senate Bill S3570

Relates to participation in state contracts by certified minority and women-owned business enterprises; relates to certain performance and payment bond requirements

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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  • 06 / Feb / 2013
    • REFERRED TO FINANCE
  • 08 / Jan / 2014
    • REFERRED TO FINANCE

Summary

Relates to increased participation in state contracts and subcontracts by certified minority and women-owned business enterprises; requires quarterly reports from contracting agencies; addresses consequences if contracting agency fails to comply with reporting requirements; relates to certain performance and payment bond requirements.

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Bill Details

Versions:
S3570
Legislative Cycle:
2013-2014
Current Committee:
Senate Finance
Law Section:
Executive Law
Laws Affected:
Amd §§311, 312, 313, 315 & 316, Exec L; amd §§137, 139-f & 139-g, St Fin L
Versions Introduced in 2011-2012 Legislative Cycle:
S4457

Sponsor Memo

BILL NUMBER:S3570

TITLE OF BILL: An act to amend the executive law, in relation to
participation by minority group members and women with respect to
certain state contracts; and to amend the state finance law, in relation
to performance and payment bond requirements

PURPOSE: Minority and women-owned businesses have come to constitute a
large percentage of businesses in New York MWBEs, just like small busi-
nesses, are an increasingly crucial part of the state's economy, and
contribute vastly to our economy's growth. However, despite these
increases, MWBEs continue to face barriers in government contracting.
This bill seeks to address and eliminate some of these barriers by
enhancing Article 15-A provisions and increasing small business and
minority and women-owned business enterprise (MWBE) participation in
State agency commodity and service procurement and state public authori-
ty assisted, construction and rehabilitation project contracts and
subcontracts.

SUMMARY OF PROVISIONS:

* Creates a Small Business and MWBE Mentor/protege Program.

* Creates violations against contractors failing to comply with Article
15-A.

* Expands contracting opportunities to certified MWBEs by creating a
Division web site where certified MWBEs can access contracting and
subcontracting opportunities.

* Requires contractors to provide utilization plans at the time a bid is
submitted.

* Requires the posting of contractor MWBE utilization plans and prohib-
its the use of automatic waivers.

* Requires a contracting agency to notify both the winning bidder and
any certified MWBE affiliated with such winning bid.

* Provides for greater contracting opportunities by alleviating the
burden of performance and payment bonds for small businesses and certi-
fied MWBEs when the aggregate amount of the contract is under
$1,000,000.

* Increases MWBE and small business participation in state public
authority assisted, construction and rehabilitation projects.

JUSTIFICATION: Public purchasing is one of government's most important
functions. Its effective use or potential abuse can have a substantial
impact on governmental efficiency, the income of particular companies
and communities, and the financial burden of taxpayers. Over many years,

minority-owned and women-owned businesses have experienced difficulties
in tapping into government procurement purchasing programs. Barriers to
government contracts still exist for MWBEs because they are smaller in
size and fewer in number than majority-firms. Small businesses experi-
ence similar barriers when trying to participate in government contract-
ing.

According to the Division of Minority and Women Business Development,
MWBEs represent 943,616 firms in New York, generating over $100 Billion
in revenues alone in 2006. According to the Census, New York ranks first
in the number of black-owned firms (with 129,324), second in women-owned
firms (505,134), and fourth in Hispanic-owned firms (163,639). However,
as of March 31, 2003, the Division reported that there were 6,843 MWBE-
certified businesses in New York State. About half of these firms are
located in the New York City region. The Division reports that State
agency expenditures for MWBEs statewide totaled $558 million, $480
million, and $513 million respectively, 2001-2002, 2002-2003, and 2004-
2005 State Fiscal Years.

Problems with the implementation of Article 15-A include, but are not
limited to, lack of enforcement measures. Currently, the statute
provides no penalty for contractors who intentionally use or acquire an
MWBE name through deceit or fraud.

Historically speaking, the Pataki Administration failed to effectively
administer the State's MWBE programs. Between SFY 2001-02 and SFY 2004-
05, there was a 33% decline in the total dollar volume of State agency
contracts being let to MWBEs.

* In SFY 2001-02 New York State agencies entered into $7.4 billion in
service, technology, commodity and construction contracts.

* $558 million (or 7.5%) of these SFY 2001-02 contracts were let to
MWEEs.

* In SFY 2004-05 New York State agencies entered into $10.1 billion in
service, technology, commodity and construction contracts.

* $513 million (or 5%) of these SFY 2004-05 contracts were let to MWBEs.

LEGISLATIVE HISTORY: S.2431 of 2007-08: Referred to Finance S.4457 of
2011-12: Referred to Finance

FISCAL IMPLICATIONS: Minimal.

LOCAL FISCAL IMPLICATIONS: Minimal.

EFFECTIVE DATE: This act shall take effect immediately, with
provisions.

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

                                  3570

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 6, 2013
                               ___________

Introduced  by  Sen.  SMITH  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Finance

AN ACT to amend the executive  law,  in  relation  to  participation  by
  minority  group  members  and  women  with  respect  to  certain state
  contracts; and to amend the state finance law, in relation to perform-
  ance and payment bond requirements

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

  Section  1.  Subdivisions 3 and 4 of section 311 of the executive law,
subdivision 3 as added by chapter 261 of the laws  of  1988,  paragraphs
(d)  and  (e)  of  subdivision 3 as amended by chapter 55 of the laws of
1992, paragraphs (g) and (h) of subdivision 3 as amended  and  paragraph
(i)  of  subdivision 3 as added by section 1 of part BB of chapter 59 of
the laws of 2006 and subdivision 4 as amended by chapter 361 of the laws
of 2009, are amended to read as follows:
  3. The director shall have the following powers and duties:
  (a) to encourage and assist contracting agencies in their  efforts  to
increase  participation by minority and women-owned business enterprises
on state contracts and subcontracts so as to facilitate the award  of  a
fair  share  of  such contracts to them AND TO PROVIDE ON THE DIVISION'S
WEBSITE A LIST OF EACH CONTRACTING  AGENCY'S  MINORITY  AND  WOMEN-OWNED
BUSINESS ENTERPRISES CERTIFICATION OUTREACH SEMINARS;
  (b) to develop standardized forms and reporting documents necessary to
implement this article;
  (c)  to conduct educational OUTREACH programs TO ENCOURAGE THE CERTIF-
ICATION OF MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES consistent with
the purposes of this article;
  (d) to review [periodically] QUARTERLY the practices and procedures of
each contracting agency with respect to compliance with  the  provisions
of  this  article,  and  to  require  them  to file [periodic] QUARTERLY
reports with the division of minority and women's  business  development

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07548-01-3

S. 3570                             2

as to the level of minority and women-owned business enterprises partic-
ipation  in  the  awarding  of  agency  contracts for goods and services
INCLUDING BUT NOT LIMITED TO THE NUMBER OF STATE  CONTRACTS  AWARDED  TO
CERTIFIED  MINORITY-OWNED OR WOMEN-OWNED BUSINESS ENTERPRISES, THE MAXI-
MUM DOLLAR AMOUNT OBLIGATED PURSUANT TO ALL  THOSE  CONTRACTS,  AND  THE
TOTAL  EXPENDITURES  MADE  PURSUANT TO ALL SUCH CONTRACTS; THE NUMBER OF
STATE CONTRACTS AWARDED TO CERTIFIED MINORITY  OR  WOMEN-OWNED  BUSINESS
ENTERPRISES,  THE  MAXIMUM DOLLAR AMOUNT OBLIGATED PURSUANT TO ALL THOSE
CONTRACTS,  AND  THE  TOTAL  EXPENDITURES  MADE  PURSUANT  TO  ALL  SUCH
CONTRACTS;  THE NUMBER OF STATE CONTRACTS AWARDED WHICH INCLUDE A UTILI-
ZATION  PLAN  FOR  BUSINESS  PARTICIPATION  BY  CERTIFIED  MINORITY   OR
WOMEN-OWNED  BUSINESS ENTERPRISES, THE MAXIMUM AMOUNT OBLIGATED PURSUANT
TO THOSE CONTRACTS, AND THE TOTAL EXPENDITURES MADE PURSUANT TO ALL SUCH
CONTRACTS; THE NUMBER OF STATE CONTRACTS AWARDED UPON WHICH A WAIVER WAS
GRANTED FROM GOALS REQUIRED BY THE CONTRACTS FOR BUSINESS  PARTICIPATION
BY CERTIFIED MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES, AND THE MAXI-
MUM  AMOUNT  OBLIGATED  PURSUANT TO THOSE CONTRACTS; THE NUMBER OF STATE
CONTRACTS AWARDED WHICH REQUIRED GOALS FOR EMPLOYMENT OF MINORITY  GROUP
MEMBERS  AND  WOMEN; AND THE NUMBER OF STATE CONTRACTS AWARDED FOR WHICH
WAIVERS OF EMPLOYMENT GOALS REQUIRED BY THE CONTRACTS HAVE BEEN GRANTED;
  (e) on January first of each year report to the governor,  THE  TEMPO-
RARY  PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, THE MINORITY
LEADERS OF THE SENATE AND THE ASSEMBLY,  and  the  chairpersons  of  the
senate  finance  and  assembly  ways and means committees on the [level]
ACTUAL VERSUS PROJECTED LEVELS  of  minority  and  women-owned  business
enterprises  participating  in  each agency's contracts for goods [and],
services AND CONSTRUCTION, INCLUDING BUT NOT LIMITED TO  THE  NUMBER  OF
STATE CONTRACTS AWARDED TO CERTIFIED MINORITY-OWNED OR WOMEN-OWNED BUSI-
NESS  ENTERPRISES,  THE  MAXIMUM DOLLAR AMOUNT OBLIGATED PURSUANT TO ALL
THOSE CONTRACTS, AND THE TOTAL EXPENDITURES MADE PURSUANT  TO  ALL  SUCH
CONTRACTS,  and on activities of the office and effort by each contract-
ing agency to promote employment of minority group  members  and  women,
and  to  promote and increase participation by certified businesses with
respect to state contracts and subcontracts  so  as  to  facilitate  the
award  of  a fair share of state contracts to such businesses. The comp-
troller shall assist the  division  in  collecting  information  on  the
participation  of  certified  business for each contracting agency. Such
report may recommend new  activities  and  programs  to  effectuate  the
purposes of this article;
  (f)  THE DIRECTOR SHALL LIST IN THE DIVISION'S ANNUAL REPORT THE NAMES
OF NON-COMPLIANT AGENCIES AND  THE  EXTENT  OF  THEIR  NONCOMPLIANCE  IN
SUBMITTING  ITS  QUARTERLY  MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISE
UTILIZATION REPORTS; AND, SHALL IMPLEMENT A MASTER LIST OF ALL THE STATE
AGENCIES REQUIRED TO FILE QUARTERLY COMPLIANCE REPORTS AND SHALL  ATTACH
SUCH LIST TO THE DIVISION'S ANNUAL REPORT.
  (G)  to  prepare  and  update  [periodically] QUARTERLY a directory of
certified minority and women-owned  business  enterprises  which  shall,
wherever  practicable,  be  divided  into categories of labor, services,
supplies, equipment, materials and recognized  construction  trades  and
which  shall  indicate areas or locations of the state where such enter-
prises are available to perform services, AND TO USE THIS INFORMATION TO
CREATE AN INTERNET BASED, CENTRALIZED STATE REGISTRY TO ENABLE APPROPRI-
ATE STATE CERTIFIED MINORITY AND  WOMEN-OWNED  BUSINESS  ENTERPRISES  TO
ACCESS CONTRACT AND SUBCONTRACT OPPORTUNITIES;
  [(g)]  (H)  to appoint independent hearing officers who by contract or
terms of employment shall preside over adjudicatory hearings pursuant to

S. 3570                             3

section three hundred fourteen of this article for the  office  and  who
are assigned no other work by the office;
  [(h)]  (I) notwithstanding the provisions of section two hundred nine-
ty-six of this chapter, to file a complaint pursuant to  the  provisions
of  section  two hundred ninety-seven of this chapter where the director
has knowledge that a contractor may  have  violated  the  provisions  of
paragraph  (a),  (b)  or  (c)  of subdivision one of section two hundred
ninety-six of this chapter where such violation is  unrelated,  separate
or distinct from the state contract as expressed by its terms; and
  [(i)]  (J)  to  streamline  the  state certification process to accept
federal and municipal corporation certifications.
  4. The director [may] SHALL  provide  assistance  to,  and  facilitate
access to programs serving certified businesses as well as applicants to
ensure  that such businesses benefit, as needed, from technical, manage-
rial and financial, and general business assistance;  training;  market-
ing;  organization  and  personnel skill development; project management
assistance; technology assistance; bond and insurance education  assist-
ance; and other business development assistance. In addition, the direc-
tor [may] SHALL, either independently or in conjunction with other state
agencies:
  (a)  develop  a  clearinghouse of information on programs and services
provided by entities that may assist such businesses;
  (b) review bonding and paperwork requirements imposed  by  contracting
agencies that may unnecessarily impede the ability of such businesses to
compete; and
  (c)  seek to maximize utilization by minority and women-owned business
enterprises of available federal resources including but not limited  to
federal grants, loans, loan guarantees, surety bonding guarantees, tech-
nical  assistance,  and programs and services of the federal small busi-
ness administration.
  S 2. Subdivision 5 of section 312 of the executive law,  as  added  by
chapter 261 of the laws of 1988, is amended to read as follows:
  5.  The director shall promulgate rules and regulations to ensure that
contractors and subcontractors undertake programs of affirmative  action
and equal employment opportunity as required by this section. Such rules
and regulations as they pertain to any particular agency shall be devel-
oped  after consultation with contracting agencies. Such rules and regu-
lations [may] SHALL require a contractor, after notice in a  bid  solic-
itation,  to  submit  an equal employment opportunity program [after bid
opening and prior to the award of any contract] AT  THE  TIME  BIDS  ARE
SUBMITTED,  and  [may]  SHALL require the contractor or subcontractor to
submit compliance reports relating to the  contractor's  or  subcontrac-
tor's  operation  and implementation of any equal employment opportunity
program in effect as of the date the contract is executed. The contract-
ing agency [may recommend to the director that] SHALL HAVE THE RIGHT  TO
RECOMMEND  THAT  the  director  take appropriate action according to the
procedures set forth in section three hundred sixteen  of  this  article
against  the  contractor for noncompliance with the requirements of this
section. The contracting agency  shall  be  responsible  for  monitoring
compliance with this section.
  S  3.  Paragraphs (h) and (i) of subdivision 2-a of section 313 of the
executive law, as added by chapter 175 of the laws of 2010, are  amended
and a new paragraph (j) is added to read as follows:
  (h)  provide  for  the  collection  of statistical data by each agency
concerning actual minority and women-owned business  enterprise  partic-
ipation; [and]

S. 3570                             4

  (i)  require  each  agency to consult the most current disparity study
when calculating agency-wide and contract specific  participation  goals
pursuant to this article[.]; AND
  (J)   ENCOURAGE   JOINT  VENTURES,  PARTNERSHIPS,  AND  MENTOR-PROTEGE
RELATIONSHIPS AS DEFINED IN SECTION ONE HUNDRED FORTY-SEVEN OF THE STATE
FINANCE LAW, BETWEEN PRIME  CONTRACTORS  AND  MINORITY  AND  WOMEN-OWNED
BUSINESS ENTERPRISES.
  S  4.  Subdivision 3 and paragraph (a) of subdivision 5 of section 313
of the executive law, as amended by chapter 175 of the laws of 2010, are
amended to read as follows:
  3. Solely for the purpose of providing the opportunity  for  [meaning-
ful]  INCREASED participation by certified businesses in the performance
of state contracts as provided in this section,  state  contracts  shall
include leases of real property by a state agency to a lessee where: the
terms  of such leases provide for the construction, demolition, replace-
ment, major repair or renovation of real property and improvements ther-
eon by such lessee; and  the  cost  of  such  construction,  demolition,
replacement,  major  repair  or renovation of real property and improve-
ments thereon shall exceed the sum  of  one  hundred  thousand  dollars.
Reports  to  the  director  pursuant to section three hundred fifteen of
this article shall include activities with respect  to  all  such  state
contracts.  Contracting agencies shall include or require to be included
with respect to state contracts for the acquisition, construction, demo-
lition, replacement, major repair or renovation  of  real  property  and
improvements  thereon,  such  provisions  as [may] SHALL be necessary to
effectuate the provisions of this section in every bid specification and
state contract, including, but not limited to: (a) provisions  requiring
contractors  to make a good faith effort to solicit active participation
by enterprises identified  in  the  directory  of  certified  businesses
provided  to  the  contracting  agency  by the office; (b) requiring the
parties to agree as a condition of entering into such  contract,  to  be
bound  by  the provisions of section three hundred sixteen of this arti-
cle; and (c) requiring the contractor  to  include  the  provisions  set
forth in paragraphs (a) and (b) of this subdivision in every subcontract
in  a manner that the provisions will be binding upon each subcontractor
as to work in connection with such contract. Provided, however, that  no
such  provisions  shall be binding upon contractors or subcontractors in
the performance of work or the provision of services that are unrelated,
separate or distinct from the state contract as expressed by its  terms,
and  nothing  in  this  section  shall  authorize  the  director  or any
contracting agency to impose any requirement on a contractor or  subcon-
tractor except with respect to a state contract.
  (a)  Contracting  agencies  shall administer the rules and regulations
promulgated by the director in a good faith effort to meet  the  maximum
feasible  portion of the agency's goals adopted pursuant to this article
and the regulations of the director. Such rules and  regulations:  shall
require  a  contractor  to  submit  a  utilization  plan [after bids are
opened] AT THE TIME BIDS ARE SUBMITTED, when  bids  are  required[,  but
prior  to  the award of a state contract]; shall require the contracting
agency to review the utilization plan submitted by the contractor and to
post the utilization plan and any waivers of compliance issued  pursuant
to  subdivision  six  of  this section on the website of the contracting
agency within a reasonable period of time as established by  the  direc-
tor;  shall  require  the contracting agency to notify the contractor in
writing within a period of time specified by  the  director  as  to  any
deficiencies  contained  in  the  contractor's  utilization  plan; shall

S. 3570                             5

require remedy thereof within a period of time specified by  the  direc-
tor; shall require the contractor to submit [periodic] QUARTERLY compli-
ance  reports relating to the operation and implementation of any utili-
zation  plan;  shall  not  allow any automatic waivers but shall allow a
contractor to apply for a partial or total waiver of  the  minority  and
women-owned  business  enterprise participation requirements pursuant to
subdivisions six and seven of this section; shall allow a contractor  to
file a complaint with the director pursuant to subdivision eight of this
section in the event a contracting agency has failed or refused to issue
a  waiver  of  the  minority and women-owned business enterprise partic-
ipation requirements or has denied such request for a waiver; and  shall
allow  a contracting agency to file a complaint with the director pursu-
ant to subdivision nine of this section in the  event  a  contractor  is
failing  or has failed to comply with the minority and women-owned busi-
ness enterprise  participation  requirements  set  forth  in  the  state
contract where no waiver has been granted.
  S  5. Subdivisions 1 and 3 of section 315 of the executive law, subdi-
vision 1 as added by chapter 261 of the laws of 1988 and  subdivision  3
as amended by chapter 175 of the laws of 2010, are amended and three new
subdivisions 2-a, 3-a and 8 are added to read as follows:
  1.  Each  contracting agency shall be responsible for monitoring state
contracts under its jurisdiction, and recommending matters to the office
respecting non-compliance with the provisions of this  article  so  that
the  office  [may]  SHALL take such action as [is appropriate] STATED IN
SUBDIVISION THREE OF SECTION THREE HUNDRED SIXTEEN OF THIS ARTICLE. EACH
CONTRACTING AGENCY SHALL HAVE THE RIGHT TO RECOMMEND THAT  THE  DIRECTOR
IMPOSE  A  SANCTION,  PENALTY,  OR  FINE FOR THREE OR MORE VIOLATIONS OF
SUBDIVISION ONE OF SECTION THREE HUNDRED SIXTEEN  OF  THIS  ARTICLE,  to
insure  compliance  with  the  provisions of this article, the rules and
regulations  of  the  director  issued  hereunder  and  the  contractual
provisions  required  pursuant to this article. All contracting agencies
shall comply with the rules  and  regulations  of  the  office  and  are
directed  to cooperate with the office and to furnish to the office such
information and assistance as may be required in the performance of  its
functions under this article.
  2-A.  EACH CONTRACTING AGENCY WHEN NOTIFYING A CONTRACTOR OF A WINNING
BID  AWARD SHALL ALSO NOTIFY ANY MINORITY OR WOMEN-OWNED BUSINESS ENTER-
PRISES AFFILIATED WITH SUCH CONTRACTOR, PER THE  CONTRACTOR'S  SUBMITTED
UTILIZATION PLAN, OF SUCH CONTRACTOR'S RECEIPT OF THE WINNING BID AWARD.
  3.  (A)  Each  contracting  agency shall report to THE COMMISSIONER OF
ECONOMIC DEVELOPMENT, THE  COMMISSIONER  OF  GENERAL  SERVICES  AND  the
director  with respect to activities undertaken to promote employment of
minority group members and women and promote and increase  participation
by  certified  businesses  with  respect  to state contracts and subcon-
tracts. Such reports shall be  submitted  [periodically,  but  not  less
frequently  than  annually,  as required by the director,] QUARTERLY and
shall include such information as  is  necessary  for  the  director  to
determine  whether  the  contracting agency and contractor have complied
with the purposes of this article, including,  without  limitation,  THE
NUMBER  OF  STATE CONTRACTS AWARDED TO CERTIFIED MINORITY OR WOMEN-OWNED
BUSINESS ENTERPRISES; THE MAXIMUM DOLLAR AMOUNT  OBLIGATED  PURSUANT  TO
ALL  THOSE  CONTRACTS,  AND  THE TOTAL EXPENDITURES MADE PURSUANT TO ALL
SUCH CONTRACTS; THE NUMBER OF STATE CONTRACTS AWARDED  WHICH  INCLUDE  A
UTILIZATION  PLAN  FOR  BUSINESS  PARTICIPATION BY CERTIFIED MINORITY OR
WOMEN-OWNED BUSINESS ENTERPRISES, THE MAXIMUM AMOUNT OBLIGATED  PURSUANT
TO THOSE CONTRACTS, AND THE TOTAL EXPENDITURES MADE PURSUANT TO ALL SUCH

S. 3570                             6

CONTRACTS;  a summary of all waivers of the requirements of subdivisions
six and seven of section three hundred thirteen of this article  allowed
by  the  contracting  agency  during  the  period covered by the report,
including  a  description  of the basis of the waiver request [and], the
rationale for granting any such waiver AND THE MAXIMUM AMOUNT  OBLIGATED
PURSUANT TO THOSE CONTRACTS; THE NUMBER OF STATE CONTRACTS AWARDED WHICH
REQUIRED  GOALS  FOR EMPLOYMENT OF MINORITY GROUP MEMBERS AND WOMEN; AND
THE NUMBER OF STATE CONTRACTS AWARDED FOR WHICH  WAIVERS  OF  EMPLOYMENT
GOALS  REQUIRED  BY  THE CONTRACTS HAVE BEEN GRANTED.  Each agency shall
also include in such annual report whether or not it has  been  required
to prepare a remedial plan, and, if so, the plan and the extent to which
the agency has complied with each element of the plan.
  (B)  IN ADDITION, EACH CONTRACTING AGENCY SHALL BE RESPONSIBLE FOR THE
COST OF AN  INDEPENDENT  AUDIT  RESULTING  FROM  THE  AGENCY'S  REPEATED
VIOLATIONS OF THIS SECTION.
  3-A.  WITHIN  THIRTY  DAYS  AFTER  COMPLETION, A COPY OF THE QUARTERLY
MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISE REPORT SHALL BE TRANSMITTED
TO THE COMMISSIONER OF ECONOMIC DEVELOPMENT, THE COMMISSIONER OF GENERAL
SERVICES, AND THE DIRECTOR. A CONTRACTING AGENCY, WHICH HAS NOT LET MORE
THAN TWO MILLION DOLLARS IN SERVICE AND/OR CONSTRUCTION CONTRACTS WITHIN
THE APPLICABLE PERIOD MAY APPLY TO THE COMMISSIONER OF ECONOMIC DEVELOP-
MENT, AND THE DIRECTOR FOR A WAIVER OF THE REQUIRED ANNUAL  REPORT.  THE
WAIVER  APPLICATION  SHALL  BE  MADE ON SUCH FORM AS THE COMMISSIONER OF
ECONOMIC DEVELOPMENT AND THE DIRECTOR MAY PRESCRIBE.
  8. IF A  CONTRACTING  AGENCY  SHALL  FAIL  TO  FILE  OR  SUBSTANTIALLY
COMPLETE,  AS DETERMINED BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT AND
THE DIRECTOR, THE REPORT REQUIRED BY THIS SECTION,  THE  DIRECTOR  SHALL
PROVIDE  NOTICE  TO  THE  CONTRACTING AGENCY. THE NOTICE SHALL STATE THE
FOLLOWING:
  (A) THAT THE FAILURE TO FILE A REPORT AS REQUIRED IS  A  VIOLATION  OF
THIS  SECTION,  OR  IN THE CASE OF AN INSUFFICIENT REPORT, THE MANNER IN
WHICH THE REPORT SUBMITTED IS DEFICIENT;
  (B) THAT THE CONTRACTING AGENCY HAS THIRTY DAYS TO  COMPLY  WITH  THIS
SECTION  OR  PROVIDE AN ADEQUATE WRITTEN EXPLANATION TO THE COMMISSIONER
OF ECONOMIC DEVELOPMENT AND THE COMMISSIONER OF GENERAL SERVICES AND THE
DIRECTOR OF THE  CONTRACTING  AGENCY'S  REASONS  FOR  THE  INABILITY  TO
COMPLY; AND
  (C)  THAT THE CONTRACTING AGENCY'S CONTINUED FAILURE TO PROVIDE EITHER
THE REQUIRED REPORT OR AN ADEQUATE EXPLANATION WILL RESULT IN  AN  INDE-
PENDENT  AUDIT  OF  THE  CONTRACTING  AGENCY, THE COST OF WHICH SHALL BE
BORNE BY THE CONTRACTING AGENCY.
  S 6. Section 316 of the executive law, as amended by  chapter  175  of
the laws of 2010, is amended to read as follows:
  S  316.  [Enforcement]  VIOLATIONS AND ENFORCEMENT.   1. IT SHALL BE A
VIOLATION FOR ANY PERSON OR ENTITY TO:
  A. INTENTIONALLY USE OR ACQUIRE AN MWBE NAME THROUGH DECEIT  OR  OTHER
DISHONEST MEANS IN ORDER TO NEGOTIATE A LOWER BID FROM A NON-MWBE.
  B.  SUBMIT  TO  THE  DEPARTMENT  OF ECONOMIC DEVELOPMENT, DOCUMENTS OR
OTHER MATERIAL AS EVIDENCE OF A GOOD FAITH EFFORT  TO  COMPLY  WITH  THE
PROVISIONS  OF  THIS  ARTICLE  WITHOUT, IN FACT, HAVING ENTERED INTO ANY
CONTRACT, AGREEMENT, SUBCONTRACT, OR SUB-AGREEMENT WITH AN MWBE FOR  THE
USE  OR  PURCHASE OF SUCH BUSINESS ENTERPRISE'S GOODS OR SERVICES IN THE
PERFORMANCE OF THE AWARDED STATE CONTRACT.
  C. FAIL TO PROVIDE  AN  MWBE  WITH  SUFFICIENT  INFORMATION  OR  OTHER
REQUIRED  SUPPORTING  DOCUMENTATION  IN  ORDER FOR THE MWBE TO PREPARE A
PROPER BID.

S. 3570                             7

  2. Upon receipt by the director of a complaint by a contracting agency
that a contractor has violated the provisions of a state contract  which
have been included to comply with the provisions of this article or of a
contractor that a contracting agency has violated such provisions or has
failed  or  refused  to  issue  a  waiver where one has been applied for
pursuant to subdivision six of section three hundred  thirteen  of  this
article  or  has  denied such application, the director shall attempt to
resolve the matter giving rise to such complaint. If efforts to  resolve
such  matter  to  the  satisfaction of all parties are unsuccessful, the
director shall refer the matter, within thirty days of  the  receipt  of
the  complaint,  to  the division's hearing officers. Upon conclusion of
the administrative hearing, the hearing  officer  shall  submit  to  the
director  his  or  her  decision  regarding the alleged violation of the
contract and recommendations  regarding  the  imposition  of  sanctions,
fines  or  penalties.  The  director,  within ten days of receipt of the
decision, shall file a determination of such matter and  shall  cause  a
copy  of  such  determination  along  with  a copy of this article to be
served upon the contractor by personal  service  or  by  certified  mail
return  receipt  requested. The decision of the hearing officer shall be
final and may only be vacated or modified as provided in article  seven-
ty-eight  of  the  civil practice law and rules upon an application made
within the time provided by  such  article.  The  determination  of  the
director as to the imposition of any fines, sanctions or penalties shall
be  reviewable  pursuant  to article seventy-eight of the civil practice
law and rules. The penalties imposed for any violation which is premised
upon  either  a  fraudulent  or  intentional  misrepresentation  by  the
contractor  or the contractor's willful and intentional disregard of the
minority and  women-owned  participation  requirement  included  in  the
contract may include a determination that the contractor shall be ineli-
gible  to  submit a bid to any contracting agency or be awarded any such
contract for a period not to exceed one year following the final  deter-
mination;  provided  however, if a contractor has previously been deter-
mined to be ineligible to submit a bid pursuant  to  this  section,  the
penalties imposed for any subsequent violation, if such violation occurs
within  five  years  of the first violation, may include a determination
that the contractor shall be ineligible to submit a bid to any contract-
ing agency or be awarded any such contract for a period  not  to  exceed
five  years  following the final determination. The division of minority
and women's business development shall maintain a  website  listing  all
contractors that have been deemed ineligible to submit a bid pursuant to
this  section  and the date after which each contractor shall once again
become eligible to submit bids.
  3.  THE DIRECTOR SHALL IMPOSE A SANCTION,  PENALTY,  OR  FINE  ON  ANY
INDIVIDUAL  OR  ENTITY THAT HAS THREE OR MORE VIOLATIONS OF THIS ARTICLE
WITHIN FIVE YEARS. SUCH FINE SHALL BE PAID BY SUCH INDIVIDUAL OR ENTITY.
SUCH FINE SHALL BE REMITTED AND DEPOSITED INTO A FUND, TO BE MANAGED  BY
THE  COMMISSIONER  OF ECONOMIC DEVELOPMENT.  SUCH FUNDS SHALL BE USED TO
SUBSIDIZE THE FACILITATION OF THE  PROVISIONS  OF  THIS  ARTICLE.  OTHER
SANCTIONS SHALL INCLUDE BARRING SUCH ENTITY OR INDIVIDUAL FROM CONTRACT-
ING WITH SUCH AGENCY FOR A PERIOD NOT TO EXCEED FIVE YEARS.
  S  7.  Subdivision 1 of section 137 of the state finance law, as sepa-
rately amended by section 17 of part MM of chapter 57 and chapter 619 of
the laws of 2008, is amended to read as follows:
  1. In addition to other bond or bonds, if any, required by law for the
completion of a work specified in a contract for the  prosecution  of  a
public  improvement for the state of New York a municipal corporation, a

S. 3570                             8

public benefit corporation or a commission appointed pursuant to law, or
in the absence of any such requirement, the comptroller may or the other
appropriate official, respectively, shall nevertheless require prior  to
the  approval of any such contract a bond guaranteeing prompt payment of
moneys due to all persons furnishing labor or materials to the  contrac-
tor or any subcontractors in the prosecution of the work provided for in
such  contract. Whenever a municipal corporation issues a permit subject
to compliance with section two hundred twenty of  the  labor  law,  such
permittee  or  its contractor or subcontractors furnishing workers shall
post a payment bond subject to this section. Provided, however, that all
performance bonds and payment bonds may, at the discretion of  the  head
of the state agency, public benefit corporation or commission, or his or
her  designee,  be dispensed with for the completion of a work specified
in a contract for the prosecution of a public improvement for the  state
of  New  York for which bids are solicited where the aggregate amount of
the contract is under one hundred thousand dollars and provided further,
that in a case where  the  contract  is  not  subject  to  the  multiple
contract  award  requirements of section one hundred thirty-five of this
article, such requirements may be dispensed with where the head  of  the
state agency, public benefit corporation or commission finds it to be in
the  public  interest  and  where  the  aggregate amount of the contract
awarded or to be awarded is less than two hundred thousand dollars. IN A
CASE WHERE A CONTRACT IS AWARDED TO A SMALL BUSINESS  CONCERN  OR  TO  A
MINORITY  OR  WOMEN-OWNED  BUSINESS  CONCERN,  ALL PERFORMANCE BONDS AND
PAYMENT BONDS MAY BE DISPENSED WITH WHEN THE  AGGREGATE  AMOUNT  OF  THE
CONTRACT IS UNDER FIVE HUNDRED THOUSAND DOLLARS. ADVERTISEMENTS FOR BIDS
SHALL  PROVIDE  INFORMATION  AS TO THE REQUIREMENTS FOR, OR DISPENSATION
OF, PERFORMANCE AND PAYMENT BONDS. Provided  further,  that  in  a  case
where a performance or payment bond is dispensed with, twenty per centum
may  be retained from each progress payment or estimate until the entire
contract work has been completed and accepted, at which time the head of
the state agency, public benefit corporation or commission shall,  pend-
ing  the  payment  of the final estimate, pay not to exceed seventy-five
per centum of the amount of the retained percentage.
  S 8. Subdivision 4 of section 139-f  of  the  state  finance  law,  as
amended  by  chapter  83  of  the  laws  of  1995, is amended to read as
follows:
  4. Notwithstanding any other provision of this section or  other  law,
requirements  for the furnishing of a performance bond or a payment bond
may be dispensed with at the discretion of the head of the state  agency
or  corporation,  or  his  or  her designee, where the public owner is a
state agency or corporation  described  in  subdivision  one-a  of  this
section  and  the  aggregate  amount  of  the  contract awarded or to be
awarded is under fifty  thousand  dollars  and,  in  a  case  where  the
contract  is  not subject to the multiple contract award requirements of
section one hundred thirty-five of this article, such  requirements  may
be  dispensed  with  where  the  head of the state agency or corporation
finds it to be in the public interest and where the aggregate amount  of
the  contract  awarded  or  to  be awarded is under two hundred thousand
dollars. IN A CASE WHERE A CONTRACT  IS  AWARDED  TO  A  SMALL  BUSINESS
CONCERN  OR  TO A MINORITY OR WOMEN-OWNED BUSINESS CONCERN, ALL PERFORM-
ANCE BONDS AND PAYMENT BONDS MAY BE DISPENSED WITH  WHEN  THE  AGGREGATE
AMOUNT  OF  THE  CONTRACT IS UNDER FIVE HUNDRED THOUSAND DOLLARS. ADVER-
TISEMENTS FOR PROPOSALS SHALL PROVIDE INFORMATION AS TO THE REQUIREMENTS
FOR,  OR  DISPENSATION  OF,  PERFORMANCE  AND  PAYMENT  BONDS.  Provided
further, that in a case where a performance or payment bond is dispensed

S. 3570                             9

with,  twenty  per  centum may be retained from each progress payment or
estimate until the entire contract work has been completed and accepted,
at which time the head of the state agency or corporation shall, pending
the  payment  of  the final estimate, pay not to exceed seventy-five per
centum of the amount of the retained percentage.
  S 9. The opening paragraph of section 139-g of the state finance  law,
as  amended  by  chapter  636 of the laws of 2003, is amended to read as
follows:
  In every state agency, department and authority  which  has  let  more
than two million dollars in service and construction contracts AND STATE
ASSISTED PROJECT CONTRACTS in the prior fiscal year, the chief executive
officer  of  that agency, department or authority shall, with respect to
those contracts AND STATE ASSISTED PROJECT CONTRACTS let by his  OR  HER
agency, department or authority:
  S 10. The opening paragraph of subdivision (b) of section 139-g of the
state  finance  law,  as  amended by chapter 636 of the laws of 2003, is
amended to read as follows:
  identify all small-business and  certified  women  and  minority-owned
business  concerns which, in the judgment of the chief executive officer
of that agency, department or authority, can bid on those contracts  AND
STATE  ASSISTED  PROJECT CONTRACTS which are usually and customarily let
by that agency, department or authority,  OR  IN  WHICH  THAT  AUTHORITY
PROVIDES  A  GRANT  OR  LOAN  OR TAX EXEMPT FINANCING, with a reasonable
expectation of success. Such chief executive officers  shall  carry  out
the provisions of this subdivision:
  S  11.   Section 139-g of the state finance law is amended by adding a
new subdivision (e) to read as follows:
  (E) FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING WORDS  SHALL  HAVE
THE FOLLOWING MEANINGS:
  (I) "STATE ASSISTED PROJECT CONTRACT" SHALL MEAN ANY WRITTEN AGREEMENT
ARISING  OUT  OF  A  STATE  ASSISTED  HOUSING  PROJECT OR STATE ASSISTED
ECONOMIC DEVELOPMENT PROJECT OR STATE ASSISTED HIGHER EDUCATION  PROJECT
OR  STATE  ASSISTED  HOSPITAL OR HEALTH CARE FACILITY PROJECT, FOR WHICH
THE TOTAL PROJECT COST EXCEEDS TWO MILLION DOLLARS  AND  FOR  WHICH  THE
PROJECT  OWNER IS COMMITTED TO SPEND OR DOES EXPEND FUNDS FOR THE ACQUI-
SITION, CONSTRUCTION, DEMOLITION, REPLACEMENT, MAJOR  REPAIR,  OR  RENO-
VATION OF REAL PROPERTY AND IMPROVEMENTS THEREON FOR SUCH PROJECT.
  (II)  "STATE ASSISTED HOUSING PROJECT" SHALL MEAN THOSE PROJECTS WHICH
RECEIVE FROM THE  NEW  YORK  STATE  HOUSING  FINANCE  AGENCY  TAX-EXEMPT
FINANCING FOR ALL OR PART OF THE TOTAL PROJECT COST.
  (III)  "STATE  ASSISTED ECONOMIC DEVELOPMENT PROJECT" SHALL MEAN THOSE
PROJECTS WHICH RECEIVE FROM THE NEW YORK FOUNDATION OF SCIENCE TECHNOLO-
GY AND INNOVATION, OR THE URBAN DEVELOPMENT CORPORATION AND ITS  SUBSID-
IARIES  A  GRANT  OR LOAN OR TAX-EXEMPT FINANCING FOR ALL OR PART OF THE
TOTAL PROJECT COST.
  (IV) "STATE  ASSISTED  HIGHER  EDUCATION  PROJECT"  SHALL  MEAN  THOSE
PROJECTS  WHICH RECEIVE FROM THE DORMITORY AUTHORITY OF THE STATE OF NEW
YORK A GRANT OR LOAN OR TAX-EXEMPT FINANCING FOR  ALL  OR  PART  OF  THE
TOTAL PROJECT COST.
  (V)  "STATE  ASSISTED  HOSPITAL OR HEALTH CARE FACILITY PROJECT" SHALL
MEAN THOSE PROJECTS WHICH RECEIVE FROM THE DORMITORY  AUTHORITY  OF  THE
STATE  OF  NEW  YORK  A GRANT OR LOAN OR TAX-EXEMPT FINANCING FOR ALL OR
PART OF THE TOTAL PROJECT COST.
  S 12. This act shall take effect immediately,  provided  however,  the
amendments  to  article  15-A  of the executive law made by sections one

S. 3570                            10

through six of this act shall not affect the expiration of such  article
and shall expire therewith.

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