Bill Text: NY S03350 | 2025-2026 | General Assembly | Amended
Bill Title: Authorizes certain licensed health service professionals to form limited liability companies.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2026-03-13 - PRINT NUMBER 3350A [S03350 Detail]
Download: New_York-2025-S03350-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 3350--A 2025-2026 Regular Sessions IN SENATE January 27, 2025 ___________ Introduced by Sen. SCARCELLA-SPANTON -- 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 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the limited liability company law, the business corpo- ration law, the partnership law, the education law and the public health law, in relation to authorizing certain licensed health services professionals to form limited liability companies The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision (a) of section 1203 of the limited liability 2 company law, as amended by chapter 475 of the laws of 2014, is amended 3 to read as follows: 4 (a) Notwithstanding the education law or any other provision of law, 5 one or more professionals each of whom is authorized by law to render a 6 professional service within the state, or one or more professionals, at 7 least one of whom is authorized by law to render a professional service 8 within the state, may form, or cause to be formed, a professional 9 service limited liability company for pecuniary profit under this arti- 10 cle for the purpose of rendering the professional service or services as 11 such professionals are authorized to practice. With respect to a profes- 12 sional service limited liability company formed to provide medical 13 services as such services are defined in article 131 of the education 14 law, each member of such limited liability company must be licensed 15 pursuant to article 131 of the education law to practice medicine in 16 this state. Notwithstanding any other provision of this section, any 17 person licensed pursuant to article 131 of the education law to practice 18 medicine and any person licensed pursuant to articles 132, 137, 140, 19 141, 143, 144, 153, 154, 155, 156, 163, 167 or subdivision 3 of section EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03034-03-6S. 3350--A 2 1 6902 of article 139 of the education law may form, or cause to be 2 formed, a professional service limited liability company to provide 3 multidisciplinary services with one or more licensed professionals, 4 subject to the following conditions: (i) each member of such limited 5 liability company must be licensed pursuant to title eight of the educa- 6 tion law to practice such member's profession in this state; (ii) each 7 member shall only practice such member's profession as specified in such 8 member's respective professional enabling statute under title eight of 9 the education law; and (iii) any clinical integration of professional 10 practices under this section shall not alter, expand or curtail the 11 scope of practice of any of the members; provided further that: (A) no 12 member shall, directly or indirectly, interfere with the clinical judg- 13 ment or legitimate clinical practice of another member; and (B) no 14 member shall order or direct another member to practice beyond the scope 15 of such member's license. With respect to a professional service limited 16 liability company formed to provide dental services as such services are 17 defined in article 133 of the education law, each member of such limited 18 liability company must be licensed pursuant to article 133 of the educa- 19 tion law to practice dentistry in this state. With respect to a profes- 20 sional service limited liability company formed to provide veterinary 21 services as such services are defined in article 135 of the education 22 law, each member of such limited liability company must be licensed 23 pursuant to article 135 of the education law to practice veterinary 24 medicine in this state. With respect to a professional service limited 25 liability company formed to provide professional engineering, land 26 surveying, architectural, landscape architectural and/or geological 27 services as such services are defined in article 145, article 147 and 28 article 148 of the education law, each member of such limited liability 29 company must be licensed pursuant to article 145, article 147 and/or 30 article 148 of the education law to practice one or more of such 31 professions in this state. [With respect to a professional service32limited liability company formed to provide licensed clinical social33work services as such services are defined in article 154 of the educa-34tion law, each member of such limited liability company shall be35licensed pursuant to article 154 of the education law to practice36licensed clinical social work in this state.] With respect to a profes- 37 sional service limited liability company formed to provide creative arts 38 therapy services as such services are defined in article 163 of the 39 education law, each member of such limited liability company must be 40 licensed pursuant to article 163 of the education law to practice crea- 41 tive arts therapy in this state. With respect to a professional service 42 limited liability company formed to provide marriage and family therapy 43 services as such services are defined in article 163 of the education 44 law, each member of such limited liability company must be licensed 45 pursuant to article 163 of the education law to practice marriage and 46 family therapy in this state. With respect to a professional service 47 limited liability company formed to provide mental health counseling 48 services as such services are defined in article 163 of the education 49 law, each member of such limited liability company must be licensed 50 pursuant to article 163 of the education law to practice mental health 51 counseling in this state. With respect to a professional service limited 52 liability company formed to provide psychoanalysis services as such 53 services are defined in article 163 of the education law, each member of 54 such limited liability company must be licensed pursuant to article 163 55 of the education law to practice psychoanalysis in this state. [With56respect to a professional service limited liability company formed toS. 3350--A 3 1provide applied behavior analysis services as such services are defined2in article 167 of the education law, each member of such limited liabil-3ity company must be licensed or certified pursuant to article 167 of the4education law to practice applied behavior analysis in this state.] In 5 addition to engaging in such profession or professions, a professional 6 service limited liability company may engage in any other business or 7 activities as to which a limited liability company may be formed under 8 section two hundred one of this chapter. Notwithstanding any other 9 provision of this section, a professional service limited liability 10 company (i) authorized to practice law may only engage in another 11 profession or business or activities or (ii) which is engaged in a 12 profession or other business or activities other than law may only 13 engage in the practice of law, to the extent not prohibited by any other 14 law of this state or any rule adopted by the appropriate appellate divi- 15 sion of the supreme court or the court of appeals. 16 § 2. Subdivision (b) of section 1207 of the limited liability company 17 law, as amended by chapter 701 of the laws of 2023, is amended to read 18 as follows: 19 (b) With respect to a professional service limited liability company 20 formed to provide medical services as such services are defined in arti- 21 cle 131 of the education law, each member of such limited liability 22 company must be licensed pursuant to article 131 of the education law to 23 practice medicine in this state. Notwithstanding any other provision of 24 this section, any person licensed pursuant to article 131 of the educa- 25 tion law to practice medicine and any person licensed pursuant to arti- 26 cles 132, 137, 140, 141, 143, 144, 153, 154, 155, 156, 163, 167 or 27 subdivision 3 of section 6902 of article 139 of the education law may 28 form, or cause to be formed, a professional service limited liability 29 company to provide multidisciplinary services with one or more licensed 30 professionals, subject to the following conditions: (i) each member of 31 such limited liability company must be licensed pursuant to title eight 32 of the education law to practice such member's profession in this state; 33 (ii) each member shall only practice such member's profession as spec- 34 ified in such member's respective professional enabling statute under 35 title eight of the education law; and (iii) any clinical integration 36 of professional practices under this section shall not alter, expand or 37 curtail the scope of practice of any of the members; provided further 38 that: (A) no member shall, directly or indirectly, interfere with the 39 clinical judgement or legitimate clinical practice of another member; 40 and (B) no member shall order or direct another member to practice 41 beyond the scope of such member's license. With respect to a profes- 42 sional service limited liability company formed to provide dental 43 services as such services are defined in article 133 of the education 44 law, each member of such limited liability company must be licensed 45 pursuant to article 133 of the education law to practice dentistry in 46 this state. With respect to a professional service limited liability 47 company formed to provide veterinary services as such services are 48 defined in article 135 of the education law, each member of such limited 49 liability company must be licensed pursuant to article 135 of the educa- 50 tion law to practice veterinary medicine in this state. With respect to 51 a professional service limited liability company formed to provide 52 professional engineering, land surveying, architectural, landscape 53 architectural and/or geological services as such services are defined in 54 article 145, article 147 and article 148 of the education law, each 55 member of such limited liability company must be licensed pursuant to 56 article 145, article 147 and/or article 148 of the education law toS. 3350--A 4 1 practice one or more of such professions in this state. With respect to 2 a professional service limited liability company formed to provide 3 public accountancy services as such services are defined in article 149 4 of the education law each member of such limited liability company whose 5 principal place of business is in this state and who provides public 6 accountancy services, must be licensed pursuant to article 149 of the 7 education law to practice public accountancy in this state. [With8respect to a professional service limited liability company formed to9provide licensed clinical social work services as such services are10defined in article 154 of the education law, each member of such limited11liability company shall be licensed pursuant to article 154 of the12education law to practice licensed clinical social work in this state.] 13 With respect to a professional service limited liability company formed 14 to provide creative arts therapy services as such services are defined 15 in article 163 of the education law, each member of such limited liabil- 16 ity company must be licensed pursuant to article 163 of the education 17 law to practice creative arts therapy in this state. With respect to a 18 professional service limited liability company formed to provide 19 marriage and family therapy services as such services are defined in 20 article 163 of the education law, each member of such limited liability 21 company must be licensed pursuant to article 163 of the education law to 22 practice marriage and family therapy in this state. With respect to a 23 professional service limited liability company formed to provide mental 24 health counseling services as such services are defined in article 163 25 of the education law, each member of such limited liability company must 26 be licensed pursuant to article 163 of the education law to practice 27 mental health counseling in this state. With respect to a professional 28 service limited liability company formed to provide psychoanalysis 29 services as such services are defined in article 163 of the education 30 law, each member of such limited liability company must be licensed 31 pursuant to article 163 of the education law to practice psychoanalysis 32 in this state. [With respect to a professional service limited liability33company formed to provide applied behavior analysis services as such34services are defined in article 167 of the education law, each member of35such limited liability company must be licensed or certified pursuant to36article 167 of the education law to practice applied behavior analysis37in this state.] A professional service limited liability company formed 38 to lawfully engage in the practice of public accountancy as a firm, as 39 such practice is defined under article 149 of the education law shall be 40 required to show (1) that a simple majority of the ownership of the 41 firm, in terms of financial interests and voting rights held by the 42 firm's owners, belongs to individuals licensed to practice public 43 accountancy in some state, and (2) that all members of a limited profes- 44 sional service limited liability company, whose principal place of busi- 45 ness is in this state, and who are engaged in the practice of public 46 accountancy in this state, hold a valid license issued under section 47 seventy-four hundred four of the education law. For purposes of this 48 subdivision, "financial interest" means capital stock, capital accounts, 49 capital contributions, capital interest, or interest in undistributed 50 earnings of a business entity. Although firms registered with the educa- 51 tion department may include non-licensee owners, a registered firm and 52 its owners must comply with rules promulgated by the state board of 53 regents. Notwithstanding the foregoing, a firm registered with the 54 education department may not have non-licensee owners if the firm's name 55 includes the words "certified public accountant," or "certified public 56 accountants," or the abbreviations "CPA" or "CPAs". Each non-licenseeS. 3350--A 5 1 owner of a firm that is registered under this section shall be (1) a 2 natural person who actively participates in the business of the firm or 3 its affiliated entities, or (2) an entity, including, but not limited 4 to, a partnership or professional corporation, provided each beneficial 5 owner of an equity interest in such entity is a natural person who 6 actively participates in the business conducted by the firm or its 7 affiliated entities. For purposes of this subdivision, "actively partic- 8 ipate" means to provide services to clients or to otherwise individually 9 take part in the day-to-day business or management of the firm or an 10 affiliated entity. 11 § 3. Subdivision (a) of section 1301 of the limited liability company 12 law, as amended by chapter 701 of the laws of 2023, is amended to read 13 as follows: 14 (a) "Foreign professional service limited liability company" means a 15 professional service limited liability company, whether or not denomi- 16 nated as such, organized under the laws of a jurisdiction other than 17 this state, (i) each of whose members and managers, if any, is a profes- 18 sional authorized by law to render a professional service within this 19 state and who is or has been engaged in the practice of such profession 20 in such professional service limited liability company or a predecessor 21 entity, or will engage in the practice of such profession in the profes- 22 sional service limited liability company within thirty days of the date 23 such professional becomes a member, or each of whose members and manag- 24 ers, if any, is a professional at least one of such members is author- 25 ized by law to render a professional service within this state and who 26 is or has been engaged in the practice of such profession in such 27 professional service limited liability company or a predecessor entity, 28 or will engage in the practice of such profession in the professional 29 service limited liability company within thirty days of the date such 30 professional becomes a member, or (ii) authorized by, or holding a 31 license, certificate, registration or permit issued by the licensing 32 authority pursuant to, the education law to render a professional 33 service within this state; except that all members and managers, if any, 34 of a foreign professional service limited liability company that 35 provides health services in this state shall be licensed in this state. 36 With respect to a foreign professional service limited liability company 37 which provides veterinary services as such services are defined in arti- 38 cle 135 of the education law, each member of such foreign professional 39 service limited liability company shall be licensed pursuant to article 40 135 of the education law to practice veterinary medicine. With respect 41 to a foreign professional service limited liability company which 42 provides medical services as such services are defined in article 131 of 43 the education law, each member of such foreign professional service 44 limited liability company must be licensed pursuant to article 131 of 45 the education law to practice medicine in this state. Notwithstanding 46 any other provision of this section, any person licensed pursuant to 47 article 131 of the education law to practice medicine and any person 48 licensed pursuant to articles 132, 137, 140, 141, 143, 144, 153, 154, 49 155, 156, 163, 167 or subdivision 3 of section 6902 of article 139 of 50 the education law may form, or cause to be formed, a foreign profes- 51 sional service limited liability company to provide multidisciplinary 52 services with one or more licensed professionals, subject to the follow- 53 ing conditions: (i) each member of such limited liability company must 54 be licensed pursuant to title eight of the education law to practice 55 such member's profession in this state; (ii) each member shall only 56 practice such member's profession as specified in such member's respec-S. 3350--A 6 1 tive professional enabling statute under title eight of the education 2 law; and (iii) any clinical integration of professional practices under 3 this section shall not alter, expand or curtail the scope of practice 4 of any of the members; provided further that: (A) no member shall, 5 directly or indirectly, interfere with the clinical judgment or legiti- 6 mate clinical practice of another member; and (B) no member shall order 7 or direct another member to practice beyond the scope of such member's 8 license. With respect to a foreign professional service limited liabil- 9 ity company which provides dental services as such services are defined 10 in article 133 of the education law, each member of such foreign profes- 11 sional service limited liability company must be licensed pursuant to 12 article 133 of the education law to practice dentistry in this state. 13 With respect to a foreign professional service limited liability company 14 which provides professional engineering, land surveying, geologic, 15 architectural and/or landscape architectural services as such services 16 are defined in article 145, article 147 and article 148 of the education 17 law, each member of such foreign professional service limited liability 18 company must be licensed pursuant to article 145, article 147 and/or 19 article 148 of the education law to practice one or more of such 20 professions in this state. With respect to a foreign professional 21 service limited liability company which provides public accountancy 22 services as such services are defined in article 149 of the education 23 law, each member of such foreign professional service limited liability 24 company whose principal place of business is in this state and who 25 provides public accountancy services, shall be licensed pursuant to 26 article 149 of the education law to practice public accountancy in this 27 state. [With respect to a foreign professional service limited liability28company which provides licensed clinical social work services as such29services are defined in article 154 of the education law, each member of30such foreign professional service limited liability company shall be31licensed pursuant to article 154 of the education law to practice clin-32ical social work in this state.] With respect to a foreign professional 33 service limited liability company which provides creative arts therapy 34 services as such services are defined in article 163 of the education 35 law, each member of such foreign professional service limited liability 36 company must be licensed pursuant to article 163 of the education law to 37 practice creative arts therapy in this state. With respect to a foreign 38 professional service limited liability company which provides marriage 39 and family therapy services as such services are defined in article 163 40 of the education law, each member of such foreign professional service 41 limited liability company must be licensed pursuant to article 163 of 42 the education law to practice marriage and family therapy in this state. 43 With respect to a foreign professional service limited liability company 44 which provides mental health counseling services as such services are 45 defined in article 163 of the education law, each member of such foreign 46 professional service limited liability company must be licensed pursuant 47 to article 163 of the education law to practice mental health counseling 48 in this state. With respect to a foreign professional service limited 49 liability company which provides psychoanalysis services as such 50 services are defined in article 163 of the education law, each member of 51 such foreign professional service limited liability company must be 52 licensed pursuant to article 163 of the education law to practice 53 psychoanalysis in this state. [With respect to a foreign professional54service limited liability company which provides applied behavior analy-55sis services as such services are defined in article 167 of the educa-56tion law, each member of such foreign professional service limitedS. 3350--A 7 1liability company must be licensed or certified pursuant to article 1672of the education law to practice applied behavior analysis in this3state.] A foreign professional service limited liability company formed 4 to lawfully engage in the practice of public accountancy as a firm, as 5 such practice is defined under article 149 of the education law shall be 6 required to show (1) that a simple majority of the ownership of the 7 firm, in terms of financial interests and voting rights held by the 8 firm's owners, belongs to individuals licensed to practice public 9 accountancy in some state, and (2) that all members of a foreign limited 10 professional service limited liability company, whose principal place of 11 business is in this state, and who are engaged in the practice of public 12 accountancy in this state, hold a valid license issued under section 13 seventy-four hundred four of the education law. For purposes of this 14 subdivision, "financial interest" means capital stock, capital accounts, 15 capital contributions, capital interest, or interest in undistributed 16 earnings of a business entity. Although firms registered with the 17 education department may include non-licensee owners, a registered firm 18 and its owners must comply with rules promulgated by the state board of 19 regents. Notwithstanding the foregoing, a firm registered with the 20 education department may not have non-licensee owners if the firm's name 21 includes the words "certified public accountant," or "certified public 22 accountants," or the abbreviations "CPA" or "CPAs". Each non-licensee 23 owner of a firm that is registered under this section shall be (1) a 24 natural person who actively participates in the business of the firm or 25 its affiliated entities, or (2) an entity, including, but not limited 26 to, a partnership or professional corporation, provided each beneficial 27 owner of an equity interest in such entity is a natural person who 28 actively participates in the business conducted by the firm or its 29 affiliated entities. For purposes of this subdivision, "actively partic- 30 ipate" means to provide services to clients or to otherwise individually 31 take part in the day-to-day business or management of the firm or an 32 affiliated entity. 33 § 4. Paragraph (a) of section 1503 of the business corporation law, as 34 amended by chapter 475 of the laws of 2014, is amended to read as 35 follows: 36 (a) Notwithstanding any other provision of law, (i) one or more indi- 37 viduals duly authorized by law to render the same professional service 38 within the state may organize, or cause to be organized, a professional 39 service corporation for pecuniary profit under this article for the 40 purpose of rendering the same professional service, except that one or 41 more individuals duly authorized by law to practice professional engi- 42 neering, architecture, landscape architecture, land surveying or geology 43 within the state may organize, or cause to be organized, a professional 44 service corporation or a design professional service corporation for 45 pecuniary profit under this article for the purpose of rendering such 46 professional services as such individuals are authorized to practice, 47 and (ii) one or more individuals licensed to practice pursuant to arti- 48 cle one hundred thirty-one and one or more individuals licensed pursuant 49 to articles one hundred thirty-two, one hundred thirty-seven, one 50 hundred forty, one hundred forty-one, one hundred forty-three, one 51 hundred forty-four, one hundred fifty-three, one hundred fifty-four, one 52 hundred fifty-five, one hundred fifty-six, one hundred sixty-three, one 53 hundred sixty-seven or subdivision three of section six thousand nine 54 hundred two of article one hundred thirty-nine of title eight of the 55 education law may organize, or cause to be organized, for business 56 purposes only, a professional service corporation formed for pecuniaryS. 3350--A 8 1 profit under this article for the purpose of rendering multidisciplinary 2 services within such a corporation as such individuals are authorized to 3 practice individually in such individual's respective professions, 4 subject to the following conditions: (A) individual who organizes, or 5 causes to organize, such corporation must be licensed pursuant to title 6 eight of the education law to practice such individual's profession in 7 this state; (B) each member shall only practice such member's profession 8 as specified in such member's respective professional enabling statute 9 under title eight of the education law; and (C) any clinical integration 10 of professional practices under this section shall not alter, expand or 11 curtail the scope of practice of any of the members; (D) no individual 12 shall, directly or indirectly, interfere with the clinical judgment or 13 legitimate clinical practice of another individual; and (E) no individ- 14 ual shall order or direct another individual to practice beyond the 15 scope of such individual's license. 16 § 5. Subdivision (q) of section 121-1500 of the partnership law, as 17 amended by chapter 701 of the laws of 2023, is amended to read as 18 follows: 19 (q) Each partner of a registered limited liability partnership formed 20 to provide medical services in this state must be licensed pursuant to 21 article 131 of the education law to practice medicine in this state [and22each]. Notwithstanding any other provision of this section, any person 23 licensed pursuant to article 131 of the education law to practice medi- 24 cine and any person licensed pursuant to articles 132, 137, 140, 141, 25 143, 144, 153, 154, 155, 156, 163, 167 or subdivision 3 of section 6902 26 of article 139 of the education law may form, or cause to be 27 formed, a registered limited liability partnership to provide multi- 28 disciplinary services with one or more licensed professionals, subject 29 to the following conditions: (i) each partner of such limited liabil- 30 ity partnership must be licensed pursuant to title eight of the educa- 31 tion law to practice such partner's profession in this state; (ii) 32 each partner shall only practice such partner's profession as specified 33 in such partner's respective professional enabling statute under title 34 eight of the education law; and (iii) any clinical integration of the 35 professional practices under this section shall not alter, expand or 36 curtail the scope of practice of any of the partners; provided further 37 that: (A) no partner shall, directly or indirectly, interfere with the 38 clinical judgment or legitimate clinical practice of another partner; 39 and (B) no partner shall order or direct another partner to practice 40 beyond the scope of such partner's license. Each partner of a registered 41 limited liability partnership formed to provide dental services in this 42 state must be licensed pursuant to article 133 of the education law to 43 practice dentistry in this state. Each partner of a registered limited 44 liability partnership formed to provide veterinary services in this 45 state must be licensed pursuant to article 135 of the education law to 46 practice veterinary medicine in this state. Each partner of a registered 47 limited liability partnership formed to provide public accountancy 48 services as a firm, whose principal place of business is in this state 49 and who provides public accountancy services, must be licensed pursuant 50 to article 149 of the education law to practice public accountancy in 51 this state. Each partner of a registered limited liability partnership 52 formed to provide professional engineering, land surveying, geological 53 services, architectural and/or landscape architectural services in this 54 state must be licensed pursuant to article 145, article 147 and/or arti- 55 cle 148 of the education law to practice one or more of such professions 56 in this state. [Each partner of a registered limited liability partner-S. 3350--A 9 1ship formed to provide licensed clinical social work services in this2state must be licensed pursuant to article 154 of the education law to3practice clinical social work in this state.] Each partner of a regis- 4 tered limited liability partnership formed to provide creative arts 5 therapy services in this state must be licensed pursuant to article 163 6 of the education law to practice creative arts therapy in this state. 7 Each partner of a registered limited liability partnership formed to 8 provide marriage and family therapy services in this state must be 9 licensed pursuant to article 163 of the education law to practice 10 marriage and family therapy in this state. Each partner of a registered 11 limited liability partnership formed to provide mental health counseling 12 services in this state must be licensed pursuant to article 163 of the 13 education law to practice mental health counseling in this state. Each 14 partner of a registered limited liability partnership formed to provide 15 psychoanalysis services in this state must be licensed pursuant to arti- 16 cle 163 of the education law to practice psychoanalysis in this state. 17 [Each partner of a registered limited liability partnership formed to18provide applied behavior analysis service in this state must be licensed19or certified pursuant to article 167 of the education law to practice20applied behavior analysis in this state.] A registered limited liability 21 partnership formed to lawfully engage in the practice of public accoun- 22 tancy as a firm, as such practice is defined under article 149 of the 23 education law, shall be required to show (1) that a simple majority of 24 the ownership of the firm, in terms of financial interests and voting 25 rights held by the firm's owners, belongs to individuals licensed to 26 practice public accountancy in some state, and (2) that all partners of 27 a limited liability partnership whose principal place of business is in 28 this state, and who are engaged in the practice of public accountancy in 29 this state, hold a valid license issued under section seventy-four 30 hundred four of the education law. For purposes of this subdivision, 31 "financial interest" means capital stock, capital accounts, capital 32 contributions, capital interest, or interest in undistributed earnings 33 of a business entity. Although firms registered with the education 34 department may include non-licensee owners, the firm and its owners must 35 comply with rules promulgated by the state board of regents. Notwith- 36 standing the foregoing, a firm registered with the education department 37 may not have non-licensee owners if the firm's name includes the words 38 "certified public accountant," or "certified public accounts," or the 39 abbreviations "CPA" or "CPAs". Each non-licensee owner of a firm that is 40 formed under this section shall be (1) a natural person who actively 41 participates in the business of the firm or its affiliated entities, or 42 (2) an entity, including, but not limited to, a partnership or profes- 43 sional corporation, provided each beneficial owner of an equity interest 44 in such entity is a natural person who actively participates in the 45 business conducted by the firm or its affiliated entities. For purposes 46 of this subdivision, "actively participate" means to provide services to 47 clients or to otherwise individually take part in the day-to-day busi- 48 ness or management of the firm or an affiliated entity. 49 § 6. Subdivision (q) of section 121-1502 of the partnership law, as 50 amended by chapter 701 of the laws of 2023, is amended to read as 51 follows: 52 (q) Each partner of a foreign limited liability partnership which 53 provides medical services in this state must be licensed pursuant to 54 article 131 of the education law to practice medicine in the state [and55each]. Notwithstanding any other provision of this section, any person 56 licensed pursuant to article 131 of the education law to practice medi-S. 3350--A 10 1 cine and any person licensed pursuant to articles 132, 137, 140, 141, 2 143, 144, 153, 154, 155, 156, 163, 167 or subdivision 3 of section 6902 3 of article 139 of the education law may form, or cause to be 4 formed, a registered limited liability partnership to provide multidis- 5 ciplinary services with one or more licensed professionals, subject to 6 the following conditions: (i) each partner of such limited liability 7 partnership must be licensed pursuant to title eight of the education 8 law to practice such partner's profession in this state; (ii) each 9 partner shall only practice such partner's profession as specified in 10 such partner's respective professional enabling statute under title 11 eight of the education law; and (iii) any clinical integration of the 12 professional practices under this section shall not alter, expand or 13 curtail the scope of practice of any of the partners; provided 14 further that: (A) no partner shall, directly or indirectly, interfere 15 with the clinical judgment or legitimate clinical practice of anoth- 16 er partner; and (B) no partner shall order or direct another partner to 17 practice beyond the scope of such partner's license. Each partner of a 18 foreign limited liability partnership which provides dental services in 19 the state must be licensed pursuant to article 133 of the education law 20 to practice dentistry in this state. Each partner of a foreign limited 21 liability partnership which provides veterinary service in the state 22 shall be licensed pursuant to article 135 of the education law to prac- 23 tice veterinary medicine in this state. Each partner of a foreign limit- 24 ed liability partnership which provides professional engineering, land 25 surveying, geological services, architectural and/or landscape architec- 26 tural services in this state must be licensed pursuant to article 145, 27 article 147 and/or article 148 of the education law to practice one or 28 more of such professions. Each partner of a foreign limited liability 29 partnership formed to provide public accountancy services as a firm, 30 whose principal place of business is in this state and who provides 31 public accountancy services, must be licensed pursuant to article 149 of 32 the education law to practice public accountancy in this state. [Each33partner of a foreign limited liability partnership which provides34licensed clinical social work services in this state must be licensed35pursuant to article 154 of the education law to practice licensed clin-36ical social work in this state.] Each partner of a foreign limited 37 liability partnership which provides creative arts therapy services in 38 this state must be licensed pursuant to article 163 of the education law 39 to practice creative arts therapy in this state. Each partner of a 40 foreign limited liability partnership which provides marriage and family 41 therapy services in this state must be licensed pursuant to article 163 42 of the education law to practice marriage and family therapy in this 43 state. Each partner of a foreign limited liability partnership which 44 provides mental health counseling services in this state must be 45 licensed pursuant to article 163 of the education law to practice mental 46 health counseling in this state. Each partner of a foreign limited 47 liability partnership which provides psychoanalysis services in this 48 state must be licensed pursuant to article 163 of the education law to 49 practice psychoanalysis in this state. [Each partner of a foreign limit-50ed liability partnership which provides applied behavior analysis51services in this state must be licensed or certified pursuant to article52167 of the education law to practice applied behavior analysis in this53state.] A foreign limited liability partnership formed to lawfully 54 engage in the practice of public accountancy as a firm, as such practice 55 is defined under article 149 of the education law, shall be required to 56 show (1) that a simple majority of the ownership of the firm, in termsS. 3350--A 11 1 of financial interests and voting rights held by the firm's owners, 2 belongs to individuals licensed to practice public accountancy in some 3 state, and (2) that all partners of the foreign limited liability part- 4 nership whose principal place of business is in this state, and who are 5 engaged in the practice of public accountancy in this state, hold a 6 valid license issued under section seventy-four hundred four of the 7 education law. For purposes of this subdivision, "financial interest" 8 means capital stock, capital accounts, capital contributions, capital 9 interest, or interest in undistributed earnings of a business entity. 10 Although firms registered with the education department may include 11 non-licensee owners, a registered firm and its owners must comply with 12 rules promulgated by the state board of regents. Notwithstanding the 13 foregoing, a firm registered with the education department may not have 14 non-licensee owners if the firm's name includes the words "certified 15 public accountant," or "certified public accountants," or the abbrevi- 16 ations "CPA" or "CPAs". Each non-licensee owner of a firm that is formed 17 under this section shall be (1) a natural person who actively partic- 18 ipates in the business of the firm or its affiliated entities, or (2) an 19 entity, including, but not limited to, a partnership or professional 20 corporation, provided that each beneficial owner of an equity interest 21 in such entity is a natural person who actively participates in the 22 business conducted by the firm or its affiliated entities. For purposes 23 of this subdivision, "actively participate" means to provide services to 24 clients or to otherwise individually take part in the day-to-day busi- 25 ness or management of the firm or an affiliated entity. 26 § 7. Section 6509-a of the education law, as amended by chapter 555 of 27 the laws of 1993, is amended to read as follows: 28 § 6509-a. Additional definition of professional misconduct; limited 29 application. Notwithstanding any inconsistent provision of this article 30 or of any other provision of law to the contrary, the license or regis- 31 tration of a person subject to the provisions of articles one hundred 32 thirty-two, one hundred thirty-three, one hundred thirty-six, one 33 hundred thirty-seven, one hundred thirty-nine, one hundred forty-one, 34 one hundred forty-three, one hundred forty-four, one hundred fifty-six, 35 one hundred fifty-nine and one hundred sixty-four of this chapter may be 36 revoked, suspended or annulled or such person may be subject to any 37 other penalty provided in section sixty-five hundred eleven of this 38 article in accordance with the provisions and procedure of this article 39 for the following: 40 That any person subject to the above enumerated articles, has directly 41 or indirectly requested, received or participated in the division, 42 transference, assignment, rebate, splitting or refunding of a fee for, 43 or has directly requested, received or profited by means of a credit or 44 other valuable consideration as a commission, discount or gratuity in 45 connection with the furnishing of professional care, or service, includ- 46 ing x-ray examination and treatment, or for or in connection with the 47 sale, rental, supplying or furnishing of clinical laboratory services or 48 supplies, x-ray laboratory services or supplies, inhalation therapy 49 service or equipment, ambulance service, hospital or medical supplies, 50 physiotherapy or other therapeutic service or equipment, artificial 51 limbs, teeth or eyes, orthopedic or surgical appliances or supplies, 52 optical appliances, supplies or equipment, devices for aid of hearing, 53 drugs, medication or medical supplies or any other goods, services or 54 supplies prescribed for medical diagnosis, care or treatment under this 55 chapter, except payment, not to exceed thirty-three and one-third per 56 centum of any fee received for x-ray examination, diagnosis or treat-S. 3350--A 12 1 ment, to any hospital furnishing facilities for such examination, diag- 2 nosis or treatment. Nothing contained in this section shall prohibit 3 such persons from practicing as partners, in groups or as a professional 4 corporation or as a university faculty practice corporation nor from 5 pooling fees and moneys received, either by the partnerships, profes- 6 sional corporations, university faculty practice corporations or groups 7 by the individual members thereof, for professional services furnished 8 by any individual professional member, or employee of such partnership, 9 corporation or group, nor shall the professionals constituting the part- 10 nerships, corporations or groups be prohibited from sharing, dividing or 11 apportioning the fees and moneys received by them or by the partnership, 12 corporation or group in accordance with a partnership or other agree- 13 ment; provided that no such practice as partners, corporations or in 14 groups or pooling of fees or moneys received or shared, division or 15 apportionment of fees shall be permitted with respect to care and treat- 16 ment under the workers' compensation law except as expressly authorized 17 by the workers' compensation law. Nothing contained in this section 18 shall prohibit a multidisciplinary services practice formed pursuant to 19 subdivision (a) of section twelve hundred three of the limited liability 20 company law, subdivision (b) of section twelve hundred seven of the 21 limited liability company law, subdivision (a) of section thirteen 22 hundred one of the limited liability company law, paragraph (a) of 23 section fifteen hundred three of the business corporation law, subdivi- 24 sion (q) of section 121-1500 of the partnership law, or subdivision (q) 25 of section 121-1502 of the partnership law from pooling fees or monies 26 received. Nothing contained in this chapter shall prohibit a medical or 27 dental expense indemnity corporation pursuant to its contract with the 28 subscriber from prorationing a medical or dental expense indemnity 29 allowance among two or more professionals in proportion to the services 30 rendered by each such professional at the request of the subscriber, 31 provided that prior to payment thereof such professionals shall submit 32 both to the medical or dental expense indemnity corporation and to the 33 subscriber statements itemizing the services rendered by each such 34 professional and the charges therefor. 35 § 8. Subdivision 19 of section 6530 of the education law, as added by 36 chapter 606 of the laws of 1991, is amended to read as follows: 37 19. Permitting any person to share in the fees for professional 38 services, other than: a partner, employee, associate in a professional 39 firm or corporation, professional subcontractor or consultant authorized 40 to practice medicine, [or] a legally authorized trainee practicing under 41 the supervision of a licensee, or an authorized professional licensed 42 pursuant to article one hundred thirty-one, one hundred thirty-two, one 43 hundred thirty-seven, one hundred forty, one hundred forty-one, one 44 hundred forty-three, one hundred forty-four, one hundred fifty-three, 45 one hundred fifty-four, one hundred fifty-five, one hundred fifty-six, 46 one hundred fifty-nine, one hundred sixty-three, one hundred sixty-seven 47 or subdivision three of section sixty-nine hundred two of article one 48 hundred thirty-nine of this chapter providing professional services in 49 the same practice. This prohibition shall include any arrangement or 50 agreement whereby the amount received in payment for furnishing space, 51 facilities, equipment or personnel services used by a licensee consti- 52 tutes a percentage of, or is otherwise dependent upon, the income or 53 receipts of the licensee from such practice, except as otherwise 54 provided by law with respect to a facility licensed pursuant to article 55 twenty-eight of the public health law or article thirteen of the mental 56 hygiene law;S. 3350--A 13 1 § 9. Section 6531 of the education law, as amended by chapter 555 of 2 the laws of 1993, is amended to read as follows: 3 § 6531. Additional definition of professional misconduct, limited 4 application. Notwithstanding any inconsistent provision of this article 5 or any other provisions of law to the contrary, the license or registra- 6 tion of a person subject to the provisions of this article and article 7 one hundred thirty-one-B of this chapter may be revoked, suspended, or 8 annulled or such person may be subject to any other penalty provided in 9 section two hundred thirty-a of the public health law in accordance with 10 the provisions and procedures of this article for the following: 11 That any person subject to the above-enumerated articles has directly 12 or indirectly requested, received or participated in the division, 13 transference, assignment, rebate, splitting, or refunding of a fee for, 14 or has directly requested, received or profited by means of a credit or 15 other valuable consideration as a commission, discount or gratuity, in 16 connection with the furnishing of professional care or service, includ- 17 ing x-ray examination and treatment, or for or in connection with the 18 sale, rental, supplying, or furnishing of clinical laboratory services 19 or supplies, x-ray laboratory services or supplies, inhalation therapy 20 service or equipment, ambulance service, hospital or medical supplies, 21 physiotherapy or other therapeutic service or equipment, artificial 22 limbs, teeth or eyes, orthopedic or surgical appliances or supplies, 23 optical appliances, supplies, or equipment, devices for aid of hearing, 24 drugs, medication, or medical supplies, or any other goods, services, or 25 supplies prescribed for medical diagnosis, care, or treatment under this 26 chapter, except payment, not to exceed thirty-three and one-third 27 percent of any fee received for x-ray examination, diagnosis, or treat- 28 ment, to any hospital furnishing facilities for such examination, diag- 29 nosis, or treatment. Nothing contained in this section shall prohibit 30 such persons from practicing as partners, in groups or as a professional 31 corporation or as a university faculty practice corporation, nor from 32 pooling fees and moneys received, either by the partnerships, profes- 33 sional corporations, or university faculty practice corporations or 34 groups by the individual members thereof, for professional services 35 furnished by an individual professional member, or employee of such 36 partnership, corporation, or group, nor shall the professionals consti- 37 tuting the partnerships, corporations or groups be prohibited from shar- 38 ing, dividing, or apportioning the fees and moneys received by them or 39 by the partnership, corporation, or group in accordance with a partner- 40 ship or other agreement; provided that no such practice as partners, 41 corporations, or groups, or pooling of fees or moneys received or 42 shared, division or apportionment of fees shall be permitted with 43 respect to and treatment under the workers' compensation law. Nothing 44 contained in this section shall prohibit a multidisciplinary services 45 practice formed pursuant to subdivision (a) of section twelve hundred 46 three of the limited liability company law, subdivision (b) of section 47 twelve hundred seven of the limited liability company law, subdivision 48 (a) of section thirteen hundred one of the limited liability company 49 law, paragraph (a) of section fifteen hundred three of the business 50 corporation law, subdivision (q) of section 121-1500 of the partnership 51 law, or subdivision (q) of section 121-1502 of the partnership law from 52 pooling fees or monies received. Nothing contained in this chapter shall 53 prohibit a corporation licensed pursuant to article forty-three of the 54 insurance law pursuant to its contract with the subscribed from prora- 55 tioning a medical or dental expenses indemnity allowance among two or 56 more professionals in proportion to the services rendered by each suchS. 3350--A 14 1 professional at the request of the subscriber, provided that prior to 2 payment thereof such professionals shall submit both to the corporation 3 licensed pursuant to article forty-three of the insurance law and to the 4 subscriber statements itemizing the services rendered by each such 5 professional and the charges therefor. 6 § 10. Subdivision 1 of section 2801 of the public health law, as 7 amended by section 2 of part E of chapter 57 of the laws of 2023, is 8 amended to read as follows: 9 1. "Hospital" means a facility or institution engaged principally in 10 providing services by or under the supervision of a physician or, in the 11 case of a dental clinic or dental dispensary, of a dentist, or, in the 12 case of a midwifery birth center, of a midwife, for the prevention, 13 diagnosis or treatment of human disease, pain, injury, deformity or 14 physical condition, including, but not limited to, a general hospital, 15 public health center, diagnostic center, treatment center, a rural emer- 16 gency hospital under 42 USC 1395x(kkk), or successor provisions, dental 17 clinic, dental dispensary, rehabilitation center other than a facility 18 used solely for vocational rehabilitation, nursing home, tuberculosis 19 hospital, chronic disease hospital, maternity hospital, midwifery birth 20 center, lying-in-asylum, out-patient department, out-patient lodge, 21 dispensary and a laboratory or central service facility serving one or 22 more such institutions, but the term hospital shall not include an 23 institution, sanitarium or other facility engaged principally in provid- 24 ing services for the prevention, diagnosis or treatment of mental disa- 25 bility and which is subject to the powers of visitation, examination, 26 inspection and investigation of the department of mental hygiene except 27 for those distinct parts of such a facility which provide hospital 28 service. The provisions of this article shall not apply to a facility or 29 institution engaged principally in providing services by or under the 30 supervision of the bona fide members and adherents of a recognized reli- 31 gious organization whose teachings include reliance on spiritual means 32 through prayer alone for healing in the practice of the religion of such 33 organization and where services are provided in accordance with those 34 teachings or to a multidisciplinary services practice formed pursuant to 35 subdivision (a) of section twelve hundred three of the limited liability 36 company law, subdivision (b) of section twelve hundred seven of the 37 limited liability company law, subdivision (a) of section thirteen 38 hundred one of the limited liability company law, paragraph (a) of 39 section fifteen hundred three of the business corporation law, subdivi- 40 sion (q) of section 121-1500 of the partnership law, or subdivision (q) 41 of section 121-1502 of the partnership law. No provision of this article 42 or any other provision of law shall be construed to: (a) limit the 43 volume of mental health, substance use disorder services or develop- 44 mental disability services that can be provided by a provider of primary 45 care services licensed under this article and authorized to provide 46 integrated services in accordance with regulations issued by the commis- 47 sioner in consultation with the commissioner of the office of mental 48 health, the commissioner of the office of [alcoholism] addiction 49 services and [substance abuse services] supports and the commissioner of 50 the office for people with developmental disabilities, including regu- 51 lations issued pursuant to subdivision seven of section three hundred 52 sixty-five-l of the social services law or part L of chapter fifty-six 53 of the laws of two thousand twelve; (b) require a provider licensed 54 pursuant to article thirty-one of the mental hygiene law or certified 55 pursuant to article sixteen or article thirty-two of the mental hygiene 56 law to obtain an operating certificate from the department if suchS. 3350--A 15 1 provider has been authorized to provide integrated services in accord- 2 ance with regulations issued by the commissioner in consultation with 3 the commissioner of the office of mental health, the commissioner of the 4 office of [alcoholism] addiction services and [substance abuse services] 5 supports and the commissioner of the office for people with develop- 6 mental disabilities, including regulations issued pursuant to subdivi- 7 sion seven of section three hundred sixty-five-l of the social services 8 law or part L of chapter fifty-six of the laws of two thousand twelve. 9 § 11. This act shall take effect on the thirtieth day after it shall 10 have become a law.
