S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2709--A
     Cal. No. 209
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             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:
 
   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
 (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.
                                                            LBD03292-05-0

 S. 2709--A                          2
 
 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. This act shall take effect immediately.