S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2898

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 24, 2013
                               ___________

Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
  printed to be committed to the Committee on Corporations,  Authorities
  and Commissions

AN  ACT  to  amend  the  business corporation law, in relation to design
  professional service corporations

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 1501 of the business corporation law, as amended by
chapter 550 of the laws of 2011, is amended to read as follows:
[S 1501. Definitions.
  As  used  in  this article, unless the context otherwise requires, the
term: (a) "licensing authority" means the regents of the  university  of
the state of New York or the state education department, as the case may
be,  in  the  case  of all professions licensed under title eight of the
education law, and the appropriate appellate  division  of  the  supreme
court in the case of the profession of law.
  (b) "Profession"  includes  any practice as an attorney and counselor-
at-law, or as a licensed physician, and those occupations designated  in
title eight of the education law.
  (c) "Professional  service"  means  any  type of service to the public
which may be lawfully rendered by a member of a  profession  within  the
purview of his profession.
  (d) "Professional  service  corporation" means a corporation organized
under this article.
  (e) "Design professional  service  corporation"  means  a  corporation
organized under this article practicing professional engineering, archi-
tecture,  landscape  architecture,  or land surveying, or practicing any
combination of such professions, first organized  on  or  after  January
first, two thousand twelve. The provisions of this article applicable to
professional  service  corporations  shall  apply to design professional
service corporations except to the extent that any provision  is  either

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04914-01-3
              

S. 2898                             2

inconsistent  with a provision expressly applying to design professional
service corporations or not relevant thereto.
  (f)  "Design professional" means an individual licensed and registered
pursuant to title eight of the education law  to  practice  professional
engineering, architecture, landscape architecture or land surveying.
  (g)  "Employee  stock  ownership plan" (ESOP) means a defined contrib-
ution plan established pursuant to Section 4975(e)(7)  of  the  Internal
Revenue Code.
  (h) "Officer" does not include the secretary or an assistant secretary
of a corporation having only one shareholder.]
  S 2. Section 1501 of the business corporation law, as amended by chap-
ter 564 of the laws of 2011, is amended to read as follows:
S 1501. Definitions.
  As  used  in  this article, unless the context otherwise requires, the
term: (a) "licensing authority" means the regents of the  university  of
the state of New York or the state education department, as the case may
be,  in  the  case  of all professions licensed under title eight of the
education law, and the appropriate appellate  division  of  the  supreme
court in the case of the profession of law.
  (b) "Profession"  includes  any practice as an attorney and counselor-
at-law, or as a licensed physician, and those occupations designated  in
title eight of the education law.
  (c) "Professional  service"  means  any  type of service to the public
which may be lawfully rendered by a member of a  profession  within  the
purview of his or her profession.
  (d) "Professional  service  corporation" means a corporation organized
under this article.
  (e) "Officer" does not include the secretary or an assistant secretary
of a corporation having only one shareholder.
  (f) "Other business entity" means any  person  other  than  a  natural
person,  general  partnership  or  a domestic or foreign business corpo-
ration, and includes a professional service  limited  liability  company
formed  pursuant  to  the  provisions  of the New York limited liability
company law.
  (G) "DESIGN PROFESSIONAL  SERVICE  CORPORATION"  MEANS  A  CORPORATION
ORGANIZED UNDER THIS ARTICLE PRACTICING PROFESSIONAL ENGINEERING, ARCHI-
TECTURE,  LANDSCAPE  ARCHITECTURE,  OR LAND SURVEYING, OR PRACTICING ANY
COMBINATION OF SUCH PROFESSIONS. THE PROVISIONS OF THIS ARTICLE APPLICA-
BLE TO PROFESSIONAL SERVICE CORPORATIONS SHALL APPLY TO  DESIGN  PROFES-
SIONAL  SERVICE  CORPORATIONS EXCEPT TO THE EXTENT THAT ANY PROVISION IS
EITHER INCONSISTENT  WITH  A  PROVISION  EXPRESSLY  APPLYING  TO  DESIGN
PROFESSIONAL SERVICE CORPORATIONS OR NOT RELEVANT THERETO.
  (H)  "DESIGN PROFESSIONAL" MEANS AN INDIVIDUAL LICENSED AND REGISTERED
PURSUANT TO TITLE EIGHT OF THE EDUCATION LAW  TO  PRACTICE  PROFESSIONAL
ENGINEERING, ARCHITECTURE, LANDSCAPE ARCHITECTURE OR LAND SURVEYING.
  (I)  "EMPLOYEE  STOCK  OWNERSHIP PLAN" (ESOP) MEANS A DEFINED CONTRIB-
UTION PLAN ESTABLISHED PURSUANT TO SECTION 4975(E)(7)  OF  THE  INTERNAL
REVENUE CODE.
  S  3. Paragraph (b-5) of section 1503 of the business corporation law,
as added by chapter 467 of the laws of  2012,  is  amended  to  read  as
follows:
  (b-5) On or after January first, two thousand twelve, the state educa-
tion  department  and  the  department  of state shall allow an existing
professional service corporation [in good standing] ORGANIZED UNDER THIS
ARTICLE AND PRACTICING PROFESSIONAL ENGINEERING, ARCHITECTURE, LANDSCAPE
ARCHITECTURE, OR LAND SURVEYING, OR PRACTICING ANY COMBINATION  OF  SUCH

S. 2898                             3

PROFESSIONS  to [convert to] BECOME a design professional service corpo-
ration as defined in this article, provided  the  [design]  professional
service  corporation  meets  all  of the requirements to become a design
professional service corporation, including that its name shall end with
the   words   "design  professional  corporation"  or  the  abbreviation
"D.P.C.", BY AMENDING  ITS  CERTIFICATE  OF  INCORPORATION  SO  THAT  IT
CONTAINS THE FOLLOWING STATEMENTS:
  (1)  THE NAMES AND RESIDENCE ADDRESSES OF ALL INDIVIDUALS OR ESOPS WHO
WILL BE THE SHAREHOLDERS, DIRECTORS AND OFFICERS OF THE ORIGINAL  DESIGN
PROFESSIONAL SERVICE CORPORATION; AND
  (2)  THE  PROFESSION  OR PROFESSIONS OF EACH SHAREHOLDER, DIRECTOR AND
OFFICER WHO IS A DESIGN PROFESSIONAL OF THE ORIGINAL DESIGN PROFESSIONAL
SERVICE CORPORATION; AND
  (3) THE OWNERSHIP INTEREST OF EACH SHAREHOLDER OF THE ORIGINAL  DESIGN
PROFESSIONAL SERVICE CORPORATION; AND
  (4) THE NAMES OF THE OFFICERS AND DIRECTORS WHO WILL BE THE PRESIDENT,
THE  CHAIRPERSON OF THE BOARD OF DIRECTORS AND THE CHIEF EXECUTIVE OFFI-
CER OR OFFICERS OF THE ORIGINAL DESIGN PROFESSIONAL SERVICE CORPORATION.
  (I) THE CERTIFICATE OF AMENDMENT SHALL HAVE ATTACHED THERETO A CERTIF-
ICATE OR CERTIFICATES ISSUED BY THE LICENSING AUTHORITY CERTIFYING  THAT
EACH  OF THE PROPOSED SHAREHOLDERS, DIRECTORS AND OFFICERS WHO IS LISTED
AS A DESIGN PROFESSIONAL IS AUTHORIZED BY LAW TO PRACTICE  A  PROFESSION
WHICH  THE CORPORATION IS ORGANIZED TO PRACTICE AND, IF APPLICABLE, THAT
ONE OR MORE OF SUCH INDIVIDUALS IS AUTHORIZED TO PRACTICE  EACH  PROFES-
SION  WHICH THE CORPORATION WILL BE AUTHORIZED TO PRACTICE. THE ATTACHED
CERTIFICATE OR CERTIFICATES SHALL ALSO CERTIFY THAT THE PROPOSED  PRESI-
DENT,  THE CHAIRPERSON OF THE BOARD OF DIRECTORS AND THE CHIEF EXECUTIVE
OFFICER OR OFFICERS ARE AUTHORIZED BY LAW TO PRACTICE A PROFESSION WHICH
THE CORPORATION IS ORGANIZED TO PRACTICE.
  (II) THE CERTIFICATE OF AMENDMENT SHALL ALSO HAVE ATTACHED  THERETO  A
CERTIFICATE OR CERTIFICATES ISSUED BY THE LICENSING AUTHORITY CERTIFYING
THAT  EACH  OF THE PROPOSED SHAREHOLDERS, OFFICERS, DIRECTORS AND OWNERS
LISTED HAVE BEEN DEEMED TO HAVE BEEN OF GOOD MORAL CHARACTER AS  MAY  BE
ESTABLISHED BY THE REGULATIONS OF THE COMMISSIONER OF EDUCATION.
  (III)  THE  CERTIFICATE OF AMENDMENT SHALL ALSO HAVE ATTACHED THERETO:
(A) A TAX CLEARANCE ISSUED BY THE DEPARTMENT  OF  TAXATION  AND  FINANCE
CERTIFYING THAT THE EXISTING PROFESSIONAL SERVICE CORPORATION IS CURRENT
WITH  RESPECT  TO PAYMENT OF ITS STATE TAX LIABILITIES AND (B) A CERTIF-
ICATE OF GOOD STANDING FROM THE STATE  EDUCATION  DEPARTMENT  CERTIFYING
THAT  THE  EXISTING  PROFESSIONAL  SERVICE  CORPORATION IS AUTHORIZED TO
PROVIDE PROFESSIONAL SERVICES WITHOUT RESTRICTION.
  S 4. This act shall take effect immediately and  shall  be  deemed  to
have been in full force and effect on and after October 3, 2012.