Relates to licensing of appearance enhancement businesses

Summary of provisions

Amends Article 27 of the General Business Law as follows:

1. Amends Section 400 Law by adding a new subdivision 11, to incorporate the federal definition of "related person" (from section 465 of the internal revenue code). A "related person" generally means family members, a taxpayer and a corporation controlled directly or indirectly (through attribution from other family member stock holdings) by the taxpayer (more than 50% of the value of the stock), and a partner and a controlled (directly or indirectly) partnership, and other related parties, including a trust and its grantor, a trust and its beneficiary, and a personal services company and any shareholder-employee, as well as relationships between partners.

2. Amends section 410, Administration, to add prostitution offenses as grounds for suspension or revocation of a license and imposition of a fine on nail specialist, natural hair stylist, esthetician, cosmetolo- gist or appearance enhancement business; also eliminates the ability to issue a reprimand when there has been a criminal act after issuance of a license (fraud, grand larceny, perjury, robbery, manslaughter, kidnap- ping and unlawful imprisonment, prostitution offenses (new), unlawful weapons possession, criminal use of a weapon, criminal sale of a weapon, and sex offenses).

3. Further amends Section 410 to prohibit a person, or any related person, whose license has been revoked from obtaining a license within the same county within five years, in addition to the current one year revocation.

4. Adds a new section 412a to the article, "Additional Provisions With Respect To an Appearance Enhancement Business" with the following provisions:

*Allows any license or renewal to be revoked, cancelled, suspended, and/or subjected to the imposition of a civil penalty for cause and requires that the license be revoked upon conviction of any felony offense listed in paragraph f.of subdivision one of section 410 of this chapter.

*Defines "for cause" as the existence of a sustained and continuing pattern of noise, disturbance, misconduct, or disorder on or about the licensed premises, related to the operation of the premises or the conduct of its patrons, which adversely affects the health, welfare, or safety of the inhabitants of the area in which such licensed premises are located. Adds that this will be presumed upon the fourth incident reported within a 180 day period to a law enforcement agency of noise or disturbance or misconduct or disorder on or about the licensed premises or related to the operation of the premises or the conduct of its patrons.

*Allows unlicensed entities up to one month after notification to apply for a license and up to one year to obtain it. If application for a license is not made within three months of notification, the person, company, and related person are ineligible to apply for five years.

*Two or more convictions for prostitution offenses within one year will be presumptive evidence of conduct constituting use of the premises for purposes of prostitution, and the business location shall be subject to Title 2 of Article 23 of the public health law, which allows closure, forfeiture of property, and other actions.

*Prohibits operation between midnight and 5 a m., except where an appearance enhancement business is located in a health care facility, a hotel, motel, or bed and breakfast, a timeshare, an airport, a pari-mu- tuel facility, or is run during a special event approved by the county or municipality in which the establishment operates, provided however that any procedure performed can only be by an individual licensed to perform such procedure under this article. Makes it a misdemeanor to violate this curfew once, with a six months imprisonment or a fine of $500 or both, and makes a second or subsequent violation within a five year period a class E felony.

*Requires posting of the toll-free number, address and other pertinent information as determined and required by the secretary of the National Human Trafficking Resource Center in an area easily observable to patrons, employees, and visitors, by any enhancement business which does not provide full service.

*Adds the corporation counsel in NYC to the State Attorney General and the Secretary of State as an entity which may obtain an order enjoining or restraining commission or continuance of the unlawful acts complained of. The remedy provided in this section shall be in addition to any other remedy provided by law or to the proceedings commenced against a licensee under this title.

*Adds human trafficking as defined in section 230.34 of the penal law and/or labor trafficking as defined in section 135.35 of the penal law as an specified offense under Article 13-A of the CPLR, the Proceeds of a Crime-Forfeiture statute. This allows a civil action to be taken by the appropriate claiming authority against a criminal defendant to recover property which constitutes the proceeds of a crime, the substi-

tuted proceeds of a crime, an instrumentality of a crime, and the real property instrumentality of a crime, and/or to recover a money judgment in an amount equivalent in value.

Existing law

New bill.

Justification

While there are many good and appropriate businesses providing nail specialist, natural hair stylist, esthetician, and cosmetologists services, or appearance enhancement businesses, there are too many unli- censed fronts which are actually engaged in other activities. This legislation will severely restrict such operations. To summarize its provisions, it:

*Includes prostitution as reasons for a license to be suspended or revoked, or a fine imposed.

*Eliminates the ability to issue a reprimand in place of a fine or a revocation when there has been a criminal offense.

*Prohibits a person or related person whose appearance enhancement busi- ness license has been revoked from obtaining a license within the same county for five years, in addition to the current one year revocation.

*Provides a three-month grace period for applying for a license and one year for obtaining a license for a person who has operated without a license, but then prohibits a person or a related person under IRC code who fails to comply from obtaining a license for five years. A "related person" generally includes family members and business relationships.

*Makes the place of business of a nail specialist, natural hair stylist, esthetician, cosmetologist or appearance enhancement business a "dwell- ing" for purposes of presumption of conduct constituting use of the premises for prostitution, which can result in such remedies as injunc- tions, abatement, sale and removal of property, and other remedies.

*Allows the NYC corporation counsel as well as the Attorney General and the Department of State to obtain an order enjoining or restraining commission or continuance of unlawful acts by an appearance enhancement business.

*Prohibits operation between midnight and 5 a.m. except in certain instances.

*Requires posting of human trafficking information at the place of busi- ness, and establishes forfeiture provisions to be used against the busi- ness.

Fiscal implications

To be determined, but it is likely that this will result in an increase in licensing and fine revenues.

Effective date

Immediate.