S T A T E O F N E W Y O R K
________________________________________________________________________
3514--B
2019-2020 Regular Sessions
I N A S S E M B L Y
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:
Section 1. Subparagraphs (i) and (ii) of paragraph (b-1) of section
1503 of the business corporation law, as added by chapter 550 of the
laws of 2011, are amended to read as follows:
(i) greater than seventy-five percent of the outstanding shares of
stock of the corporation are owned by design professionals AND AN ESOP
(OR ESOPS) WITH GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S VOTING
TRUSTEES AND GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S COMMITTEE
MEMBERS BEING DESIGN PROFESSIONALS,
(ii) an ESOP, either in part or in its entirety, shall not constitute
part of the greater than seventy-five percent owned by design profes-
sionals UNLESS GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S VOTING
TRUSTEES AND GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S COMMITTEE
MEMBERS ARE DESIGN PROFESSIONALS,
§ 2. Subparagraphs (i) and (ii) of paragraph (b) of section 1507 of
the business corporation law, as added by chapter 550 of the laws of
2011, are amended to read as follows:
(i) greater than seventy-five percent of the outstanding shares of
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
(OR ESOPS) WITH GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S VOTING
TRUSTEES AND GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S COMMITTEE
MEMBERS BEING DESIGN PROFESSIONALS,
(ii) an ESOP, either in part or in its entirety, shall not constitute
part of the greater than seventy-five percent owned by design profes-
sionals UNLESS GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S VOTING
TRUSTEES AND GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S COMMITTEE
MEMBERS ARE DESIGN PROFESSIONALS,
§ 3. Subparagraph (i) of paragraph (b) of section 1514 of the business
corporation law, as added by chapter 550 of the laws of 2011, is amended
to read as follows:
(i) greater than seventy-five percent of the outstanding shares of
stock of the corporation are and were owned by design professionals AND
AN ESOP (OR ESOPS) WITH GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S
VOTING TRUSTEES AND GREATER THAN SEVENTY-FIVE PERCENT OF THE PLAN'S
COMMITTEE MEMBERS BEING DESIGN PROFESSIONALS,
§ 4. Paragraph (a) of section 1505 of the business corporation law, as
amended by chapter 550 of the laws of 2011, is amended to read as
follows:
(a) (I) Each shareholder, employee or agent of a professional service
corporation and a design professional service corporation shall be
personally and fully liable and accountable for any negligent or wrong-
ful act or misconduct committed by him or by any person under his direct
supervision and control while rendering professional services on behalf
of such corporation.
(II) AN EMPLOYEE STOCK OWNERSHIP PLAN OWNING GREATER THAN TWENTY-FIVE
PERCENT OF THE OUTSTANDING SHARES OF A DESIGN PROFESSIONAL SERVICE
CORPORATION ORGANIZED UNDER PARAGRAPH (B-1) OF SECTION FIFTEEN HUNDRED
THREE OF THIS ARTICLE SHALL BE UNDER THE SUPERVISION OF THE REGENTS OF
THE UNIVERSITY OF THE STATE OF NEW YORK AND BE SUBJECT TO DISCIPLINARY
PROCEEDINGS AND PENALTIES, AND ITS AUTHORITY TO HOLD SHARES OF SUCH
CORPORATION SHALL BE SUBJECT TO SUSPENSION, REVOCATION OR ANNULMENT FOR
CAUSE, IN THE SAME MANNER AND TO THE SAME EXTENT AS IS PROVIDED WITH
RESPECT TO INDIVIDUALS AND THEIR LICENSES, CERTIFICATES, AND REGISTRA-
TIONS IN TITLE EIGHT OF THE EDUCATION LAW RELATING TO THE APPLICABLE
PROFESSION.
§ 5. Subparagraphs (v) and (vi) of paragraph (b-1) of section 1503 of
the business corporation law, as added by chapter 550 of the laws of
2011, are amended and a new subparagraph (vii) is added to read as
follows:
(v) the president, the chairperson of the board of directors and the
chief executive officer or officers are design professionals, [and]
(vi) the single largest shareholder is either a design professional or
an ESOP with greater than seventy-five percent of the plan's voting
trustees being design professionals and greater than seventy-five
percent of the plan's committee members being design professionals[.],
AND
(VII) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, NOT LESS THAN FIVE
PERCENT OF THE OUTSTANDING SHARES OF STOCK OF THE CORPORATION SHALL BE
OWNED BY DESIGN PROFESSIONALS.
§ 6. Subparagraphs (v) and (vi) of paragraph (b) of section 1507 of
the business corporation law, as added by chapter 550 of the laws of
2011, are amended and a new subparagraph (vii) is added to read as
follows:
(v) the president, the chairperson of the board of directors and the
chief executive officer or officers are design professionals, [and]
A. 3514--B 3
(vi) the single largest shareholder is either a design professional or
an ESOP with greater than seventy-five percent of the plan's voting
trustees being design professionals and greater than seventy-five
percent of the plan's committee members being design professionals[.],
AND
(VII) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, NOT LESS THAN FIVE
PERCENT OF THE OUTSTANDING SHARES OF STOCK OF THE CORPORATION SHALL BE
OWNED BY DESIGN PROFESSIONALS.
§ 7. Subparagraphs (iv) and (v) of paragraph (b) of section 1514 of
the business corporation law, as added by chapter 550 of the laws of
2011, are amended and a new subparagraph (vi) is added to read as
follows:
(iv) the president, the chairperson of the board of directors and the
chief executive officer or officers are and were design professionals,
[and]
(v) the single largest shareholder is and was either a design profes-
sional or an ESOP with greater than seventy-five percent of the plan's
voting trustees being design professionals and greater than seventy-five
percent of the plan's committee members being design professionals[.],
AND
(VI) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, NOT LESS THAN FIVE
PERCENT OF THE OUTSTANDING SHARES OF STOCK OF THE CORPORATION ARE AND
WERE OWNED BY DESIGN PROFESSIONALS.
§ 8. This act shall take effect immediately.