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--A
2025-2026 Regular Sessions
IN ASSEMBLY
September 5, 2025
___________
Introduced by M. of A. ROSENTHAL -- read once and referred to the
Committee on Agriculture -- recommitted to the Committee on Agricul-
ture in accordance with Assembly Rule 3, sec. 2 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
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.
10 444. Negative use restrictions.
11 § 440. Definitions. For the purposes of this article, the following
12 terms shall have the following meanings:
13 1. "Veterinary clinic" or any other term used interchangeably in this
14 article, including but not limited to "organization" (regardless of its
15 organizational structure), "clinic", "provider", "practice", "veterinary
16 provider", and "veterinary practice", means a health care entity involv-
17 ing the practice of veterinary medicine, as defined by section sixty-
18 seven hundred one of the education law, including small practices,
19 groups, or management services organizations or similar entities provid-
20 ing all or substantially all of the administrative or management
21 services under contract with one or more veterinary or medical prac-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11436-04-6
A. 9042--A 2
1 tices. For the purposes of this section, "veterinary clinic" shall
2 include professional services corporations incorporated for the purpose
3 of practicing veterinary medicine or overseeing the operations thereof.
4 2. "Against the public interest" means an action where the effect of a
5 transaction includes, as determined by the attorney general, any of the
6 following impacts:
7 (a) reduced competition or increased costs for veterinary care to pet
8 owners;
9 (b) unfair methods of competition or deceptive acts or practices in or
10 affecting veterinary care commerce;
11 (c) reduced quality of care including, but not limited to, care which
12 is not the standard of care or care which is not in the best interests
13 of such provider's patients;
14 (d) reduced access to or availability of veterinary care for pet
15 owners; or
16 (e) reduced access to care in a rural, low-income or disadvantaged
17 community.
18 3. "Material amount" means an amount equal to two hundred thousand
19 dollars or more.
20 4. "Material change" means any of the following:
21 (a) the sale, transfer, lease, or other encumbrance of a material
22 amount of a veterinary clinic's assets or operations, including real
23 property, employment groups, emergency rooms, or other clinic units;
24 (b) a merger, an acquisition, or a contracting affiliation with anoth-
25 er vet clinic or provider organization; or
26 (c) a capital distribution or similar reduction of a veterinary clin-
27 ic's equity capital by a material amount or the incursion of an obli-
28 gation that commits the veterinary clinic to make a capital distribution
29 or similar reduction of equity by a material amount.
30 5. "Merger" means a consolidation of two or more organizations,
31 including two or more organizations joining through a common parent
32 organization, or two or more organizations forming a new organization.
33 6. "Control" means the possession, direct or indirect, of the power to
34 direct or cause the direction of the management, administrative func-
35 tions, and policies of a veterinary clinic, whether through the owner-
36 ship of voting securities or rights, either directly or indirectly, by
37 contract alone or as part of a series of transactions (except a commer-
38 cial contract for goods or non-management services) or otherwise; but no
39 entity shall be deemed to control another entity solely by reason of
40 being an officer or director of a health care entity. Control shall be
41 presumed to exist if any person or entity directly or indirectly owns,
42 controls, or holds with the power to vote five percent or more of the
43 voting securities of a veterinary clinic.
44 7. "Acquisition" means an agreement, arrangement, or activity the
45 consummation of which results in a person or entity acquiring direct or
46 indirect control of another person or entity. The term includes the
47 acquisition of voting securities and noncorporate interests, including
48 assets, capital stock or membership interests or equity interests.
49 8. "Contracting affiliation" means the formation of a relationship
50 between two or more entities that permits the entities to negotiate
51 jointly with carriers or third-party administrators over rates for
52 professional medical services or one entity to negotiate on behalf of
53 the other entity with carriers or third-party administrators over rates
54 for professional medical services.
55 9. "Capital distribution" means a payment made, liability incurred, or
56 other consideration given to a person or entity for the purchase, acqui-
A. 9042--A 3
1 sition, redemption, repurchase, payment or retirement of capital stock
2 or other equity interest or as a dividend, return of capital, or other
3 distribution with respect to the capital stock or other equity interest.
4 10. "Negative use restriction" means a covenant, condition, or
5 restriction concerning the use of real property, whether contained in a
6 contract, deed, restrictive covenant, lease, memorandum of lease, or any
7 other recorded or unrecorded instrument, that prohibits or restricts the
8 use of such property as a veterinary clinic.
9 § 441. Disclosure of material changes. Pursuant to this article, the
10 department shall adopt a process for the disclosure and notice of trans-
11 actions involving material changes. The items disclosed shall include
12 the factors listed in section four hundred forty-two of this article.
13 Nothing in this article shall limit or restrict the authority of the
14 superintendent of financial services under article fifteen, sixteen,
15 seventeen, forty-two, forty-three, seventy-one, or seventy-three of the
16 insurance law, or regulations promulgated thereunder.
17 § 442. Notice of material changes; requirements. 1. An acquiring enti-
18 ty shall submit to the department written notice of any transaction
19 involving a material change, with supporting documentation as described
20 in this subdivision and further defined in regulations developed by the
21 department, no later than fourteen days after such transaction has been
22 agreed to and prior to the consummation of all or any portion of such
23 transaction, in the form and manner prescribed by the department. Imme-
24 diately upon the submission to the department, the department shall
25 submit electronic copies of such notice with supporting documentation to
26 the antitrust, health care and charities bureaus of the office of the
27 New York attorney general for the purposes of determining whether such
28 material change is against the public interest pursuant to section four
29 hundred forty-three of this article. Such written notice shall include,
30 but not be limited to:
31 (a) all organic documents, including articles of incorporation,
32 bylaws, shareholder or other voting agreements, operating agreements,
33 and other documents related to governance and ownership of each party;
34 (b) all complete transaction documents with attachments, including
35 collateral or ancillary agreements involving officers, directors, or
36 employees;
37 (c) all documents signed by the principals, or their agents, that are
38 necessary to determine the proposed transaction's effect, if any, on
39 related or subsidiary business entities, whether nonprofit or for
40 profit;
41 (d) any of the following that comprise part or all of the transaction:
42 (i) asset contribution agreements;
43 (ii) operating agreements or management contracts;
44 (iii) all information necessary to evaluate the effects of the trans-
45 action on each component of an integrated delivery system where that
46 transaction involves a veterinary hospital, including any changes in
47 contracts between the integrated delivery system entities and related
48 veterinary groups;
49 (iv) all financial documents of the transaction parties and related
50 entities, where applicable, including audited financial statements,
51 ownership records, business projection data, current capital asset valu-
52 ation data and any records upon which future earnings, existing asset
53 values and fair market value analysis can be based;
54 (v) all fairness opinions and independent valuation reports of the
55 assets and liabilities of the parties, prepared by or on behalf of the
56 parties;
A. 9042--A 4
1 (vi) all relevant contracts that may affect value, including, but not
2 limited to, business and employee contracts, such as buy-out provisions,
3 profit sharing agreements, and severance packages;
4 (vii) all information and representations disclosing related party
5 transactions that are necessary to assess whether the transaction is at
6 arm's length or involves self-dealing;
7 (viii) all documents relating to noncash elements of the transaction,
8 including, but not limited to, pertinent valuations of security for
9 loans and stock restrictions or partner interest or membership interest
10 restrictions;
11 (ix) all tax-related information, including, but not limited to, the
12 existence of tax-free debt subject to redemption and disqualified person
13 transactions yielding tax liability;
14 (x) a list of ongoing litigation, including full court captions,
15 involving the transaction parties or their related entities, which may
16 affect the interests of the parties;
17 (xi) all information in the possession of the transacting parties
18 relative to the perspective of the vet clinic's patient base and commu-
19 nities served, or their representatives;
20 (xii) all information, including internal and external reports and
21 studies, bearing on the effect of the proposed transaction on the avail-
22 ability or accessibility of health care in the affected community;
23 (xiii) organizational charts of the parties to the transaction, as
24 they exist both pre-consummation and post-consummation of the trans-
25 action, detailing the relationship between the principal parties,
26 including any and all subsidiaries and related parties; and
27 (xiv) all additional documents that the attorney general deems neces-
28 sary or appropriate for review purposes;
29 (e) a statement as to whether any party to the transaction, or a
30 controlling person or parent company of such party, owns any other
31 health care entity which, in the past three years, has closed oper-
32 ations, is in the process of closing operations, or has experienced a
33 substantial reduction in services provided. The parties shall specif-
34 ically identify the health care entity or entities subject to such
35 closure or substantial service reduction and detail the circumstances of
36 such; and
37 (f) a statement as to whether a sale-leaseback agreement or mortgage
38 or lease payments or other payments associated with real estate are a
39 component of the proposed transaction and if so, the parties shall
40 provide the proposed sale-leaseback agreement or mortgage, lease, or
41 real estate documents with the notice.
42 2. (a) Except as provided in paragraph (b) of this subdivision,
43 supporting documentation as described in subdivision one of this section
44 shall not be subject to disclosure under article six of the public offi-
45 cers law.
46 (b) After submission to the department of written notice of a trans-
47 action involving a material change pursuant to subdivision one of this
48 section, the department shall post on its website:
49 (i) a summary of the proposed transaction;
50 (ii) an explanation of the groups or individuals likely to be impacted
51 by the transaction;
52 (iii) information about services currently provided by the veterinary
53 clinic, commitments by the veterinary clinic to continue such services,
54 and any services that will be reduced or eliminated; and
55 (iv) details about how to submit comments, in a format that is easy to
56 find and easy to read.
A. 9042--A 5
1 3. An acquiring entity that is a party to a transaction involving a
2 material change shall notify the department upon completion of the tran-
3 saction in the form and manner prescribed by the department.
4 4. Failure to notify the department of a material change under this
5 section shall be subject to civil penalties under section twelve of the
6 public health law. Each day in which the violation continues shall
7 constitute a separate violation.
8 § 443. Acquisitions of veterinary clinics against the public interest
9 prohibited; determination. 1. (a) Except as provided under paragraph (b)
10 of this subdivision, no person or entity shall sell, transfer, lease,
11 exchange, option or otherwise encumber a material amount of a veterinary
12 clinic's assets or operations in a manner that is against the public
13 interest.
14 (b) An action prohibited under subdivision one of this section may be
15 permitted when, as determined by the attorney general, there is no
16 feasible alternative to prevent a veterinary clinic's closure or greater
17 loss of health services.
18 2. (a) Within ninety days after the attorney general has received
19 written notice pursuant to subdivision one of section four hundred
20 forty-two of this article, the attorney general shall determine and
21 notify affected parties whether the proposed agreement or transaction is
22 against the public interest.
23 (b) If the attorney general determines that the proposed agreement or
24 transaction is against the public interest pursuant to paragraph (a) of
25 this subdivision, the attorney general may commence an action in a court
26 of competent jurisdiction to enjoin the agreement or transaction if the
27 parties do not voluntarily terminate the agreement or transaction.
28 (c) In the event that the attorney general does not make any determi-
29 nation pursuant to this subdivision within ninety days, or ninety days
30 plus any time such period is paused pursuant to subdivision three of
31 this section, the parties may proceed with the transaction; provided,
32 however, that the lack of determination shall not be construed as any
33 ruling or determination if such sale goes against the public interest.
34 3. The attorney general, during the ninety-day determination period
35 set forth in subdivision two of this section, may require the submission
36 of additional information or documentary material from an entity
37 required to file notification under this article, or from any officer,
38 director, partner, agent or employee of such entity, as the attorney
39 general deems necessary. In the event additional documentation is
40 requested, the ninety-day period for the attorney general to make their
41 determination shall be paused and shall re-commence after receipt of
42 such requested additional information or documentary material.
43 4. The attorney general may conduct one or more public hearings on the
44 proposed agreement or transaction, as necessary, to make a determination
45 pursuant to this section.
46 § 444. Negative use restrictions. A private agreement that imposes a
47 negative use restriction upon real property in this state so as to
48 prohibit or restrict the use of such real property as a veterinary clin-
49 ic when such use would otherwise be permitted under applicable land use
50 ordinances, including as a conditional use, shall be against public
51 policy, prohibited, void and unenforceable. It shall be unlawful for any
52 person to enter into an agreement prohibited by this section, or for any
53 person who is the beneficiary of a negative use restriction imposed by
54 an agreement agreed to on or after the effective date of this section to
55 allow such a restriction to remain or to refuse to release such a
56 restriction.
A. 9042--A 6
1 § 2. This act shall take effect on the ninetieth day after it shall
2 have become a law. Effective immediately, the addition, amendment and/or
3 repeal of any rule or regulation necessary for the implementation of
4 this act on its effective date are authorized to be made and completed
5 on or before such effective date.
