S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5191--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 6, 2017
                                ___________
 
 Introduced  by  M. of A. RYAN -- read once and referred to the Committee
   on Labor -- committee discharged, bill amended, ordered  reprinted  as
   amended and recommitted to said committee
 
 AN  ACT to amend the education law, in relation to employee-owned enter-
   prises; to amend the cooperative  corporations  law,  in  relation  to
   creating  an  advisory  panel on the viability of increasing employee-
   owned enterprises; and to amend the tax law, in relation to a  capital
   gains exemption
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Paragraph (a) of subdivision 4  of  section  3032  of  the
 education law, as amended by chapter 683 of the laws of 1986, is amended
 to read as follows:
   (a)  Employer specific skill training grant programs shall be designed
 to support, supplement and contribute to the expansion  and  maintenance
 of the economy of the state. Local education agencies shall apply to the
 commissioner  for grants for conducting employer specific skill training
 programs. Application for funds by local education agencies for training
 programs shall be in a manner consistent with  the  application  process
 for  business  and  industry  specific training programs under the voca-
 tional education act of 1963 and the job training partnership  act;  the
 sum of such grants per region shall not exceed the total funds allocated
 or  reallocated  to  the  region  for such purposes. Such programs shall
 provide retraining and upgrading to existing or potential  personnel  in
 order  to improve technology, quality control, production efficiency, or
 to adapt to other changes in the labor  market,  or  to  provide  unique
 training  programs  to  meet  the  emerging needs and occupations of the
 state's business and industry or providing training  to  individuals  to
 promote  the  successful  management  and/or  operation  of  [a business
 purchased by such individuals to provide for their continued  employment
 through the formation of a worker owned cooperative or an employee stock

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

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 A. 5191--A                          2

 ownership  plan]  EMPLOYEE-OWNED  ENTERPRISES, AS DEFINED BY SUBDIVISION
 FIVE OF SECTION EIGHTEEN HUNDRED THIRTY-SIX-B OF THE PUBLIC  AUTHORITIES
 LAW,  BY  SUCH  EMPLOYEES. No grant shall exceed fifty per centum of the
 total  program  cost.  Eligible  program cost may include employer wages
 paid to the employee for time spent in the training program.    Applica-
 tions  for  a  grant  by  local  education  agencies  shall be in a form
 prescribed by the commissioner.
   § 2. The cooperative corporations law  is  amended  by  adding  a  new
 section 95 to read as follows:
   §  95. ADVISORY PANEL ON VIABILITY OF INCREASING EMPLOYEE-OWNED ENTER-
 PRISES. 1. AN ADVISORY PANEL IS HEREBY CREATED UNDER THE  DEPARTMENT  OF
 LABOR  TO INVESTIGATE HOW THE NUMBER OF WORKER COOPERATIVES AND EMPLOYEE
 STOCK OWNERSHIP PLANS CAN BE INCREASED TO HELP KEEP  LOCAL  JOBS  WITHIN
 THE  STATE. THE ADVISORY PANEL SHALL ALSO STUDY THE POSSIBILITY OF FUND-
 ING A STATE CENTER FOR DEMOCRATIC EMPLOYEE OWNERSHIP THROUGH SECTION ONE
 HUNDRED FOUR-A OF THE ECONOMIC DEVELOPMENT  LAW,  TO  PROMOTE  EMPLOYEE-
 OWNED BUSINESSES, PROVIDE ASSISTANCE TO NEW COMPANIES, FACILITATE TRANS-
 FERS FROM RETIRING BUSINESS OWNERS TO NEW EMPLOYEE-OWNED ENTERPRISES, AS
 DEFINED  BY SUBDIVISION FIVE OF SECTION EIGHTEEN HUNDRED THIRTY-SIX-B OF
 THE PUBLIC AUTHORITIES LAW, AND PROVIDE TRAINING TO EMPLOYEES OF  WORKER
 COOPERATIVES AND EMPLOYEE STOCK OWNERSHIP PLANS.
   2. SUCH ADVISORY PANEL SHALL BE APPOINTED BY THE COMMISSIONER OF LABOR
 AND  SUCH  COMMISSIONER  SHALL  ESTABLISH  THE NUMBER AND COMPOSITION OF
 INDIVIDUALS TO SERVE ON SUCH ADVISORY PANEL.
   3. SUCH PANEL MEMBERS SHALL SERVE  WITHOUT  COMPENSATION  EXCEPT  THAT
 SUCH MEMBERS SHALL BE ENTITLED TO REIMBURSEMENT FOR ACTUAL AND NECESSARY
 EXPENSES INCURRED IN SUCH SERVICE.
   4.  THE ADVISORY PANEL SHALL MAKE AN ANNUAL UPDATE AND RECOMMENDATIONS
 TO THE SPEAKER OF THE ASSEMBLY, TEMPORARY PRESIDENT OF  THE  SENATE  AND
 THE  GOVERNOR  REGARDING  THE  FINDINGS  OF SUCH INVESTIGATION AND STUDY
 DESCRIBED IN SUBDIVISION ONE OF THIS SECTION.
   § 3. Subsection (c) of section 612 of the tax law is amended by adding
 a new paragraph 42 to read as follows:
   (42) ONE HUNDRED PERCENT OF THE CAPITAL GAINS FROM THE SALE  OF  STOCK
 OR  MEMBER  INTEREST  FROM  A  NEW YORK CORPORATION TO AN EMPLOYEE-OWNED
 ENTERPRISE OR A LIMITED LIABILITY COMPANY,  AS  DEFINED  BY  SUBDIVISION
 FIVE  OF SECTION EIGHTEEN HUNDRED THIRTY-SIX-B OF THE PUBLIC AUTHORITIES
 LAW.  IN ORDER TO QUALIFY FOR SUCH MODIFICATION  AS  DESCRIBED  IN  THIS
 PARAGRAPH, SUCH EMPLOYEE-OWNED ENTERPRISE MUST HAVE ITS COMMERCIAL DOMI-
 CILE IN NEW YORK. IF THE EMPLOYEE-OWNED ENTERPRISE IS AN "EMPLOYEE STOCK
 OWNERSHIP  PLAN,"  IT MUST COMPLY WITH FEDERAL REQUIREMENTS AS SUCH PLAN
 AS DEFINED IN 26 U.S.C. § 4975(E)(7).
   § 4. This act shall take effect immediately.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5191--B
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 6, 2017
                                ___________
 
 Introduced by M. of A. RYAN, MORELLE, ROZIC, BRINDISI, ABINANTI, THIELE,
   SIMON -- read once and referred to the Committee on Labor -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to  said  committee  -- again reported from said committee with amend-
   ments, ordered reprinted as amended and recommitted to said committee

 AN ACT to amend the economic development law, in relation to  establish-
   ing  an  advisory panel on employee-owned enterprises within the divi-
   sion of small business services; and providing for the repeal of  such
   provisions upon expiration thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The economic development law is amended  by  adding  a  new
 section 139 to read as follows:
   §  139.  ADVISORY PANEL ON EMPLOYEE-OWNED ENTERPRISES. 1.  DEFINITION.
 AS USED IN THIS SECTION, THE TERM "EMPLOYEE-OWNED ENTERPRISE" SHALL MEAN
 A BUSINESS IN WHICH THE EMPLOYEES CONTROL THE  MAJORITY  OF  THE  VOTING
 STOCK, OR IF THE BUSINESS IS HELD IN A TRUST WHICH CONTROLS THE MAJORITY
 OF THE VOTING STOCK, THE TRUSTEES ARE ELECTED BY THE EMPLOYEES. THE TERM
 "EMPLOYEE-OWNED  ENTERPRISE" SHALL ALSO REFER TO A WORKER COOPERATIVE AS
 DEFINED IN SECTION EIGHTY-ONE OF THE COOPERATIVE CORPORATIONS LAW.
   2. ESTABLISHMENT OF  ADVISORY  PANEL.  AN  ADVISORY  PANEL  IS  HEREBY
 CREATED  WITHIN  THE  DEPARTMENT FOR THE PURPOSE OF REVIEWING STATE LAWS
 AND PROGRAMS IN ORDER TO REPORT AND MAKE RECOMMENDATIONS ON HOW BEST  TO
 SUPPORT  EXISTING EMPLOYEE-OWNED ENTERPRISES, PROMOTING THE FORMATION OF
 NEW EMPLOYEE-OWNED ENTERPRISES, AND PROMOTING THE  CONTINUED  GROWTH  OF
 SUCH BUSINESSES IN THE STATE.
   3. COMPOSITION OF ADVISORY PANEL. (A) THE ADVISORY PANEL SHALL CONSIST
 OF TWELVE MEMBERS, INCLUDING:
   (I)  THE COMMISSIONER, OR HIS OR HER DESIGNEE, WHO SHALL BE DESIGNATED
 AS CHAIR OF THE ADVISORY PANEL;
   (II) THE COMMISSIONER OF LABOR, OR HIS OR HER DESIGNEE;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD08166-05-7

 A. 5191--B                          2
 
   (III) THE COMMISSIONER OF TAX AND FINANCE, OR HIS OR HER DESIGNEE; AND
   (IV) NINE MEMBERS TO BE APPOINTED AS FOLLOWS: THREE SHALL BE APPOINTED
 BY  THE GOVERNOR, TWO SHALL BE APPOINTED BY THE SPEAKER OF THE ASSEMBLY,
 TWO SHALL BE APPOINTED BY THE TEMPORARY PRESIDENT  OF  THE  SENATE,  ONE
 SHALL BE APPOINTED BY THE MINORITY LEADER OF THE ASSEMBLY, AND ONE SHALL
 BE  APPOINTED  BY  THE  MINORITY  LEADER  OF  THE SENATE. SUCH APPOINTED
 MEMBERS  SHALL  REPRESENT  ENTITIES  AND  ORGANIZATIONS  WITH  EXPERTISE
 RELATED  TO  EMPLOYEE-OWNED ENTERPRISES OR BUSINESS DEVELOPMENT, PARTIC-
 ULARLY THOSE WITH AN EMPHASIS ON SMALL BUSINESSES, MINORITY  AND  WOMEN-
 OWNED  BUSINESSES,  AND  VETERAN-OWNED  BUSINESSES,  INCLUDING,  BUT NOT
 LIMITED TO:
   (1) EMPLOYEE-OWNED ENTERPRISES;
   (2) EMPLOYEE-OWNED ENTERPRISE ADVOCACY, SERVICE, SUPPORT, OR  DEVELOP-
 MENT ORGANIZATIONS;
   (3) BUSINESS DEVELOPMENT ORGANIZATIONS;
   (4)  NEW  YORK STATE COLLEGE AND UNIVERSITY PROGRAMS WITH EXPERTISE IN
 BUSINESS DEVELOPMENT;
   (5) COMMERCIAL LENDING ORGANIZATIONS FOCUSING ON ACCESS TO CAPITAL AND
 COMMUNITY DEVELOPMENT; AND
   (6) LABOR ORGANIZATIONS.
   (B) EACH MEMBER OF THE PANEL  SHALL  SERVE  AT  THE  PLEASURE  OF  THE
 APPOINTING  AUTHORITY,  AND  ANY VACANCY ON THE PANEL SHALL BE FILLED IN
 THE SAME MANNER AS THE ORIGINAL APPOINTMENT. SUCH  PANEL  MEMBERS  SHALL
 SERVE WITHOUT COMPENSATION EXCEPT THAT SUCH MEMBERS SHALL BE ENTITLED TO
 REIMBURSEMENT  FOR  ACTUAL  AND  NECESSARY  EXPENSES  INCURRED  IN  SUCH
 SERVICE.
   4. POWERS AND DUTIES OF THE ADVISORY PANEL. THE ADVISORY PANEL SHALL:
   (A) IDENTIFY AND RECOMMEND STRATEGIES  TO  PROMOTE  THE  CREATION  AND
 DEVELOPMENT  OF  NEW  EMPLOYEE-OWNED  ENTERPRISES IN ORDER TO CREATE NEW
 JOBS AND RETAIN EXISTING JOBS WITHIN THE STATE;
   (B) IDENTIFY AND RECOMMEND STRATEGIES TO FACILITATE  THE  CREATION  OF
 EMPLOYEE-OWNED  ENTERPRISES  THAT  PROMOTE  THE CONTINUATION OF EXISTING
 BUSINESSES EITHER AS PART  OF  A  PRE-EXISTING  BUSINESS  SUCCESSION  OF
 OWNERSHIP  PLAN  OR  AS  AN  ALTERNATIVE  OPTION  IF A BUSINESS IS BEING
 OFFERED FOR SALE OR TRANSFER BY THE CURRENT OWNER OR THE HEIRS OR ESTATE
 OF A DECEASED OWNER;
   (C) EVALUATE THE EFFECTIVENESS OF CURRENT STATE AND LOCAL TRAINING AND
 ASSISTANCE PROGRAMS DESIGNED TO PROVIDE SUPPORT TO EMPLOYEE-OWNED ENTER-
 PRISES, AND MAKE RECOMMENDATIONS AS TO HOW TO MORE  EFFECTIVELY  UTILIZE
 THESE PROGRAMS AND RESOURCES TO SUPPORT SUCH ENTERPRISES;
   (D) EXAMINE AND IDENTIFY STATE AND LOCAL LAWS AND REGULATIONS RELATING
 TO  THE  GOVERNANCE AND ADMINISTRATION OF EMPLOYEE-OWNED ENTERPRISES AND
 THEIR EFFECT ON THE CREATION, RETENTION, AND GROWTH OF SUCH ENTERPRISES;
   (E) EXAMINE AND IDENTIFY OTHER SUCCESSFUL  FEDERAL,  STATE  AND  LOCAL
 PROGRAMS  DESIGNED  TO  PROVIDE  SUPPORT  TO EMPLOYEE-OWNED ENTERPRISES,
 INCLUDING ANY PROGRAMS CURRENTLY UNDERUTILIZED BY INDIVIDUALS SEEKING TO
 ESTABLISH AN EMPLOYEE-OWNED ENTERPRISE IN THE STATE;
   (F) EVALUATE THE ABILITY OF NEW  AND  EXISTING  EMPLOYEE-OWNED  ENTER-
 PRISES  TO  ACQUIRE  THE  CAPITAL NECESSARY TO FORM, EXPAND, AND DEVELOP
 THEIR OPERATIONS;
   (G) EVALUATE THE ROLE OF IMMIGRANTS  AND  NEW  AMERICANS,  MINORITIES,
 WOMEN, AND VETERANS IN THE FORMATION OF EMPLOYEE-OWNED ENTERPRISES;
   (H) EVALUATE THE POTENTIAL FOR EMPLOYEE-OWNED ENTERPRISES TO ASSIST IN
 THE  REVITALIZATION  AND  REDEVELOPMENT  OF  ECONOMICALLY  DISADVANTAGED
 COMMUNITIES; AND

 A. 5191--B                          3
 
   (I) RECOMMEND A SET OF BEST PRACTICES AND  POLICIES  AS  A  GUIDE  FOR
 INDIVIDUALS  TO  USE WHEN FORMING AN EMPLOYEE-OWNED ENTERPRISE, AND MAKE
 SUCH GUIDE PUBLICLY AVAILABLE ON THE DEPARTMENT'S WEBSITE.
   5.  REPORTING.  THE  ADVISORY PANEL SHALL ISSUE A REPORT NO LATER THAN
 SEPTEMBER THIRTIETH, TWO THOUSAND EIGHTEEN OUTLINING  THE  FINDINGS  AND
 RECOMMENDATIONS  OF  THE  PANEL.  THE  REPORT  SHALL BE DELIVERED TO THE
 GOVERNOR, THE SPEAKER OF THE ASSEMBLY, THE TEMPORARY  PRESIDENT  OF  THE
 SENATE,  THE MINORITY LEADER OF THE ASSEMBLY, THE MINORITY LEADER OF THE
 SENATE, THE CHAIR OF THE ASSEMBLY COMMITTEE ON WAYS AND MEANS, THE CHAIR
 OF THE SENATE COMMITTEE ON FINANCE, THE CHAIR OF THE ASSEMBLY  COMMITTEE
 ON  ECONOMIC  DEVELOPMENT,  THE CHAIR OF THE ASSEMBLY COMMITTEE ON SMALL
 BUSINESS, THE CHAIR OF THE SENATE COMMITTEE ON COMMERCE, ECONOMIC DEVEL-
 OPMENT, AND SMALL BUSINESS, THE  CHAIR  OF  THE  ASSEMBLY  COMMITTEE  ON
 LABOR, AND THE CHAIR OF THE SENATE COMMITTEE ON LABOR.
   §  2.  This act shall take effect immediately and shall expire October
 1, 2018 when upon such date the provisions of this act shall  be  deemed
 repealed.