Bill Text: NY A02588 | 2025-2026 | General Assembly | Introduced
Bill Title: Authorizes certain licensed health service professionals to form limited liability companies.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced) 2025-01-21 - referred to higher education [A02588 Detail]
Download: New_York-2025-A02588-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 2588 2025-2026 Regular Sessions IN ASSEMBLY January 21, 2025 ___________ Introduced by M. of A. PEOPLES-STOKES, BENEDETTO, STECK, LUPARDO, WOER- NER, STIRPE, BUTTENSCHON -- read once and referred to the Committee on Higher Education 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, or 167 or subdivision 3 of section 20 6902 of article 139 of the education law may form, or cause to be 21 formed, a professional service limited liability company to provide 22 multidisciplinary services with one or more licensed professionals, EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03034-01-5A. 2588 2 1 subject to the following conditions: (i) each member of such limited 2 liability company must be licensed pursuant to title eight of the educa- 3 tion law to practice such member's profession in this state; (ii) each 4 member shall only practice such member's profession as specified in such 5 member's respective professional enabling statute under title eight of 6 the education law; and (iii) any clinical integration of professional 7 practices under this section shall not alter, expand or curtail the 8 scope of practice of any of the members; provided further that: (A) no 9 member shall, directly or indirectly, interfere with the clinical judg- 10 ment or legitimate clinical practice of another member; and (B) no 11 member shall order or direct another member to practice beyond the scope 12 of such member's license. With respect to a professional service limited 13 liability company formed to provide dental services as such services are 14 defined in article 133 of the education law, each member of such limited 15 liability company must be licensed pursuant to article 133 of the educa- 16 tion law to practice dentistry in this state. With respect to a profes- 17 sional service limited liability company formed to provide veterinary 18 services as such services are defined in article 135 of the education 19 law, each member of such limited liability company must be licensed 20 pursuant to article 135 of the education law to practice veterinary 21 medicine in this state. With respect to a professional service limited 22 liability company formed to provide professional engineering, land 23 surveying, architectural, landscape architectural and/or geological 24 services as such services are defined in article 145, article 147 and 25 article 148 of the education law, each member of such limited liability 26 company must be licensed pursuant to article 145, article 147 and/or 27 article 148 of the education law to practice one or more of such 28 professions in this state. [With respect to a professional service29limited liability company formed to provide licensed clinical social30work services as such services are defined in article 154 of the educa-31tion law, each member of such limited liability company shall be32licensed pursuant to article 154 of the education law to practice33licensed clinical social work in this state.] With respect to a profes- 34 sional service limited liability company formed to provide creative arts 35 therapy services as such services are defined in article 163 of the 36 education law, each member of such limited liability company must be 37 licensed pursuant to article 163 of the education law to practice crea- 38 tive arts therapy in this state. With respect to a professional service 39 limited liability company formed to provide marriage and family therapy 40 services as such services are defined in article 163 of the education 41 law, each member of such limited liability company must be licensed 42 pursuant to article 163 of the education law to practice marriage and 43 family therapy in this state. With respect to a professional service 44 limited liability company formed to provide mental health counseling 45 services as such services are defined in article 163 of the education 46 law, each member of such limited liability company must be licensed 47 pursuant to article 163 of the education law to practice mental health 48 counseling in this state. With respect to a professional service limited 49 liability company formed to provide psychoanalysis services as such 50 services are defined in article 163 of the education law, each member of 51 such limited liability company must be licensed pursuant to article 163 52 of the education law to practice psychoanalysis in this state. [With53respect to a professional service limited liability company formed to54provide applied behavior analysis services as such services are defined55in article 167 of the education law, each member of such limited liabil-56ity company must be licensed or certified pursuant to article 167 of theA. 2588 3 1education law to practice applied behavior analysis in this state.] In 2 addition to engaging in such profession or professions, a professional 3 service limited liability company may engage in any other business or 4 activities as to which a limited liability company may be formed under 5 section two hundred one of this chapter. Notwithstanding any other 6 provision of this section, a professional service limited liability 7 company (i) authorized to practice law may only engage in another 8 profession or business or activities or (ii) which is engaged in a 9 profession or other business or activities other than law may only 10 engage in the practice of law, to the extent not prohibited by any other 11 law of this state or any rule adopted by the appropriate appellate divi- 12 sion of the supreme court or the court of appeals. 13 § 2. Subdivision (b) of section 1207 of the limited liability company 14 law, as amended by chapter 701 of the laws of 2023, is amended to read 15 as follows: 16 (b) With respect to a professional service limited liability company 17 formed to provide medical services as such services are defined in arti- 18 cle 131 of the education law, each member of such limited liability 19 company must be licensed pursuant to article 131 of the education law to 20 practice medicine in this state. Notwithstanding any other provision of 21 this section, any person licensed pursuant to article 131 of the educa- 22 tion law to practice medicine and any person licensed pursuant to arti- 23 cles 132, 137, 140, 141, 143, 144, 153, 154, 155, 156, or 167 or subdi- 24 vision 3 of section 6902 of article 139 of the education law may form, 25 or cause to be formed, a professional service limited liability company 26 to provide multidisciplinary services with one or more licensed profes- 27 sionals, subject to the following conditions: (i) each member of such 28 limited liability company must be licensed pursuant to title eight of 29 the education law to practice such member's profession in this state; 30 (ii) each member shall only practice such member's profession as spec- 31 ified in such member's respective professional enabling statute under 32 title eight of the education law; and (iii) any clinical integration 33 of professional practices under this section shall not alter, expand or 34 curtail the scope of practice of any of the members; provided further 35 that: (A) no member shall, directly or indirectly, interfere with the 36 clinical judgement or legitimate clinical practice of another member; 37 and (B) no member shall order or direct another member to practice 38 beyond the scope of such member's license. With respect to a profes- 39 sional service limited liability company formed to provide dental 40 services as such services are defined in article 133 of the education 41 law, each member of such limited liability company must be licensed 42 pursuant to article 133 of the education law to practice dentistry in 43 this state. With respect to a professional service limited liability 44 company formed to provide veterinary services as such services are 45 defined in article 135 of the education law, each member of such limited 46 liability company must be licensed pursuant to article 135 of the educa- 47 tion law to practice veterinary medicine in this state. With respect to 48 a professional service limited liability company formed to provide 49 professional engineering, land surveying, architectural, landscape 50 architectural and/or geological services as such services are defined in 51 article 145, article 147 and article 148 of the education law, each 52 member of such limited liability company must be licensed pursuant to 53 article 145, article 147 and/or article 148 of the education law to 54 practice one or more of such professions in this state. With respect to 55 a professional service limited liability company formed to provide 56 public accountancy services as such services are defined in article 149A. 2588 4 1 of the education law each member of such limited liability company whose 2 principal place of business is in this state and who provides public 3 accountancy services, must be licensed pursuant to article 149 of the 4 education law to practice public accountancy in this state. [With5respect to a professional service limited liability company formed to6provide licensed clinical social work services as such services are7defined in article 154 of the education law, each member of such limited8liability company shall be licensed pursuant to article 154 of the9education law to practice licensed clinical social work in this state.] 10 With respect to a professional service limited liability company formed 11 to provide creative arts therapy services as such services are defined 12 in article 163 of the education law, each member of such limited liabil- 13 ity company must be licensed pursuant to article 163 of the education 14 law to practice creative arts therapy in this state. With respect to a 15 professional service limited liability company formed to provide 16 marriage and family therapy services as such services are defined in 17 article 163 of the education law, each member of such limited liability 18 company must be licensed pursuant to article 163 of the education law to 19 practice marriage and family therapy in this state. With respect to a 20 professional service limited liability company formed to provide mental 21 health counseling services as such services are defined in article 163 22 of the education law, each member of such limited liability company must 23 be licensed pursuant to article 163 of the education law to practice 24 mental health counseling in this state. With respect to a professional 25 service limited liability company formed to provide psychoanalysis 26 services as such services are defined in article 163 of the education 27 law, each member of such limited liability company must be licensed 28 pursuant to article 163 of the education law to practice psychoanalysis 29 in this state. [With respect to a professional service limited liability30company formed to provide applied behavior analysis services as such31services are defined in article 167 of the education law, each member of32such limited liability company must be licensed or certified pursuant to33article 167 of the education law to practice applied behavior analysis34in this state.] A professional service limited liability company formed 35 to lawfully engage in the practice of public accountancy as a firm, as 36 such practice is defined under article 149 of the education law shall be 37 required to show (1) that a simple majority of the ownership of the 38 firm, in terms of financial interests and voting rights held by the 39 firm's owners, belongs to individuals licensed to practice public 40 accountancy in some state, and (2) that all members of a limited profes- 41 sional service limited liability company, whose principal place of busi- 42 ness is in this state, and who are engaged in the practice of public 43 accountancy in this state, hold a valid license issued under section 44 seventy-four hundred four of the education law. For purposes of this 45 subdivision, "financial interest" means capital stock, capital accounts, 46 capital contributions, capital interest, or interest in undistributed 47 earnings of a business entity. Although firms registered with the educa- 48 tion department may include non-licensee owners, a registered firm and 49 its owners must comply with rules promulgated by the state board of 50 regents. Notwithstanding the foregoing, a firm registered with the 51 education department may not have non-licensee owners if the firm's name 52 includes the words "certified public accountant," or "certified public 53 accountants," or the abbreviations "CPA" or "CPAs". Each non-licensee 54 owner of a firm that is registered under this section shall be (1) a 55 natural person who actively participates in the business of the firm or 56 its affiliated entities, or (2) an entity, including, but not limitedA. 2588 5 1 to, a partnership or professional corporation, provided each beneficial 2 owner of an equity interest in such entity is a natural person who 3 actively participates in the business conducted by the firm or its 4 affiliated entities. For purposes of this subdivision, "actively partic- 5 ipate" means to provide services to clients or to otherwise individually 6 take part in the day-to-day business or management of the firm or an 7 affiliated entity. 8 § 3. Subdivision (a) of section 1301 of the limited liability company 9 law, as amended by chapter 701 of the laws of 2023, is amended to read 10 as follows: 11 (a) "Foreign professional service limited liability company" means a 12 professional service limited liability company, whether or not denomi- 13 nated as such, organized under the laws of a jurisdiction other than 14 this state, (i) each of whose members and managers, if any, is a profes- 15 sional authorized by law to render a professional service within this 16 state and who is or has been engaged in the practice of such profession 17 in such professional service limited liability company or a predecessor 18 entity, or will engage in the practice of such profession in the profes- 19 sional service limited liability company within thirty days of the date 20 such professional becomes a member, or each of whose members and manag- 21 ers, if any, is a professional at least one of such members is author- 22 ized by law to render a professional service within this state and who 23 is or has been engaged in the practice of such profession in such 24 professional service limited liability company or a predecessor entity, 25 or will engage in the practice of such profession in the professional 26 service limited liability company within thirty days of the date such 27 professional becomes a member, or (ii) authorized by, or holding a 28 license, certificate, registration or permit issued by the licensing 29 authority pursuant to, the education law to render a professional 30 service within this state; except that all members and managers, if any, 31 of a foreign professional service limited liability company that 32 provides health services in this state shall be licensed in this state. 33 With respect to a foreign professional service limited liability company 34 which provides veterinary services as such services are defined in arti- 35 cle 135 of the education law, each member of such foreign professional 36 service limited liability company shall be licensed pursuant to article 37 135 of the education law to practice veterinary medicine. With respect 38 to a foreign professional service limited liability company which 39 provides medical services as such services are defined in article 131 of 40 the education law, each member of such foreign professional service 41 limited liability company must be licensed pursuant to article 131 of 42 the education law to practice medicine in this state. Notwithstanding 43 any other provision of this section, any person licensed pursuant to 44 article 131 of the education law to practice medicine and any person 45 licensed pursuant to articles 132, 137, 140, 141, 143, 144, 153, 154, 46 155, 156, or 167 or subdivision 3 of section 6902 of article 139 of the 47 education law may form, or cause to be formed, a foreign professional 48 service limited liability company to provide multidisciplinary services 49 with one or more licensed professionals, subject to the following condi- 50 tions: (i) each member of such limited liability company must be 51 licensed pursuant to title eight of the education law to practice such 52 member's profession in this state; (ii) each member shall only practice 53 such member's profession as specified in such member's respective 54 professional enabling statute under title eight of the education law; 55 and (iii) any clinical integration of professional practices under this 56 section shall not alter, expand or curtail the scope of practice of anyA. 2588 6 1 of the members; provided further that: (A) no member shall, directly or 2 indirectly, interfere with the clinical judgment or legitimate clinical 3 practice of another member; and (B) no member shall order or direct 4 another member to practice beyond the scope of such member's license. 5 With respect to a foreign professional service limited liability company 6 which provides dental services as such services are defined in article 7 133 of the education law, each member of such foreign professional 8 service limited liability company must be licensed pursuant to article 9 133 of the education law to practice dentistry in this state. With 10 respect to a foreign professional service limited liability company 11 which provides professional engineering, land surveying, geologic, 12 architectural and/or landscape architectural services as such services 13 are defined in article 145, article 147 and article 148 of the education 14 law, each member of such foreign professional service limited liability 15 company must be licensed pursuant to article 145, article 147 and/or 16 article 148 of the education law to practice one or more of such 17 professions in this state. With respect to a foreign professional 18 service limited liability company which provides public accountancy 19 services as such services are defined in article 149 of the education 20 law, each member of such foreign professional service limited liability 21 company whose principal place of business is in this state and who 22 provides public accountancy services, shall be licensed pursuant to 23 article 149 of the education law to practice public accountancy in this 24 state. [With respect to a foreign professional service limited liability25company which provides licensed clinical social work services as such26services are defined in article 154 of the education law, each member of27such foreign professional service limited liability company shall be28licensed pursuant to article 154 of the education law to practice clin-29ical social work in this state.] With respect to a foreign professional 30 service limited liability company which provides creative arts therapy 31 services as such services are defined in article 163 of the education 32 law, each member of such foreign professional service limited liability 33 company must be licensed pursuant to article 163 of the education law to 34 practice creative arts therapy in this state. With respect to a foreign 35 professional service limited liability company which provides marriage 36 and family therapy services as such services are defined in article 163 37 of the education law, each member of such foreign professional service 38 limited liability company must be licensed pursuant to article 163 of 39 the education law to practice marriage and family therapy in this state. 40 With respect to a foreign professional service limited liability company 41 which provides mental health counseling services as such services are 42 defined in article 163 of the education law, each member of such foreign 43 professional service limited liability company must be licensed pursuant 44 to article 163 of the education law to practice mental health counseling 45 in this state. With respect to a foreign professional service limited 46 liability company which provides psychoanalysis services as such 47 services are defined in article 163 of the education law, each member of 48 such foreign professional service limited liability company must be 49 licensed pursuant to article 163 of the education law to practice 50 psychoanalysis in this state. [With respect to a foreign professional51service limited liability company which provides applied behavior analy-52sis services as such services are defined in article 167 of the educa-53tion law, each member of such foreign professional service limited54liability company must be licensed or certified pursuant to article 16755of the education law to practice applied behavior analysis in this56state.] A foreign professional service limited liability company formedA. 2588 7 1 to lawfully engage in the practice of public accountancy as a firm, as 2 such practice is defined under article 149 of the education law shall be 3 required to show (1) that a simple majority of the ownership of the 4 firm, in terms of financial interests and voting rights held by the 5 firm's owners, belongs to individuals licensed to practice public 6 accountancy in some state, and (2) that all members of a foreign limited 7 professional service limited liability company, whose principal place of 8 business is in this state, and who are engaged in the practice of public 9 accountancy in this state, hold a valid license issued under section 10 seventy-four hundred four of the education law. For purposes of this 11 subdivision, "financial interest" means capital stock, capital accounts, 12 capital contributions, capital interest, or interest in undistributed 13 earnings of a business entity. Although firms registered with the 14 education department may include non-licensee owners, a registered firm 15 and its owners must comply with rules promulgated by the state board of 16 regents. Notwithstanding the foregoing, a firm registered with the 17 education department may not have non-licensee owners if the firm's name 18 includes the words "certified public accountant," or "certified public 19 accountants," or the abbreviations "CPA" or "CPAs". Each non-licensee 20 owner of a firm that is registered under this section shall be (1) a 21 natural person who actively participates in the business of the firm or 22 its affiliated entities, or (2) an entity, including, but not limited 23 to, a partnership or professional corporation, provided each beneficial 24 owner of an equity interest in such entity is a natural person who 25 actively participates in the business conducted by the firm or its 26 affiliated entities. For purposes of this subdivision, "actively partic- 27 ipate" means to provide services to clients or to otherwise individually 28 take part in the day-to-day business or management of the firm or an 29 affiliated entity. 30 § 4. Paragraph (a) of section 1503 of the business corporation law, as 31 amended by chapter 475 of the laws of 2014, is amended to read as 32 follows: 33 (a) Notwithstanding any other provision of law, (i) one or more indi- 34 viduals duly authorized by law to render the same professional service 35 within the state may organize, or cause to be organized, a professional 36 service corporation for pecuniary profit under this article for the 37 purpose of rendering the same professional service, except that one or 38 more individuals duly authorized by law to practice professional engi- 39 neering, architecture, landscape architecture, land surveying or geology 40 within the state may organize, or cause to be organized, a professional 41 service corporation or a design professional service corporation for 42 pecuniary profit under this article for the purpose of rendering such 43 professional services as such individuals are authorized to practice, 44 and (ii) one or more individuals licensed to practice pursuant to arti- 45 cle one hundred thirty-one and one or more individuals licensed pursuant 46 to articles one hundred thirty-two, one hundred thirty-seven, one 47 hundred forty, one hundred forty-one, one hundred forty-three, one 48 hundred forty-four, one hundred fifty-three, one hundred fifty-four, one 49 hundred fifty-five, one hundred fifty-six, or one hundred sixty-seven or 50 subdivision three of section six thousand nine hundred two of article 51 one hundred thirty-nine of title eight of the education law may organ- 52 ize, or cause to be organized, for business purposes only, a profes- 53 sional service corporation formed for pecuniary profit under this arti- 54 cle for the purpose of rendering multidisciplinary services within such 55 a corporation as such individuals are authorized to practice individual- 56 ly in such individual's respective professions, subject to the followingA. 2588 8 1 conditions: (A) individual who organizes, or causes to organize, such 2 corporation must be licensed pursuant to title eight of the education 3 law to practice such individual's profession in this state; (B) each 4 member shall only practice such member's profession as specified in such 5 member's respective professional enabling statute under title eight of 6 the education law; and (C) any clinical integration of professional 7 practices under this section shall not alter, expand or curtail the 8 scope of practice of any of the members; (D) no individual shall, 9 directly or indirectly, interfere with the clinical judgment or legiti- 10 mate clinical practice of another individual; and (E) no individual 11 shall order or direct another individual to practice beyond the scope of 12 such individual's license. 13 § 5. Subdivision (q) of section 121-1500 of the partnership law, as 14 amended by chapter 701 of the laws of 2023, is amended to read as 15 follows: 16 (q) Each partner of a registered limited liability partnership formed 17 to provide medical services in this state must be licensed pursuant to 18 article 131 of the education law to practice medicine in this state [and19each]. Notwithstanding any other provision of this section, any person 20 licensed pursuant to article 131 of the education law to practice medi- 21 cine and any person licensed pursuant to articles 132, 137, 140, 141, 22 143, 144, 153, 154, 155, 156, or 167 or subdivision 3 of section 6902 of 23 article 139 of the education law may form, or cause to be formed, a 24 registered limited liability partnership to provide multidisciplinary 25 services with one or more licensed professionals, subject to the follow- 26 ing conditions: (i) each partner of such limited liability partnership 27 must be licensed pursuant to title eight of the education law to prac- 28 tice such partner's profession in this state; (ii) each partner shall 29 only practice such partner's profession as specified in such partner's 30 respective professional enabling statute under title eight of the educa- 31 tion law; and (iii) any clinical integration of the professional prac- 32 tices under this section shall not alter, expand or curtail the scope of 33 practice of any of the partners; provided further that: (A) no partner 34 shall, directly or indirectly, interfere with the clinical judgment or 35 legitimate clinical practice of another partner; and (B) no partner 36 shall order or direct another partner to practice beyond the scope of 37 such partner's license. Each partner of a registered limited liability 38 partnership formed to provide dental services in this state must be 39 licensed pursuant to article 133 of the education law to practice 40 dentistry in this state. Each partner of a registered limited liability 41 partnership formed to provide veterinary services in this state must be 42 licensed pursuant to article 135 of the education law to practice veter- 43 inary medicine in this state. Each partner of a registered limited 44 liability partnership formed to provide public accountancy services as a 45 firm, whose principal place of business is in this state and who 46 provides public accountancy services, must be licensed pursuant to arti- 47 cle 149 of the education law to practice public accountancy in this 48 state. Each partner of a registered limited liability partnership formed 49 to provide professional engineering, land surveying, geological 50 services, architectural and/or landscape architectural services in this 51 state must be licensed pursuant to article 145, article 147 and/or arti- 52 cle 148 of the education law to practice one or more of such professions 53 in this state. [Each partner of a registered limited liability partner-54ship formed to provide licensed clinical social work services in this55state must be licensed pursuant to article 154 of the education law to56practice clinical social work in this state.] Each partner of a regis-A. 2588 9 1 tered limited liability partnership formed to provide creative arts 2 therapy services in this state must be licensed pursuant to article 163 3 of the education law to practice creative arts therapy in this state. 4 Each partner of a registered limited liability partnership formed to 5 provide marriage and family therapy services in this state must be 6 licensed pursuant to article 163 of the education law to practice 7 marriage and family therapy in this state. Each partner of a registered 8 limited liability partnership formed to provide mental health counseling 9 services in this state must be licensed pursuant to article 163 of the 10 education law to practice mental health counseling in this state. Each 11 partner of a registered limited liability partnership formed to provide 12 psychoanalysis services in this state must be licensed pursuant to arti- 13 cle 163 of the education law to practice psychoanalysis in this state. 14 [Each partner of a registered limited liability partnership formed to15provide applied behavior analysis service in this state must be licensed16or certified pursuant to article 167 of the education law to practice17applied behavior analysis in this state.] A registered limited liability 18 partnership formed to lawfully engage in the practice of public accoun- 19 tancy as a firm, as such practice is defined under article 149 of the 20 education law, shall be required to show (1) that a simple majority of 21 the ownership of the firm, in terms of financial interests and voting 22 rights held by the firm's owners, belongs to individuals licensed to 23 practice public accountancy in some state, and (2) that all partners of 24 a limited liability partnership whose principal place of business is in 25 this state, and who are engaged in the practice of public accountancy in 26 this state, hold a valid license issued under section seventy-four 27 hundred four of the education law. For purposes of this subdivision, 28 "financial interest" means capital stock, capital accounts, capital 29 contributions, capital interest, or interest in undistributed earnings 30 of a business entity. Although firms registered with the education 31 department may include non-licensee owners, the firm and its owners must 32 comply with rules promulgated by the state board of regents. Notwith- 33 standing the foregoing, a firm registered with the education department 34 may not have non-licensee owners if the firm's name includes the words 35 "certified public accountant," or "certified public accounts," or the 36 abbreviations "CPA" or "CPAs". Each non-licensee owner of a firm that is 37 formed under this section shall be (1) a natural person who actively 38 participates in the business of the firm or its affiliated entities, or 39 (2) an entity, including, but not limited to, a partnership or profes- 40 sional corporation, provided each beneficial owner of an equity interest 41 in such entity is a natural person who actively participates in the 42 business conducted by the firm or its affiliated entities. For purposes 43 of this subdivision, "actively participate" means to provide services to 44 clients or to otherwise individually take part in the day-to-day busi- 45 ness or management of the firm or an affiliated entity. 46 § 6. Subdivision (q) of section 121-1502 of the partnership law, as 47 amended by chapter 701 of the laws of 2023, is amended to read as 48 follows: 49 (q) Each partner of a foreign limited liability partnership which 50 provides medical services in this state must be licensed pursuant to 51 article 131 of the education law to practice medicine in the state [and52each]. Notwithstanding any other provision of this section, any person 53 licensed pursuant to article 131 of the education law to practice medi- 54 cine and any person licensed pursuant to articles 132, 137, 140, 141, 55 143, 144, 153, 154, 155, 156, or 167 or subdivision 3 of section 6902 of 56 article 139 of the education law may form, or cause to be formed, aA. 2588 10 1 registered limited liability partnership to provide multidisciplinary 2 services with one or more licensed professionals, subject to the follow- 3 ing conditions: (i) each partner of such limited liability partnership 4 must be licensed pursuant to title eight of the education law to prac- 5 tice such partner's profession in this state; (ii) each partner shall 6 only practice such partner's profession as specified in such partner's 7 respective professional enabling statute under title eight of the 8 education law; and (iii) any clinical integration of the professional 9 practices under this section shall not alter, expand or curtail the 10 scope of practice of any of the partners; provided further that: 11 (A) no partner shall, directly or indirectly, interfere with the clin- 12 ical judgment or legitimate clinical practice of another partner; 13 and (B) no partner shall order or direct another partner to practice 14 beyond the scope of such partner's license. Each partner of a foreign 15 limited liability partnership which provides dental services in the 16 state must be licensed pursuant to article 133 of the education law to 17 practice dentistry in this state. Each partner of a foreign limited 18 liability partnership which provides veterinary service in the state 19 shall be licensed pursuant to article 135 of the education law to prac- 20 tice veterinary medicine in this state. Each partner of a foreign limit- 21 ed liability partnership which provides professional engineering, land 22 surveying, geological services, architectural and/or landscape architec- 23 tural services in this state must be licensed pursuant to article 145, 24 article 147 and/or article 148 of the education law to practice one or 25 more of such professions. Each partner of a foreign limited liability 26 partnership formed to provide public accountancy services as a firm, 27 whose principal place of business is in this state and who provides 28 public accountancy services, must be licensed pursuant to article 149 of 29 the education law to practice public accountancy in this state. [Each30partner of a foreign limited liability partnership which provides31licensed clinical social work services in this state must be licensed32pursuant to article 154 of the education law to practice licensed clin-33ical social work in this state.] Each partner of a foreign limited 34 liability partnership which provides creative arts therapy services in 35 this state must be licensed pursuant to article 163 of the education law 36 to practice creative arts therapy in this state. Each partner of a 37 foreign limited liability partnership which provides marriage and family 38 therapy services in this state must be licensed pursuant to article 163 39 of the education law to practice marriage and family therapy in this 40 state. Each partner of a foreign limited liability partnership which 41 provides mental health counseling services in this state must be 42 licensed pursuant to article 163 of the education law to practice mental 43 health counseling in this state. Each partner of a foreign limited 44 liability partnership which provides psychoanalysis services in this 45 state must be licensed pursuant to article 163 of the education law to 46 practice psychoanalysis in this state. [Each partner of a foreign limit-47ed liability partnership which provides applied behavior analysis48services in this state must be licensed or certified pursuant to article49167 of the education law to practice applied behavior analysis in this50state.] A foreign limited liability partnership formed to lawfully 51 engage in the practice of public accountancy as a firm, as such practice 52 is defined under article 149 of the education law, shall be required to 53 show (1) that a simple majority of the ownership of the firm, in terms 54 of financial interests and voting rights held by the firm's owners, 55 belongs to individuals licensed to practice public accountancy in some 56 state, and (2) that all partners of the foreign limited liability part-A. 2588 11 1 nership whose principal place of business is in this state, and who are 2 engaged in the practice of public accountancy in this state, hold a 3 valid license issued under section seventy-four hundred four of the 4 education law. For purposes of this subdivision, "financial interest" 5 means capital stock, capital accounts, capital contributions, capital 6 interest, or interest in undistributed earnings of a business entity. 7 Although firms registered with the education department may include 8 non-licensee owners, a registered firm and its owners must comply with 9 rules promulgated by the state board of regents. Notwithstanding the 10 foregoing, a firm registered with the education department may not have 11 non-licensee owners if the firm's name includes the words "certified 12 public accountant," or "certified public accountants," or the abbrevi- 13 ations "CPA" or "CPAs". Each non-licensee owner of a firm that is formed 14 under this section shall be (1) a natural person who actively partic- 15 ipates in the business of the firm or its affiliated entities, or (2) an 16 entity, including, but not limited to, a partnership or professional 17 corporation, provided that each beneficial owner of an equity interest 18 in such entity is a natural person who actively participates in the 19 business conducted by the firm or its affiliated entities. For purposes 20 of this subdivision, "actively participate" means to provide services to 21 clients or to otherwise individually take part in the day-to-day busi- 22 ness or management of the firm or an affiliated entity. 23 § 7. Section 6509-a of the education law, as amended by chapter 555 of 24 the laws of 1993, is amended to read as follows: 25 § 6509-a. Additional definition of professional misconduct; limited 26 application. Notwithstanding any inconsistent provision of this article 27 or of any other provision of law to the contrary, the license or regis- 28 tration of a person subject to the provisions of articles one hundred 29 thirty-two, one hundred thirty-three, one hundred thirty-six, one 30 hundred thirty-seven, one hundred thirty-nine, one hundred forty-one, 31 one hundred forty-three, one hundred forty-four, one hundred fifty-six, 32 one hundred fifty-nine and one hundred sixty-four of this chapter may be 33 revoked, suspended or annulled or such person may be subject to any 34 other penalty provided in section sixty-five hundred eleven of this 35 article in accordance with the provisions and procedure of this article 36 for the following: 37 That any person subject to the above enumerated articles, has directly 38 or indirectly requested, received or participated in the division, 39 transference, assignment, rebate, splitting or refunding of a fee for, 40 or has directly requested, received or profited by means of a credit or 41 other valuable consideration as a commission, discount or gratuity in 42 connection with the furnishing of professional care, or service, includ- 43 ing x-ray examination and treatment, or for or in connection with the 44 sale, rental, supplying or furnishing of clinical laboratory services or 45 supplies, x-ray laboratory services or supplies, inhalation therapy 46 service or equipment, ambulance service, hospital or medical supplies, 47 physiotherapy or other therapeutic service or equipment, artificial 48 limbs, teeth or eyes, orthopedic or surgical appliances or supplies, 49 optical appliances, supplies or equipment, devices for aid of hearing, 50 drugs, medication or medical supplies or any other goods, services or 51 supplies prescribed for medical diagnosis, care or treatment under this 52 chapter, except payment, not to exceed thirty-three and one-third per 53 centum of any fee received for x-ray examination, diagnosis or treat- 54 ment, to any hospital furnishing facilities for such examination, diag- 55 nosis or treatment. Nothing contained in this section shall prohibit 56 such persons from practicing as partners, in groups or as a professionalA. 2588 12 1 corporation or as a university faculty practice corporation nor from 2 pooling fees and moneys received, either by the partnerships, profes- 3 sional corporations, university faculty practice corporations or groups 4 by the individual members thereof, for professional services furnished 5 by any individual professional member, or employee of such partnership, 6 corporation or group, nor shall the professionals constituting the part- 7 nerships, corporations or groups be prohibited from sharing, dividing or 8 apportioning the fees and moneys received by them or by the partnership, 9 corporation or group in accordance with a partnership or other agree- 10 ment; provided that no such practice as partners, corporations or in 11 groups or pooling of fees or moneys received or shared, division or 12 apportionment of fees shall be permitted with respect to care and treat- 13 ment under the workers' compensation law except as expressly authorized 14 by the workers' compensation law. Nothing contained in this section 15 shall prohibit a multidisciplinary services practice formed pursuant to 16 subdivision (a) of section twelve hundred three of the limited liability 17 company law, subdivision (b) of section twelve hundred seven of the 18 limited liability company law, subdivision (a) of section thirteen 19 hundred one of the limited liability company law, paragraph (a) of 20 section fifteen hundred three of the business corporation law, subdivi- 21 sion (q) of section 121-1500 of the partnership law, or subdivision (q) 22 of section 121-1502 of the partnership law from pooling fees or monies 23 received. Nothing contained in this chapter shall prohibit a medical or 24 dental expense indemnity corporation pursuant to its contract with the 25 subscriber from prorationing a medical or dental expense indemnity 26 allowance among two or more professionals in proportion to the services 27 rendered by each such professional at the request of the subscriber, 28 provided that prior to payment thereof such professionals shall submit 29 both to the medical or dental expense indemnity corporation and to the 30 subscriber statements itemizing the services rendered by each such 31 professional and the charges therefor. 32 § 8. Subdivision 19 of section 6530 of the education law, as added by 33 chapter 606 of the laws of 1991, is amended to read as follows: 34 19. Permitting any person to share in the fees for professional 35 services, other than: a partner, employee, associate in a professional 36 firm or corporation, professional subcontractor or consultant authorized 37 to practice medicine, [or] a legally authorized trainee practicing under 38 the supervision of a licensee, or an authorized professional licensed 39 pursuant to article one hundred thirty-one, one hundred thirty-two, one 40 hundred thirty-seven, one hundred forty, one hundred forty-one, one 41 hundred forty-three, one hundred forty-four, one hundred fifty-three, 42 one hundred fifty-four, one hundred fifty-five, one hundred fifty-six, 43 one hundred fifty-nine, or one hundred sixty-seven or subdivision three 44 of section sixty-nine hundred two of article one hundred thirty-nine of 45 this chapter providing professional services in the same practice. This 46 prohibition shall include any arrangement or agreement whereby the 47 amount received in payment for furnishing space, facilities, equipment 48 or personnel services used by a licensee constitutes a percentage of, or 49 is otherwise dependent upon, the income or receipts of the licensee from 50 such practice, except as otherwise provided by law with respect to a 51 facility licensed pursuant to article twenty-eight of the public health 52 law or article thirteen of the mental hygiene law; 53 § 9. Section 6531 of the education law, as amended by chapter 555 of 54 the laws of 1993, is amended to read as follows: 55 § 6531. Additional definition of professional misconduct, limited 56 application. Notwithstanding any inconsistent provision of this articleA. 2588 13 1 or any other provisions of law to the contrary, the license or registra- 2 tion of a person subject to the provisions of this article and article 3 one hundred thirty-one-B of this chapter may be revoked, suspended, or 4 annulled or such person may be subject to any other penalty provided in 5 section two hundred thirty-a of the public health law in accordance with 6 the provisions and procedures of this article for the following: 7 That any person subject to the above-enumerated articles has directly 8 or indirectly requested, received or participated in the division, 9 transference, assignment, rebate, splitting, or refunding of a fee for, 10 or has directly requested, received or profited by means of a credit or 11 other valuable consideration as a commission, discount or gratuity, in 12 connection with the furnishing of professional care or service, includ- 13 ing x-ray examination and treatment, or for or in connection with the 14 sale, rental, supplying, or furnishing of clinical laboratory services 15 or supplies, x-ray laboratory services or supplies, inhalation therapy 16 service or equipment, ambulance service, hospital or medical supplies, 17 physiotherapy or other therapeutic service or equipment, artificial 18 limbs, teeth or eyes, orthopedic or surgical appliances or supplies, 19 optical appliances, supplies, or equipment, devices for aid of hearing, 20 drugs, medication, or medical supplies, or any other goods, services, or 21 supplies prescribed for medical diagnosis, care, or treatment under this 22 chapter, except payment, not to exceed thirty-three and one-third 23 percent of any fee received for x-ray examination, diagnosis, or treat- 24 ment, to any hospital furnishing facilities for such examination, diag- 25 nosis, or treatment. Nothing contained in this section shall prohibit 26 such persons from practicing as partners, in groups or as a professional 27 corporation or as a university faculty practice corporation, nor from 28 pooling fees and moneys received, either by the partnerships, profes- 29 sional corporations, or university faculty practice corporations or 30 groups by the individual members thereof, for professional services 31 furnished by an individual professional member, or employee of such 32 partnership, corporation, or group, nor shall the professionals consti- 33 tuting the partnerships, corporations or groups be prohibited from shar- 34 ing, dividing, or apportioning the fees and moneys received by them or 35 by the partnership, corporation, or group in accordance with a partner- 36 ship or other agreement; provided that no such practice as partners, 37 corporations, or groups, or pooling of fees or moneys received or 38 shared, division or apportionment of fees shall be permitted with 39 respect to and treatment under the workers' compensation law. Nothing 40 contained in this section shall prohibit a multidisciplinary services 41 practice formed pursuant to subdivision (a) of section twelve hundred 42 three of the limited liability company law, subdivision (b) of section 43 twelve hundred seven of the limited liability company law, subdivision 44 (a) of section thirteen hundred one of the limited liability company 45 law, paragraph (a) of section fifteen hundred three of the business 46 corporation law, subdivision (q) of section 121-1500 of the partnership 47 law, or subdivision (q) of section 121-1502 of the partnership law from 48 pooling fees or monies received. Nothing contained in this chapter shall 49 prohibit a corporation licensed pursuant to article forty-three of the 50 insurance law pursuant to its contract with the subscribed from prora- 51 tioning a medical or dental expenses indemnity allowance among two or 52 more professionals in proportion to the services rendered by each such 53 professional at the request of the subscriber, provided that prior to 54 payment thereof such professionals shall submit both to the corporation 55 licensed pursuant to article forty-three of the insurance law and to theA. 2588 14 1 subscriber statements itemizing the services rendered by each such 2 professional and the charges therefor. 3 § 10. Subdivision 1 of section 2801 of the public health law, as 4 amended by section 2 of part E of chapter 57 of the laws of 2023, is 5 amended to read as follows: 6 1. "Hospital" means a facility or institution engaged principally in 7 providing services by or under the supervision of a physician or, in the 8 case of a dental clinic or dental dispensary, of a dentist, or, in the 9 case of a midwifery birth center, of a midwife, for the prevention, 10 diagnosis or treatment of human disease, pain, injury, deformity or 11 physical condition, including, but not limited to, a general hospital, 12 public health center, diagnostic center, treatment center, a rural emer- 13 gency hospital under 42 USC 1395x(kkk), or successor provisions, dental 14 clinic, dental dispensary, rehabilitation center other than a facility 15 used solely for vocational rehabilitation, nursing home, tuberculosis 16 hospital, chronic disease hospital, maternity hospital, midwifery birth 17 center, lying-in-asylum, out-patient department, out-patient lodge, 18 dispensary and a laboratory or central service facility serving one or 19 more such institutions, but the term hospital shall not include an 20 institution, sanitarium or other facility engaged principally in provid- 21 ing services for the prevention, diagnosis or treatment of mental disa- 22 bility and which is subject to the powers of visitation, examination, 23 inspection and investigation of the department of mental hygiene except 24 for those distinct parts of such a facility which provide hospital 25 service. The provisions of this article shall not apply to a facility or 26 institution engaged principally in providing services by or under the 27 supervision of the bona fide members and adherents of a recognized reli- 28 gious organization whose teachings include reliance on spiritual means 29 through prayer alone for healing in the practice of the religion of such 30 organization and where services are provided in accordance with those 31 teachings or to a multidisciplinary services practice formed pursuant to 32 subdivision (a) of section twelve hundred three of the limited liability 33 company law, subdivision (b) of section twelve hundred seven of the 34 limited liability company law, subdivision (a) of section thirteen 35 hundred one of the limited liability company law, paragraph (a) of 36 section fifteen hundred three of the business corporation law, subdivi- 37 sion (q) of section 121-1500 of the partnership law, or subdivision (q) 38 of section 121-1502 of the partnership law. No provision of this article 39 or any other provision of law shall be construed to: (a) limit the 40 volume of mental health, substance use disorder services or develop- 41 mental disability services that can be provided by a provider of primary 42 care services licensed under this article and authorized to provide 43 integrated services in accordance with regulations issued by the commis- 44 sioner in consultation with the commissioner of the office of mental 45 health, the commissioner of the office of [alcoholism] addiction 46 services and [substance abuse services] supports and the commissioner of 47 the office for people with developmental disabilities, including regu- 48 lations issued pursuant to subdivision seven of section three hundred 49 sixty-five-l of the social services law or part L of chapter fifty-six 50 of the laws of two thousand twelve; (b) require a provider licensed 51 pursuant to article thirty-one of the mental hygiene law or certified 52 pursuant to article sixteen or article thirty-two of the mental hygiene 53 law to obtain an operating certificate from the department if such 54 provider has been authorized to provide integrated services in accord- 55 ance with regulations issued by the commissioner in consultation with 56 the commissioner of the office of mental health, the commissioner of theA. 2588 15 1 office of [alcoholism] addiction services and [substance abuse services] 2 supports and the commissioner of the office for people with develop- 3 mental disabilities, including regulations issued pursuant to subdivi- 4 sion seven of section three hundred sixty-five-l of the social services 5 law or part L of chapter fifty-six of the laws of two thousand twelve. 6 § 11. This act shall take effect on the thirtieth day after it shall 7 have become a law.
