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.
