Bill Text: NY A03514 | 2019-2020 | General Assembly | Amended


Bill Title: Provides for expanded ownership in design professional corporations by employee stock ownership plans and non-licensed employees.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2020-03-12 - print number 3514b [A03514 Detail]

Download: New_York-2019-A03514-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         3514--B

                               2019-2020 Regular Sessions

                   IN ASSEMBLY

                                    January 29, 2019
                                       ___________

        Introduced  by  M.  of A. LUPARDO, SCHIMMINGER, THIELE, JOHNS, SANTABAR-
          BARA, MANKTELOW -- Multi-Sponsored by -- M. of A.  CROUCH,  McDONOUGH,
          B. MILLER  -- read once and referred to the Committee on Higher Educa-
          tion -- recommitted to the Committee on Higher Education in accordance
          with Assembly Rule 3, sec. 2 -- committee  discharged,  bill  amended,
          ordered  reprinted  as  amended  and  recommitted to said committee --
          again reported from said committee with amendments, ordered  reprinted
          as amended and recommitted to said committee

        AN  ACT  to amend the business corporation law, in relation to providing
          for expanded ownership in design professional corporations by employee
          stock ownership plans and non-licensed employees

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subparagraphs  (i) and (ii) of paragraph (b-1) of section
     2  1503 of the business corporation law, as added by  chapter  550  of  the
     3  laws of 2011, are amended to read as follows:
     4    (i)  greater  than  seventy-five  percent of the outstanding shares of
     5  stock of the corporation are owned by design professionals and  an  ESOP
     6  (or  ESOPs)  with greater than seventy-five percent of the plan's voting
     7  trustees and greater than seventy-five percent of the  plan's  committee
     8  members being design professionals,
     9    (ii)  an ESOP, either in part or in its entirety, shall not constitute
    10  part of the greater than seventy-five percent owned  by  design  profes-
    11  sionals  unless  greater  than seventy-five percent of the plan's voting
    12  trustees and greater than seventy-five percent of the  plan's  committee
    13  members are design professionals,
    14    §  2.  Subparagraphs  (i) and (ii) of paragraph (b) of section 1507 of
    15  the business corporation law, as added by chapter 550  of  the  laws  of
    16  2011, are amended to read as follows:
    17    (i)  greater  than  seventy-five  percent of the outstanding shares of
    18  stock of the corporation are owned by design professionals and  an  ESOP

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03292-12-0

        A. 3514--B                          2

     1  (or  ESOPs)  with greater than seventy-five percent of the plan's voting
     2  trustees and greater than seventy-five percent of the  plan's  committee
     3  members being design professionals,
     4    (ii)  an ESOP, either in part or in its entirety, shall not constitute
     5  part of the greater than seventy-five percent owned  by  design  profes-
     6  sionals  unless  greater  than seventy-five percent of the plan's voting
     7  trustees and greater than seventy-five percent of the  plan's  committee
     8  members are design professionals,
     9    § 3. Subparagraph (i) of paragraph (b) of section 1514 of the business
    10  corporation law, as added by chapter 550 of the laws of 2011, is amended
    11  to read as follows:
    12    (i)  greater  than  seventy-five  percent of the outstanding shares of
    13  stock of the corporation are and were owned by design professionals  and
    14  an  ESOP (or ESOPs) with greater than seventy-five percent of the plan's
    15  voting trustees and greater than  seventy-five  percent  of  the  plan's
    16  committee members being design professionals,
    17    § 4. Paragraph (a) of section 1505 of the business corporation law, as
    18  amended  by  chapter  550  of  the  laws  of 2011, is amended to read as
    19  follows:
    20    (a) (i) Each shareholder, employee or agent of a professional  service
    21  corporation  and  a  design  professional  service  corporation shall be
    22  personally and fully liable and accountable for any negligent or  wrong-
    23  ful act or misconduct committed by him or by any person under his direct
    24  supervision  and control while rendering professional services on behalf
    25  of such corporation.
    26    (ii) An employee stock ownership plan owning greater than  twenty-five
    27  percent  of  the  outstanding  shares  of  a design professional service
    28  corporation organized under paragraph (b-1) of section  fifteen  hundred
    29  three  of  this article shall be under the supervision of the regents of
    30  the university of the state of New York and be subject  to  disciplinary
    31  proceedings  and  penalties,  and  its  authority to hold shares of such
    32  corporation shall be subject to suspension, revocation or annulment  for
    33  cause,  in  the  same  manner and to the same extent as is provided with
    34  respect to individuals and their licenses, certificates,  and  registra-
    35  tions  in  title  eight  of the education law relating to the applicable
    36  profession.
    37    § 5. Subparagraphs (v) and (vi) of paragraph (b-1) of section 1503  of
    38  the  business  corporation  law,  as added by chapter 550 of the laws of
    39  2011, are amended and a new subparagraph  (vii)  is  added  to  read  as
    40  follows:
    41    (v)  the  president, the chairperson of the board of directors and the
    42  chief executive officer or officers are design professionals, [and]
    43    (vi) the single largest shareholder is either a design professional or
    44  an ESOP with greater than seventy-five  percent  of  the  plan's  voting
    45  trustees  being  design  professionals  and  greater  than  seventy-five
    46  percent of the plan's committee members being  design  professionals[.],
    47  and
    48    (vii)  notwithstanding  any other provision of law, not less than five
    49  percent of the outstanding shares  of stock of the corporation shall  be
    50  owned by design professionals.
    51    §  6.  Subparagraphs  (v) and (vi) of paragraph (b) of section 1507 of
    52  the business corporation law, as added by chapter 550  of  the  laws  of
    53  2011,  are  amended  and  a  new  subparagraph (vii) is added to read as
    54  follows:
    55    (v) the president, the chairperson of the board of directors  and  the
    56  chief executive officer or officers are design professionals, [and]

        A. 3514--B                          3

     1    (vi) the single largest shareholder is either a design professional or
     2  an  ESOP  with  greater  than  seventy-five percent of the plan's voting
     3  trustees  being  design  professionals  and  greater  than  seventy-five
     4  percent  of  the plan's committee members being design professionals[.],
     5  and
     6    (vii)  notwithstanding  any other provision of law, not less than five
     7  percent of the outstanding shares of stock of the corporation  shall  be
     8  owned by design professionals.
     9    §  7.  Subparagraphs  (iv) and (v) of paragraph (b) of section 1514 of
    10  the business corporation law, as added by chapter 550  of  the  laws  of
    11  2011,  are  amended  and  a  new  subparagraph  (vi) is added to read as
    12  follows:
    13    (iv) the president, the chairperson of the board of directors and  the
    14  chief  executive  officer or officers are and were design professionals,
    15  [and]
    16    (v) the single largest shareholder is and was either a design  profes-
    17  sional  or  an ESOP with greater than seventy-five percent of the plan's
    18  voting trustees being design professionals and greater than seventy-five
    19  percent of the plan's committee members being  design  professionals[.],
    20  and
    21    (vi)  notwithstanding  any  other provision of law, not less than five
    22  percent of the outstanding shares of stock of the  corporation  are  and
    23  were owned by design professionals.
    24    § 8. This act shall take effect immediately.
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