the transaction is   completed;                (8)  the current governing documents for each entity   involved in the transaction, any amendments to the governing   documents, and any proposed updates to the governing documents that   will result from the transaction;                (9)  a copy of each agreement and term sheet, with   accompanying appendices and exhibits, governing or related to the   transaction;                (10)  any documents identifying the number of clients   per geographic market for each entity involved in the transaction   covering the three most recent fiscal years;                (11)  the following information prepared by both   internal experts and independent consultants within the three years   preceding the scheduled closing date for the transaction:                      (A)  any financial report containing an economic   analysis and impact analysis on the effects of the transaction;                      (B)  the results of any projections or modeling of   utilization of veterinary services;                      (C)  the financial impacts related to the   transaction; and                      (D)  any valuation of the assets and operations   that are subject to the transaction;                (12)  a copy of any materials submitted to or required   in connection with the transaction by any other state or federal   agency, including the United States Federal Trade Commission or the   United States Department of Justice;                (13)  audited financial reports or comprehensive   financial statements, including details, for the following for each   entity involved in the transaction covering the three most recent   fiscal years:                      (A)  annual costs and annual receipts;                      (B)  realized capital gains and losses; and                      (C)  accumulated surplus and accumulated   reserves;                (14)  tax filings and any documents related to   liabilities, debts, assets, balance sheets, statements of income   and expenses, any accompanying footnotes, and revenue of each   entity involved in the transaction covering the three most recent   fiscal years;                (15)  a description of services currently provided by   the veterinary services provider involved in the transaction and   expected post-transaction impacts on veterinary services,   including:                      (A)  the geographic markets currently served and   any post-transaction changes to those markets; and                      (B)  the levels and type of veterinary services   currently offered and any post-transaction changes to those   services;                (16)  a description of any other prior mergers or   acquisitions closed in the last 10 years, if applicable, that   involved:                      (A)  other veterinary services providers; and                      (B)  at least one of the entities, or their   parents, subsidiaries, predecessors, or successors, involved in   the transaction;                (17)  a description of potential post-transaction   changes to ownership, governance, or operational structure,   employee staffing levels, job security, retraining policies,   wages, and benefits of the parties to the transaction; and                (18)  any other information, including documents, the   attorney general determines necessary to evaluate the transaction.          (c)  The attorney general may deny approval for a proposed   transaction with respect to which a private equity company submits   notice under this section on the basis that the company did not   submit adequate information, provided that the attorney general:                (1)  notifies the company of the insufficiency; and                (2)  allows the company a reasonable opportunity to   remedy the insufficiency.          Sec. 15A.0054.  ACKNOWLEDGEMENT OF RECEIPT OF NOTICE;   COMMENCEMENT OF REVIEW PERIOD.  (a)  Notice of a proposed   transaction submitted by a private equity company under Section   15A.0053 is considered complete on the date the attorney general   provides a written acknowledgement to the company that the attorney   general has received all required information. The attorney   general's written acknowledgement constitutes the beginning of the   review period for the transaction.          (b)  The attorney general may not unreasonably withhold an   acknowledgement that notice that meets the requirements of Section   15A.0053 has been submitted.          Sec. 15A.0055.  REVIEW PERIOD. (a) Except as otherwise   provided by this section, the attorney general, not later than the   60th day after the date the attorney general provides written   acknowledgement of having received a complete notice under Section   15A.0054, shall complete a review of the proposed transaction and   provide to the parties to the transaction:                (1)  written approval for the transaction and the basis   for that approval; or                (2)  written denial of the transaction and the basis   for that denial.          (b)  The attorney general may stay any period specified by   this section during the period of a concurrent review conducted by   another state agency, a federal regulatory agency, or a court if the   other entity's review may affect the attorney general's review of   the proposed transaction. The attorney general shall provide notice   of the stay to the parties to the transaction.          (c)  The attorney general may extend the period required   under Subsection (a) by an additional 30 days, in addition to any   time for which the review period is stayed under Subsection (b), if   additional time is necessary to complete the review of the proposed   transaction. The attorney general shall provide notice of the   extension to the private equity company that submitted the notice   of the transaction under Section 15A.0053. If the extension is   necessary to obtain additional documentation or information, the   attorney general may toll the additional 30 days for any period   during which the attorney general is awaiting that documentation or   information.          Sec. 15A.0056.  APPROVAL OR DENIAL OF PROPOSED TRANSACTION.   (a)  The attorney general may approve or deny a proposed transaction   to which this subchapter applies based on the attorney general's   determination of whether the transaction is against the public   interest. The attorney general shall provide notice to the parties   to the transaction of the approval or denial.          (b)  In determining whether a proposed transaction with   respect to which a private equity company submits notice under   Section 15A.0053 is against the public interest, the attorney   general shall consider whether the transaction may:                (1)  lessen competition or create a monopoly in any   geographic market affected by the transaction;                (2)  be a part of a series of similar transactions by   the private equity company that furthers a trend toward   consolidation;                (3)  incentivize practices by the private equity   company that may:                      (A)  reduce quality of veterinary services;                      (B)  increase the total cost of veterinary   services for clients or insurance payors; or                      (C)  generate less cost-efficient patient   outcomes;                (4)  require the private equity company to obtain   financing collateralized by the veterinary services provider's   operations or assets to meet the cost of the transaction, which will   subsequently shift the burden of financial risk in ways that may   undermine the financial stability or competitive effectiveness of   the veterinary services provider;                (5)  reduce the options of competing veterinary   services providers within a geographic market that may incentivize   the private equity company involved in the transaction to:                      (A)  increase prices for veterinary services;                      (B)  lower the quality at a given price for   veterinary services; or                      (C)  provide less cost-efficient veterinary   services;                (6)  enable the private equity company to accrue market   power that may reduce the incentive to compete or offer a comparable   or better patient experience within a geographic market;                (7)  entrench or extend a dominant market position of   veterinary services of any entity involved in the transaction,   including extending market power into related markets through   vertical or cross-market mergers;                (8)  reduce the delivery of veterinary services to   uninsured or underinsured populations within a geographic market;                (9)  reduce access to affordable and quality veterinary   services within a geographic market;                (10)  restrict or reduce the range of veterinary   services historically offered within a geographic market;                (11)  negatively affect veterinary services provider   cost trends and containment of total animal care spending; or                (12)  negatively affect the labor market by:                      (A)  lowering wages or slowing wage growth;                      (B)  worsening benefits or working conditions; or                      (C)  resulting in other degradations of workplace   quality.          (c)  A proposed transaction may not be presumed to be   efficient for the purpose of assessing compliance with the factors   of public interest.          Sec. 15A.0057.  REVIEW ASSISTANCE FROM OTHER ENTITIES. (a)     For purposes of evaluating a proposed transaction to determine   whether to approve or deny the transaction under this subchapter,   the attorney general may:                (1)  contract with, consult, and receive   recommendations from any state or federal agency on terms the   attorney general considers appropriate; or                (2)  contract with experts or consultants to help   review the transaction.          (b)  Notwithstanding Subsection (a), the attorney general   may not incur contract costs that exceed the reasonable amount   necessary for a review of the proposed transaction.          Sec. 15A.0058.  REQUEST FOR RECONSIDERATION. (a) Not later   than the 10th day after the date the attorney general provides   notice of the attorney general's determination to deny a proposed   transaction under Section 15A.0056, a party to the transaction may   request that the attorney general reconsider the decision and   modify, amend, or revoke the prior decision based on new or   different facts, circumstances, or law.          (b)  A party requesting a reconsideration under Subsection   (a) shall submit to the attorney general a written affidavit   stating the new or different facts, circumstances, or law the party   requests to be considered.          (c)  The attorney general shall grant or deny   reconsideration not later than the 30th day after the date of   receipt of the request under this section.          (d)  If the reconsideration request is granted, the attorney   general shall provide notice to the parties to the proposed   transaction that is the subject of the request of the attorney   general's approval or denial of the transaction following   reconsideration. A decision by the attorney general under this   subsection has the same force and effect as the original decision.          Sec. 15A.0059.  ADMINISTRATIVE RECORD OF ATTORNEY GENERAL   DETERMINATION. (a) The attorney general's determination to   approve or deny a proposed transaction under Section 15A.0056 or   15A.0058 must be based on and the attorney general shall maintain an   administrative record that consists of:                (1)  evidence the parties to the transaction submitted;                (2)  official reports made by any experts the attorney   general hired or contracted with to review the transaction;                (3)  evidence the attorney general obtained from the   parties to the transaction or from third parties; and                (4)  any other evidence or information the attorney   general relied on in making the determination, including   information submitted as part of the notice required by Section   15A.0053.          (b)  To the extent any evidence or information is   confidential, the attorney general shall take reasonable measures   to ensure the confidentiality of that evidence or information in   the administrative record.          Sec. 15A.0060.  JUDICIAL REVIEW OF ATTORNEY GENERAL   DETERMINATION.  (a)  Not later than the 30th day after the date the   attorney general makes a final determination under Section 15A.0056   or 15A.0058 to deny approval for a proposed transaction, a party to   the transaction may institute judicial review of the determination   by filing a petition for judicial review in a district court in   Travis County.          (b)  On receipt of notice of the filing of the petition for   judicial review, the attorney general shall provide to the court   and the parties to the proposed transaction the original or a   certified copy of the administrative record related to the   transaction that the attorney general maintains under Section   15A.0059. The court may:                (1)  set a deadline by which the attorney general must   submit the administrative record; and                (2)  require or permit later corrections or additions   to the administrative record.          (c)  Judicial review of the attorney general's final   determination regarding a proposed transaction is under the   substantial evidence rule.          (d)  After a review of the records, including the   administrative record and any material submitted in support of the   petition, the court may grant the petition and approve the proposed   transaction if the court finds that the attorney general's final   determination was:                (1)  arbitrary or capricious;                (2)  characterized by abuse of discretion; or                (3)  clearly an unwarranted exercise of discretion.          (e)  Not later than the 180th day after the date the petition   for judicial review was filed, the court shall issue a written   decision providing the court's findings of fact and conclusions of   law unless extraordinary circumstances prevent the court from   issuing the decision during that period.          Sec. 15A.0061.  FAILURE TO SUBMIT NOTICE: INVESTIGATION.     The attorney general or a county or district attorney may conduct an   investigation to determine whether a private equity company:                (1)  failed to comply with Section 15A.0053 with   respect to a proposed or completed transaction; and                (2)  is or has been engaging in or is actively preparing   to engage in an activity that constitutes a violation of Subchapter   C.          Sec. 15A.0062.  FAILURE TO SUBMIT NOTICE: CIVIL PENALTY.   (a)  A private equity company that violates Section 15A.0053 is   liable to this state for a civil penalty in an amount not to exceed   $2,000 for each violation.          (b)  The attorney general may bring an action in a district   court of Travis County to:                (1)  recover the civil penalty imposed by this section;                (2)  compel compliance with the requirements of Section   15A.0053; and                (3)  enjoin or unwind a transaction for failure to   comply with Section 15A.0053.          (c)  The attorney may recover reasonable attorney's fees and   other reasonable costs incurred in investigating and bringing an   action under this section.          (d)  The court may grant any other equitable relief the court   considers appropriate in an action under this section.   SUBCHAPTER C. PROHIBITED ACTIVITIES          Sec. 15A.0101.  PROHIBITED TRANSACTIONS AND OTHER   ACTIVITIES.  (a)  A private equity company may not enter into a   transaction that:                (1)  will substantially lessen competition in a   geographic market for veterinary services; or                (2)  tends, attempts, or conspires to create a monopoly   in the veterinary services market within a geographic area.          (b)  A private equity company involved in any manner with a   veterinary services provider doing business in this state, whether   as an investor or owner of the provider's assets, may not control or   direct the provider's practice of veterinary medicine, including   by:                (1)  influencing or entering into contracts with third   parties on behalf of the provider;                (2)  influencing or setting rates or fees to be charged   by the provider to third parties;                (3)  influencing patient admissions or referrals; or                (4)  influencing the selection or use of medical   supplies and pharmaceuticals.          (c)  A veterinary services provider doing business in this   state may not enter into an agreement or arrangement with any entity   directly or indirectly owned or controlled wholly or partly by a   private equity company that allows the private equity company to:                (1)  arrange for the collection or sale of the   provider's accounts receivable; or                (2)  manage the provider's operations in exchange for:                      (A)  a percentage of collections or revenue; or                      (B)  a fee charged to the veterinary services   provider or passed through to a client, owner or caretaker of an   animal, or insurer covering veterinary services.          (d)  A contract involving the management of a veterinary   services provider by a private equity company or the sale of a   veterinary services provider's real property or other assets to a   private equity company may not include a provision that prohibits:                (1)  a veterinarian from competing with the provider if   the veterinarian leaves the provider's practice; or                (2)  a veterinarian from disparaging, opining, or   commenting on the provider with regard to any issues involving:                      (A)  quality of care;                      (B)  utilization of care;                      (C)  ethical or professional standards or   guidelines; or                      (D)  revenue-increasing strategies employed by   the company.          (e)  A contract provision described by Subsection (d) is void   and unenforceable as against public policy.          Sec. 15A.0102.  INVESTIGATIVE AND ENFORCEMENT AUTHORITY.   (a) The attorney general or, subject to Subsection (f), the   appropriate district or county attorney may:                (1)  investigate any activity or contemplated activity   that violates or threatens to violate any of the prohibitions in   this subchapter;                (2)  bring an action to recover a civil penalty imposed   under or other remedy authorized by Section 15A.0104 or 15A.0105;   or                (3)  bring an action requesting a court order under   Section 15A.0103.          (b)  The appropriate local prosecuting attorney may   prosecute an offense under Section 15A.0106, 15A.0107, or 15A.0108.          (c)  The attorney general or a district or county attorney   may recover fees, expenses, and costs incurred in bringing an   action under this subchapter, including court costs, reasonable   attorney's fees, witness fees, and deposition fees.          (d)  Venue for an action brought under this subchapter shall   be in a district court of Travis County or in the district court of   the county in which any part of the alleged violation of any of   Section 15A.0101 occurred, is occurring, or is about to occur.   Venue for prosecution of an offense under Section 15A.0106,   15A.0107, or 15A.0108, is in any county in which the violation is   alleged to have occurred or to be occurring.          (e)  The attorney general or, subject to Subsection (f), a   district or county attorney may bring an action to recover a civil   penalty under this subchapter independently or together with an   action to obtain injunctive relief. The district court issuing   injunctive relief retains jurisdiction in an action brought to   recover a civil penalty under this subchapter. An action filed   under Section 15A.0104 or 15A.0105 may not be transferred to   another county except on the order of the court.          (f)  A district or county attorney, with prior written notice   to the attorney general, has the authority to bring an action under   this subchapter, provided that not later than the fifth day after   the date the attorney general receives the notice the attorney   general responds that the attorney general does not intend to act   with respect to that matter. On receipt of notice of a related   active criminal investigation or prosecution, the attorney general   shall coordinate and cooperate with the district or county attorney   engaged in the investigation or prosecution to ensure that the   filing of an action under this subchapter does not interfere with an   ongoing criminal investigation or prosecution.          (g)  A district or county attorney shall bring an action   under this subchapter in the name of the state.          (h)  A civil penalty collected under this subchapter by the   district or county attorney shall be deposited to the credit of the   general fund of the county in which the attorney brought action.          (i)  The attorney general may retain a reasonable portion of   a civil penalty recovered under this subchapter, not to exceed   amounts specified in the General Appropriations Act, for the   enforcement of this subchapter.          Sec. 15A.0103.  INVESTIGATION. (a) The attorney general or   a district or county attorney may conduct an investigation if the   attorney general or district or county attorney has reason to   believe that:                (1)  a veterinary services provider or private equity   company possesses information, custody, or control of documents or   other evidence relevant to an investigation of any activity or   contemplated activity that violates or threatens to violate Section   15A.0101;                (2)  a veterinary services provider or private equity   company is engaging, has engaged, or is about to engage in an act or   practice that violates Section 15A.0101; or                (3)  it is in the public interest to conduct an inquiry   to ascertain whether a veterinary services provider or private   equity company is engaging, has engaged, or is about to engage in an   act or practice that violates Section 15A.0101.          (b)  During an investigation under this section, the   attorney general or a district or county attorney, as applicable,   may:                (1)  require the veterinary services provider or   private equity company to file a written statement under oath or   affirmation detailing all facts and circumstances concerning the   alleged violation of Section 15A.0101 and any other necessary   information;                (2)  examine under oath any person connected to an   activity or contemplated activity that may violate Section   15A.0101; and                (3)  issue a civil investigative demand requiring the   veterinary services provider or private equity company to produce   documents, permit inspection and copying of the document, answer in   writing written interrogatories, or give oral testimony.          (c)  Except as provided by this section, the procedures   established for the issuance of a civil investigative demand under   Section 17.61 apply to the same extent and manner to the issuance of   a civil investigative demand under this section.          (d)  The attorney general or a district or county attorney,   as applicable, may use information obtained in response to a civil   investigative demand, documents obtained, or product of discovery   or other record derived or created from the information as   necessary to enforce this subchapter, including by presenting the   information to a court.          (e)  The attorney general or a district or county attorney   shall bear the expense of copying documents for purposes of this   section. The attorney general or a district or county attorney   shall prescribe reasonable terms allowing the veterinary services   provider or private equity company to substitute copies for   originals of requested documents if the originals are made   available for inspection. The attorney general or a district or   county attorney may obtain or review information in an electronic   format.          (f)  A veterinary services provider or private equity   company served with a civil investigative demand under this section   shall comply with the terms of the demand unless a court orders   otherwise. A district or county attorney who executes and serves a   civil investigative demand may file a petition similar to a   petition described by Section 17.61(g) in the district court of the   county in which any part of the alleged violation of Section   15A.0101 occurred, is occurring, or is about to occur.          (g)  Subject to Section 15A.0109, the attorney general or a   district or county attorney may seek a court order to compel   compliance with Subsection (b) within a period stated by court   order.          Sec. 15A.0104.  INJUNCTIVE RELIEF. (a) The attorney   general or a district or county attorney may bring an action against   a veterinary services provider or private equity company to   restrain or enjoin temporarily or permanently any activity or   contemplated activity of the provider or company that the attorney   general or district or county attorney has reason to believe   violates or threatens to violate Section 15A.0101.          (b)  The court may issue a temporary restraining order or a   temporary or permanent injunction. The injunctive relief shall be   issued without bond.          (c)  This section may not be construed to require the   attorney general or a district or county attorney to notify a   veterinary services provider or private equity company that court   action is or may be under consideration. Except as otherwise   provided by this subsection, the attorney general or district or   county attorney shall, not later than the seventh day before   instituting a court action, contact the provider or company to   inform the provider or company in general of an alleged violation   under Section 15A.0101. Cessation of an alleged violation after   the prior contact may not render the court action moot under any   circumstances, and the injunctive relief shall lie even if the   provider or company has ceased the act or practice after prior   contact. Prior contact is not required if, in the opinion of the   attorney general or district or county attorney, there is good   cause to believe that:                (1)  the provider or company would:                      (A)  evade service of process if prior contact   were made; or                      (B)  destroy relevant records if prior contact   were made; or                (2)  an emergency exists and immediate and irreparable   injury, loss, or damage would occur as a result of a delay in   obtaining a temporary restraining order.          (d)  A veterinary services provider or private equity   company that violates an injunction issued under this section shall   forfeit and pay a civil penalty of not more than $10,000 per   violation, not to exceed $50,000.          Sec. 15A.0105.  CIVIL PENALTIES; ADDITIONAL ENFORCEMENT   ACTIONS. (a) The attorney general or an appropriate district or   county attorney may bring an action to recover a civil penalty   against a veterinary services provider or private equity company   that the attorney general or district or county attorney believes   has violated Section 15A.0101.          (b)  A civil penalty imposed under this section for a   violation of Section 15A.0101(a) or (b) may not exceed:                (1)  for an individual person, $300,000; or                (2)  for a private equity company:                      (A)  $3 million, if the lesser of the company's   assets or market capitalization is less than $100 million;                      (B)  $20 million, if the lesser of the company's   assets or market capitalization is at least $100 million but less   than $500 million; or                      (C)  $30 million, if the lesser of the company's   assets or market capitalization is $500 million or more.          (c)  A civil penalty imposed under this section for a   violation of Section 15A.0101(c) or (d) may be in an amount not to   exceed $7,500 for each violation. Each day a violation continues is   a separate violation for purposes of imposing the civil penalty   under this subsection.          (d)  The amount of a civil penalty under Subsection (c) shall   be based on:                (1)  the seriousness of the violation, including the   nature, circumstances, extent, and gravity of the violation;                (2)  the history of previous violations;                (3)  the amount necessary to deter a future violation;                (4)  the economic effect of a penalty on the veterinary   services provider or private equity company on which the penalty   will be imposed;                (5)  knowledge that the act constituted a violation of   this subchapter; and                (6)  efforts to correct the violation.          (e)  Notwithstanding Subsection (c), if the trier of fact   finds that a contract, agreement, or arrangement prohibited under   Section 15A.0101(c) or (d) may have the effect of substantially   lessening competition in a geographic market, the penalties and   remedies prescribed by Subsections (b) and (f) apply instead of the   penalty prescribed by Subsection (c).          (f)  On finding a violation of Section 15A.0101(a) or (b),   the court shall:                (1)  order the divestiture or other disposition of any   stock, share capital, assets, or interest acquired in violation of   Section 15A.0101(a) or (b), as applicable; and                (2)  prescribe a reasonable time, manner, and degree of   the divestiture or other disposition after the court determines   that divestiture is necessary:                      (A)  to avoid the creation or continuation of a   monopoly or to avoid a likely substantial lessening of competition   that results from the violation; or                      (B)  to restore competition for veterinary   services in a geographic market that has been eliminated by the   violation.          (g)  In addition to the civil penalties provided under this   section, the court may issue appropriate orders and judgments,   including:                (1)  ordering the suspension or revocation of a   license, permit, or approval previously granted to a defendant by   any state agency; or                (2)  imposing reasonable restrictions on the future   activities or investments of a defendant, including prohibiting a   defendant from engaging in the same type of endeavor as the   enterprise in which the defendant was engaged in conduct violating   Section 15A.0101.          Sec.  15A.0106.  CERTAIN PROHIBITED TRANSACTIONS AND   ACTIVITIES: CRIMINAL OFFENSE. (a) A veterinary services provider   or private equity company commits an offense if the provider or   company violates Section 15A.0101(a) or (b).          (b)  An offense under this section is a Class A misdemeanor   punishable by:                (1)  a fine not to exceed $5,000;                (2)  confinement in jail for a term not to exceed three   years; or                (3)  both such fine and confinement.          Sec. 15A.0107.  INTERFERENCE WITH INVESTIGATION: CRIMINAL   OFFENSE. (a) A veterinary services provider or private equity   company commits an offense if, after receiving actual notice that   the attorney general or a district or county attorney has initiated   or plans to initiate an investigation under this subchapter, the   provider or company intentionally conceals, alters, destroys, or   falsifies a document or record that is relevant or material to the   investigation.          (b)  A veterinary services provider or private equity   company commits an offense if, after receiving a civil   investigative demand issued under Section 15A.0103, the provider or   company intentionally falsifies or withholds relevant material   that is not privileged.          (c)  An offense under this section is a Class A misdemeanor.          Sec. 15A.0108.  DELIBERATE NONCOMPLIANCE: CRIMINAL OFFENSE.   (a) A veterinary services provider or private equity company   commits an offense if the provider or company, with intent to wholly   or partly avoid, evade, or prevent compliance with Section   15A.0103, knowingly removes from any place, conceals, withholds,   destroys, mutilates, alters, or by any other means falsifies any   document or record that is relevant or material to an investigation   or otherwise provides inaccurate information.          (b)  An offense under this section is a Class A misdemeanor   punishable by:                (1)  a fine not to exceed $5,000;                (2)  confinement in jail for a term not to exceed one   year; or                (3)  both such fine and confinement.          Sec. 15A.0109.  SCOPE OF JURISDICTION; APPEAL. (a)  A   district court in which an action is filed in accordance with this   subchapter may hear and determine the matter presented and enter   any order required to implement this chapter. A final order of the   court is subject to appeal.          (b)  The failure of a party to an action filed under this   subchapter to comply with a final order of the court is punishable   by contempt.          SECTION 2.  The changes in law made by this Act apply to   conduct occurring on or after the effective date of this Act.   Conduct occurring before that date 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 3.  This Act takes effect September 1, 2025.