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S05261 Summary:

S05261 Actions:

S05261 Committee Votes:

S05261 Floor Votes:

S05261 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         5261--B
            Cal. No. 331
 
                               2021-2022 Regular Sessions
 
                    IN SENATE
 
                                      March 1, 2021
                                       ___________
 
        Introduced by Sens. KENNEDY, GALLIVAN, HELMING -- read twice and ordered
          printed,  and  when printed to be committed to the Committee on Corpo-
          rations, Authorities and Commissions -- recommitted to  the  Committee
          on Corporations, Authorities and Commissions in accordance with Senate
          Rule  6,  sec. 8 -- reported favorably from said committee, ordered to
          first report, amended on first report, ordered to a second report  and
          ordered  reprinted,  retaining its place in the order of second report
          -- ordered to second report, ordered to a  third  reading,  passed  by
          Senate  and  delivered  to  the Assembly, recalled, vote reconsidered,
          restored to 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 or 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 or greater than seventy-five percent of  the  plan's  committee
    13  members are design professionals,

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02875-11-2
        S. 5261--B                          2
 
     1    §  2.  Subparagraphs  (i) and (ii) of paragraph (b) of section 1507 of
     2  the business corporation law, as added by chapter 550  of  the  laws  of
     3  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 or 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 or greater than seventy-five percent of  the  plan's  committee
    13  members are design professionals,
    14    § 3. Subparagraph (i) of paragraph (b) of section 1514 of the business
    15  corporation law, as added by chapter 550 of the laws of 2011, is amended
    16  to read as follows:
    17    (i)  greater  than  seventy-five  percent of the outstanding shares of
    18  stock of the corporation are and were owned by design professionals  and
    19  an  ESOP (or ESOPs) with greater than seventy-five percent of the plan's
    20  voting trustees or greater  than  seventy-five  percent  of  the  plan's
    21  committee members being design professionals,
    22    § 4. Paragraph (a) of section 1505 of the business corporation law, as
    23  amended  by  chapter  550  of  the  laws  of 2011, is amended to read as
    24  follows:
    25    (a) (i) Each shareholder, employee or agent of a professional  service
    26  corporation  and  a  design  professional  service  corporation shall be
    27  personally and fully liable and accountable for any negligent or  wrong-
    28  ful act or misconduct committed by him or by any person under his direct
    29  supervision  and control while rendering professional services on behalf
    30  of such corporation.
    31    (ii) An employee stock ownership plan owning greater than  twenty-five
    32  percent  of  the  outstanding  shares  of  a design professional service
    33  corporation organized under paragraph (b-1) of section  fifteen  hundred
    34  three  of  this article shall be under the supervision of the regents of
    35  the university of the state of New York, shall register with  the  state
    36  education  department  and  shall  be issued a certificate granting such
    37  employee stock ownership plan the  authority  to  hold  shares  of  such
    38  corporation.   Such certificate shall be subject to professional miscon-
    39  duct provisions as set forth in article one hundred thirty of the educa-
    40  tion law. In addition, the failure to maintain  an  active  registration
    41  with  the state education department shall also subject such certificate
    42  to discipline as provided above. The secretary of  state  shall  be  the
    43  designated  agent  for  service  of  process  in any disciplinary matter
    44  involving a registered employee stock ownership plan.
    45    (iii) Any such employee stock ownership plan shall not  influence,  or
    46  attempt  to  influence,  any decisions that fall within a design profes-
    47  sional's scope of practice.
    48    § 5. This act shall take effect two years after it shall have become a
    49  law.