Bill Text: NY S02709 | 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: (Engrossed - Dead) 2020-07-21 - referred to higher education [S02709 Detail]
Download: New_York-2019-S02709-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 2709--A Cal. No. 209 2019-2020 Regular Sessions IN SENATE January 29, 2019 ___________ Introduced by Sens. KENNEDY, HELMING -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions -- recommitted to the Committee on Corpo- rations, Authorities and Commissions in accordance with Senate Rule 6, sec. 8 -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading 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 19 (or ESOPs) with greater than seventy-five percent of the plan's voting EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03292-05-0S. 2709--A 2 1 trustees and greater than seventy-five percent of the plan's committee 2 members being design professionals, 3 (ii) an ESOP, either in part or in its entirety, shall not constitute 4 part of the greater than seventy-five percent owned by design profes- 5 sionals unless greater than seventy-five percent of the plan's voting 6 trustees and greater than seventy-five percent of the plan's committee 7 members are design professionals, 8 § 3. Subparagraph (i) of paragraph (b) of section 1514 of the business 9 corporation law, as added by chapter 550 of the laws of 2011, is amended 10 to read as follows: 11 (i) greater than seventy-five percent of the outstanding shares of 12 stock of the corporation are and were owned by design professionals and 13 an ESOP (or ESOPs) with greater than seventy-five percent of the plan's 14 voting trustees and greater than seventy-five percent of the plan's 15 committee members being design professionals, 16 § 4. Paragraph (a) of section 1505 of the business corporation law, as 17 amended by chapter 550 of the laws of 2011, is amended to read as 18 follows: 19 (a) (i) Each shareholder, employee or agent of a professional service 20 corporation and a design professional service corporation shall be 21 personally and fully liable and accountable for any negligent or wrong- 22 ful act or misconduct committed by him or by any person under his direct 23 supervision and control while rendering professional services on behalf 24 of such corporation. 25 (ii) An employee stock ownership plan owning greater than twenty-five 26 percent of the outstanding shares of a design professional service 27 corporation organized under paragraph (b-1) of section fifteen hundred 28 three of this article shall be under the supervision of the regents of 29 the university of the state of New York and be subject to disciplinary 30 proceedings and penalties, and its authority to hold shares of such 31 corporation shall be subject to suspension, revocation or annulment for 32 cause, in the same manner and to the same extent as is provided with 33 respect to individuals and their licenses, certificates, and registra- 34 tions in title eight of the education law relating to the applicable 35 profession. 36 § 5. Subparagraphs (v) and (vi) of paragraph (b-1) of section 1503 of 37 the business corporation law, as added by chapter 550 of the laws of 38 2011, are amended and a new subparagraph (vii) is added to read as 39 follows: 40 (v) the president, the chairperson of the board of directors and the 41 chief executive officer or officers are design professionals, [and] 42 (vi) the single largest shareholder is either a design professional or 43 an ESOP with greater than seventy-five percent of the plan's voting 44 trustees being design professionals and greater than seventy-five 45 percent of the plan's committee members being design professionals[.], 46 and 47 (vii) notwithstanding any other provision of law, not less than five 48 percent of the outstanding shares of stock of the corporation shall be 49 owned by design professionals. 50 § 6. This act shall take effect immediately.
