A 9042: Requires veterinary clinics to file notice and documentation to the attorney general to determine if certain transactions would be against the public interest for veterinary care access prior to completing such transactions; prohibits certain negative use restrictions imposed against veterinary clinics by private agreements.

  
  STATE OF NEW YORK ________________________________________________________________________ 9042 2025-2026 Regular Sessions  IN ASSEMBLY September 5, 2025 ___________ Introduced by M. of A. ROSENTHAL -- read once and referred to the Committee on Agriculture AN ACT to amend the agriculture and markets law, in relation to requir- ing veterinary clinics to file notice and documentation to the attor- ney general before completing certain transactions The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The agriculture and markets law is amended by adding a new 2 article 26-D to read as follows: 3 ARTICLE 26-D 4 DISCLOSURE OF MATERIAL CHANGES TO VETERINARY CLINICS 5 Section 440. Definitions. 6 441. Disclosure of material changes. 7 442. Notice of material changes; requirements. 8 443. Acquisitions of veterinary clinics against the public 9 interest prohibited; determination. 10 § 440. Definitions. For the purposes of this article, the following 11 terms shall have the following meanings: 12 1. "Veterinary clinic" or any other term used interchangeably in this 13 article, including but not limited to "organization" (regardless of its 14 organizational structure), "clinic", "provider", "practice", "veterinary 15 provider", and "veterinary practice", means a health care entity involv- 16 ing the practice of veterinary medicine, as defined by section sixty- 17 seven hundred one of the education law, including small practices, 18 groups, or management services organizations or similar entities provid- 19 ing all or substantially all of the administrative or management 20 services under contract with one or more veterinary or medical prac- 21 tices. For the purposes of this section, "veterinary clinic" shall 22 include professional services corporations incorporated for the purpose 23 of practicing veterinary medicine or overseeing the operations thereof. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD11436-03-5 
 A. 9042 2 1 2. "Against the public interest" means an action where the effect of a 2 transaction includes, as determined by the attorney general, any of the 3 following impacts: 4 (a) reduced competition or increased costs for veterinary care to pet 5 owners; 6 (b) unfair methods of competition or deceptive acts or practices in or 7 affecting veterinary care commerce; 8 (c) reduced quality of care including, but not limited to, care which 9 is not the standard of care or care which is not in the best interests 10 of such provider's patients; 11 (d) reduced access to or availability of veterinary care for pet 12 owners; or 13 (e) reduced access to care in a rural, low-income or disadvantaged 14 community. 15 3. "Material amount" means an amount equal to two hundred thousand 16 dollars or more. 17 4. "Material change" means any of the following: 18 (a) the sale, transfer, lease, or other encumbrance of a material 19 amount of a veterinary clinic's assets or operations, including real 20 property, employment groups, emergency rooms, or other clinic units; 21 (b) a merger, an acquisition, or a contracting affiliation with anoth- 22 er vet clinic or provider organization; or 23 (c) a capital distribution or similar reduction of a veterinary clin- 24 ic's equity capital by a material amount or the incursion of an obli- 25 gation that commits the veterinary clinic to make a capital distribution 26 or similar reduction of equity by a material amount. 27 5. "Merger" means a consolidation of two or more organizations, 28 including two or more organizations joining through a common parent 29 organization, or two or more organizations forming a new organization. 30 6. "Control" means the possession, direct or indirect, of the power to 31 direct or cause the direction of the management, administrative func- 32 tions, and policies of a veterinary clinic, whether through the owner- 33 ship of voting securities or rights, either directly or indirectly, by 34 contract alone or as part of a series of transactions (except a commer- 35 cial contract for goods or non-management services) or otherwise; but no 36 entity shall be deemed to control another entity solely by reason of 37 being an officer or director of a health care entity. Control shall be 38 presumed to exist if any person or entity directly or indirectly owns, 39 controls, or holds with the power to vote five percent or more of the 40 voting securities of a veterinary clinic. 41 7. "Acquisition" means an agreement, arrangement, or activity the 42 consummation of which results in a person or entity acquiring direct or 43 indirect control of another person or entity. The term includes the 44 acquisition of voting securities and noncorporate interests, including 45 assets, capital stock or membership interests or equity interests. 46 8. "Contracting affiliation" means the formation of a relationship 47 between two or more entities that permits the entities to negotiate 48 jointly with carriers or third-party administrators over rates for 49 professional medical services or one entity to negotiate on behalf of 50 the other entity with carriers or third-party administrators over rates 51 for professional medical services. 52 9. "Capital distribution" means a payment made, liability incurred, or 53 other consideration given to a person or entity for the purchase, acqui- 54 sition, redemption, repurchase, payment or retirement of capital stock 55 or other equity interest or as a dividend, return of capital, or other 56 distribution with respect to the capital stock or other equity interest. 
 A. 9042 3 1 § 441. Disclosure of material changes. Pursuant to this article, the 2 department shall adopt a process for the disclosure and notice of trans- 3 actions involving material changes. The items disclosed shall include 4 the factors listed in section four hundred forty-two of this article. 5 Nothing in this article shall limit or restrict the authority of the 6 superintendent of financial services under article fifteen, sixteen, 7 seventeen, forty-two, forty-three, seventy-one, or seventy-three of the 8 insurance law, or regulations promulgated thereunder. 9 § 442. Notice of material changes; requirements. 1. An acquiring enti- 10 ty shall submit to the department written notice of any transaction 11 involving a material change, with supporting documentation as described 12 in this subdivision and further defined in regulations developed by the 13 department, no later than fourteen days after such transaction has been 14 agreed to and prior to the consummation of all or any portion of such 15 transaction, in the form and manner prescribed by the department. Imme- 16 diately upon the submission to the department, the department shall 17 submit electronic copies of such notice with supporting documentation to 18 the antitrust, health care and charities bureaus of the office of the 19 New York attorney general for the purposes of determining whether such 20 material change is against the public interest pursuant to section four 21 hundred forty-three of this article. Such written notice shall include, 22 but not be limited to: 23 (a) all organic documents, including articles of incorporation, 24 bylaws, shareholder or other voting agreements, operating agreements, 25 and other documents related to governance and ownership of each party; 26 (b) all complete transaction documents with attachments, including 27 collateral or ancillary agreements involving officers, directors, or 28 employees; 29 (c) all documents signed by the principals, or their agents, that are 30 necessary to determine the proposed transaction's effect, if any, on 31 related or subsidiary business entities, whether nonprofit or for 32 profit; 33 (d) any of the following that comprise part or all of the transaction: 34 (i) asset contribution agreements; 35 (ii) operating agreements or management contracts; 36 (iii) all information necessary to evaluate the effects of the trans- 37 action on each component of an integrated delivery system where that 38 transaction involves a veterinary hospital, including any changes in 39 contracts between the integrated delivery system entities and related 40 veterinary groups; 41 (iv) all financial documents of the transaction parties and related 42 entities, where applicable, including audited financial statements, 43 ownership records, business projection data, current capital asset valu- 44 ation data and any records upon which future earnings, existing asset 45 values and fair market value analysis can be based; 46 (v) all fairness opinions and independent valuation reports of the 47 assets and liabilities of the parties, prepared by or on behalf of the 48 parties; 49 (vi) all relevant contracts that may affect value, including, but not 50 limited to, business and employee contracts, such as buy-out provisions, 51 profit sharing agreements, and severance packages; 52 (vii) all information and representations disclosing related party 53 transactions that are necessary to assess whether the transaction is at 54 arm's length or involves self-dealing; 55 (viii) all documents relating to noncash elements of the transaction, 56 including, but not limited to, pertinent valuations of security for 
 A. 9042 4 1 loans and stock restrictions or partner interest or membership interest 2 restrictions; 3 (ix) all tax-related information, including, but not limited to, the 4 existence of tax-free debt subject to redemption and disqualified person 5 transactions yielding tax liability; 6 (x) a list of ongoing litigation, including full court captions, 7 involving the transaction parties or their related entities, which may 8 affect the interests of the parties; 9 (xi) all information in the possession of the transacting parties 10 relative to the perspective of the vet clinic's patient base and commu- 11 nities served, or their representatives; 12 (xii) all information, including internal and external reports and 13 studies, bearing on the effect of the proposed transaction on the avail- 14 ability or accessibility of health care in the affected community; 15 (xiii) organizational charts of the parties to the transaction, as 16 they exist both pre-consummation and post-consummation of the trans- 17 action, detailing the relationship between the principal parties, 18 including any and all subsidiaries and related parties; and 19 (xiv) all additional documents that the attorney general deems neces- 20 sary or appropriate for review purposes; 21 (e) a statement as to whether any party to the transaction, or a 22 controlling person or parent company of such party, owns any other 23 health care entity which, in the past three years, has closed oper- 24 ations, is in the process of closing operations, or has experienced a 25 substantial reduction in services provided. The parties shall specif- 26 ically identify the health care entity or entities subject to such 27 closure or substantial service reduction and detail the circumstances of 28 such; and 29 (f) a statement as to whether a sale-leaseback agreement or mortgage 30 or lease payments or other payments associated with real estate are a 31 component of the proposed transaction and if so, the parties shall 32 provide the proposed sale-leaseback agreement or mortgage, lease, or 33 real estate documents with the notice. 34 2. (a) Except as provided in paragraph (b) of this subdivision, 35 supporting documentation as described in subdivision one of this section 36 shall not be subject to disclosure under article six of the public offi- 37 cers law. 38 (b) After submission to the department of written notice of a trans- 39 action involving a material change pursuant to subdivision one of this 40 section, the department shall post on its website: 41 (i) a summary of the proposed transaction; 42 (ii) an explanation of the groups or individuals likely to be impacted 43 by the transaction; 44 (iii) information about services currently provided by the veterinary 45 clinic, commitments by the veterinary clinic to continue such services, 46 and any services that will be reduced or eliminated; and 47 (iv) details about how to submit comments, in a format that is easy to 48 find and easy to read. 49 3. An acquiring entity that is a party to a transaction involving a 50 material change shall notify the department upon completion of the tran- 51 saction in the form and manner prescribed by the department. 52 4. Failure to notify the department of a material change under this 53 section shall be subject to civil penalties under section twelve of the 54 public health law. Each day in which the violation continues shall 55 constitute a separate violation. 
 A. 9042 5 1 § 443. Acquisitions of veterinary clinics against the public interest 2 prohibited; determination. 1. (a) Except as provided under paragraph (b) 3 of this subdivision, no person or entity shall sell, transfer, lease, 4 exchange, option or otherwise encumber a material amount of a veterinary 5 clinic's assets or operations in a manner that is against the public 6 interest. 7 (b) An action prohibited under subdivision one of this section may be 8 permitted when, as determined by the attorney general, there is no 9 feasible alternative to prevent a veterinary clinic's closure or greater 10 loss of health services. 11 2. (a) Within ninety days after the attorney general has received 12 written notice pursuant to subdivision one of section four hundred 13 forty-two of this article, the attorney general shall determine and 14 notify affected parties whether the proposed agreement or transaction is 15 against the public interest. 16 (b) If the attorney general determines that the proposed agreement or 17 transaction is against the public interest pursuant to paragraph (a) of 18 this subdivision, the attorney general may commence an action in a court 19 of competent jurisdiction to enjoin the agreement or transaction if the 20 parties do not voluntarily terminate the agreement or transaction. 21 (c) In the event that the attorney general does not make any determi- 22 nation pursuant to this subdivision within ninety days, or ninety days 23 plus any time such period is paused pursuant to subdivision three of 24 this section, the parties may proceed with the transaction; provided, 25 however, that the lack of determination shall not be construed as any 26 ruling or determination if such sale goes against the public interest. 27 3. The attorney general, during the ninety-day determination period 28 set forth in subdivision two of this section, may require the submission 29 of additional information or documentary material from an entity 30 required to file notification under this article, or from any officer, 31 director, partner, agent or employee of such entity, as the attorney 32 general deems necessary. In the event additional documentation is 33 requested, the ninety-day period for the attorney general to make their 34 determination shall be paused and shall re-commence after receipt of 35 such requested additional information or documentary material. 36 4. The attorney general may conduct one or more public hearings on the 37 proposed agreement or transaction, as necessary, to make a determination 38 pursuant to this section. 39 § 2. This act shall take effect on the ninetieth day after it shall 40 have become a law. Effective immediately, the addition, amendment and/or 41 repeal of any rule or regulation necessary for the implementation of 42 this act on its effective date are authorized to be made and completed 43 on or before such effective date.