S T A T E O F N E W Y O R K
________________________________________________________________________
S. 6888--B A. 9976--B
S E N A T E - A S S E M B L Y
February 22, 2010
___________
IN SENATE -- Introduced by Sens. HASSELL-THOMPSON, PARKER, ADAMS, ADDAB-
BO, DILAN, DUANE, ESPADA, HUNTLEY, KRUEGER, KRUGER, MONTGOMERY, OPPEN-
HEIMER, PERALTA, PERKINS, SAMPSON, SCHNEIDERMAN, SMITH, SQUADRON,
STACHOWSKI, STEWART-COUSINS, THOMPSON, VALESKY -- read twice and
ordered printed, and when printed to be committed to the Committee on
Civil Service and Pensions -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee --
reported favorably from said committee and committed to the Committee
on Finance -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
IN ASSEMBLY -- Introduced by M. of A. PEOPLES-STOKES, AUBRY, BENJAMIN,
BING, CASTRO, GIBSON, JACOBS, JAFFEE, JOHN, ROSENTHAL, SKARTADOS,
ROBINSON, BRODSKY, JEFFRIES, TOWNS, SCHROEDER, MILLMAN, BARRON, PERRY,
WRIGHT, ESPAILLAT, N. RIVERA, TITUS, SCARBOROUGH, HOOPER, BOYLAND --
Multi-Sponsored by -- M. of A. COOK, CRESPO, DelMONTE, DenDEKKER,
DESTITO, DINOWITZ, FARRELL, GLICK, GOTTFRIED, HEASTIE, HYER-SPENCER,
KOON, MAYERSOHN, MENG, P. RIVERA, SCHIMEL -- read once and referred to
the Committee on Governmental Employees -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- again reported from said committee with amendments, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the retirement and social security law, the education
law, the workers' compensation law and the state finance law, in
relation to a strategy to increase participation by emerging invest-
ment managers and other minority and women-owned business enterprises
involved in providing asset management services, financial services or
other professional services
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Short title. This act shall be known and may be cited as
the "New York state MWBE asset management and financial institution
strategy".
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15736-05-0
S. 6888--B 2 A. 9976--B
S 2. Legislative findings. The legislature hereby finds and declares
that:
1. The New York state MWBE asset management and financial institution
strategy is hereby adopted to codify and replicate across certain New
York state controlled entities best practices with respect to the inclu-
sion of minority and women-owned business enterprises that are asset
managers, investment banks, and financial and professional service firms
in the opportunity to provide services to such New York state controlled
entities, including, without limitation, the New York state common
retirement fund, New York state teachers' retirement system, the New
York insurance fund, the New York state deferred compensation plans and
New York state public authorities and agencies. Certain New York state
controlled entities such as the common retirement fund, the New York
state teachers' retirement system and the New York state insurance fund,
have recently adopted emerging manager programs to increase opportu-
nities for firms that include small, disadvantaged or minority and
women-owned business enterprises. These programs and similar programs
in other states have shown that there is a growing pool of minority and
women-owned asset managers, investment banks and financial and profes-
sional services firms that are qualified to provide investment manage-
ment, investment banking, underwriting and other financial and profes-
sional services to New York state controlled entities. The intent of
this legislation is to institutionalize access to opportunities for MWBE
firms in New York state across New York state controlled entities that
use such services, to create reasonable goals for conducting business
with such firms, and to facilitate transparency by creating a regime of
public reporting about use of such firms for such services. Nothing in
this legislation should be deemed to preempt or affect in any way exist-
ing laws regarding legal investments by New York state entities covered
hereunder, to conflict with the fiduciary obligations of the trustees,
plan sponsors, fiduciaries, board members or executive officers of any
of such controlled entities, as applicable, to create quotas or other
unlawful preferences, or to diminish the ability of any entity covered
by this legislation to make decisions consistent with best practices for
procuring the services covered hereby.
2. In 2006, the New York state department of economic development or
"NYSDEC" commissioned a study to assist the state in evaluating whether
the state's minority and women-owned business enterprise or "MWBE"
initiatives were still necessary to remedy discrimination in state
contracting programs. On May 5, 2010, the study was presented to NYSDEC,
members of the legislature and other stakeholders. The study's findings
indicated that (a) there is both statistical and anecdotal evidence of
business discrimination against MWBEs in the private sector of the New
York state market area, (b) there is evidence of discrimination against
MWBEs in the New York state market area in the small business credit
market, (c) MWBEs in the state's market area report suffering business
related discrimination in large numbers and with statistically signif-
icant greater frequency than non-MWBEs, and (d) in general, minorities
and women reported that race- and gender-conscious contracting programs
are needed to ensure full and fair access to government contracts
because being certified created opportunities that otherwise would not
have presented themselves.
3. As a result of such findings, the governor and the state legisla-
ture are considering amendments to article 15-A of the executive law and
certain provisions of the public authorities law of the state that cover
MWBE procurement programs, to improve outreach to MWBEs by state agen-
S. 6888--B 3 A. 9976--B
cies and state authorities, to increase transparency and public report-
ing on direct and indirect expenditures with MWBEs, to generally elimi-
nate artificial barriers to entry for MWBE firms and to strengthen the
efficacy of the state's MWBE programs.
4. On December 11, 2009, the public authorities reform bill was passed
by the New York state legislature and signed into law by the governor,
which among other things, expanded the contracting areas covered under
article 15-A of the executive law to include financial and professional
services, which previously had been specifically excluded from such
article. The present legislation is a further effort to broaden the
coverage of New York state's MWBE programs.
5. While most state agencies and authorities are covered by article
15-A of the executive law, other important state entities such as its
pension plans and insurance fund are not statutorily required to main-
tain MWBE programs relevant to their primary activities. The New York
state common retirement fund, the New York state teachers' retirement
system and the New York state insurance fund have each voluntarily
adopted separate programs for making investments with firms that include
minority and women-owned business enterprises engaged in asset manage-
ment. The legislature finds such efforts to be important and consistent
with its objectives. The legislature deems it necessary to take a step
further by codifying certain practices by such New York controlled enti-
ties covered by this act. The legislature deems this legislation to be
necessary to facilitate institutional change in ensuring inclusion of
MWBE firms by New York state controlled entities that procure asset
management, investment banking and other financial and professional
services.
6. Many studies have shown that, as it relates to asset management,
diversification of asset management contracts through hiring smaller
asset managers, including managers that are minority and women-owned
business enterprises, creates greater investment portfolio diversity and
improves investment returns. Increasingly, legislators in other juris-
dictions such as Illinois and Maryland and public pension plan fiduciar-
ies in states such as California, Connecticut, Illinois, New York and
Texas among others have adopted strategies to increase the diversifica-
tion of their financial service providers, including by designing emerg-
ing manager programs to identify underrepresented, qualified asset
managers, broker-dealers and investment banks and to set reasonable
goals to increase business activity with such firms. On the federal
level, the House of Representatives recently passed a resolution on the
topic, the "financial services diversity initiative." H.R. 110-278 (July
30, 2007), which among other things "encourages financial institutions
and public and private pension funds to seek qualified women- and minor-
ity-owned firms as asset managers, underwriters, and other business
relationships and to appoint more women and minorities as board
members."
7. The state of New York has historically held a competitive advantage
as the center of the worldwide financial services industry. New York
state financial service firms have been key providers of employment
opportunities for New York residents and critical generators of tax
revenue both for New York state and its local governments. As an econom-
ic development matter, fostering a strong financial services industry
that includes meaningful participation by MWBE firms is an important
objective. In addition, the legislature anticipates that increasing
state contracting opportunities and increasing capital access to under-
served regions and to underserved groups such as minority and women-
S. 6888--B 4 A. 9976--B
owned business enterprises, will increase employment opportunities for
New York state residents.
8. Through the present legislation, New York state shall establish
goals that encourage New York state controlled entities to identify and
utilize minority and women-owned business enterprises that are financial
services or professional service firms. Through this legislation, the
legislature intends to eliminate artificial barriers to opportunity
facing such MWBE firms, optimize competition for financial and profes-
sional services, diversify investments among a larger pool of asset
managers and other financial services firms and to support job creation
and economic development.
S 3. Section 176 of the retirement and social security law is amended
by adding four new subdivisions 4, 5, 6 and 7 to read as follows:
4. THE TERM "MWBE ASSET MANAGER" SHALL MEAN AN ASSET MANAGER IN ANY OF
THE FOLLOWING ASSET CLASSES: PUBLIC EQUITY OR FIXED INCOME SECURITIES,
HEDGE FUNDS, FUND OF HEDGE FUNDS, PRIVATE EQUITY (INCLUDING VENTURE
CAPITAL), FUND OF PRIVATE EQUITY FUNDS, REAL ESTATE INVESTMENT FUNDS, OR
FUND OF REAL ESTATE FUNDS THAT IS: (A) A MWBE WITH A SIGNIFICANT PRES-
ENCE OR SIGNIFICANT INVESTMENTS IN NEW YORK STATE, AND (B) A REGISTERED
INVESTMENT ADVISOR OR EXEMPT FROM SUCH REGISTRATION.
5. THE TERM "MINORITY GROUP MEMBER" SHALL MEAN A UNITED STATES CITIZEN
OR PERMANENT RESIDENT ALIEN WHO IS AND CAN DEMONSTRATE MEMBERSHIP IN ONE
OF THE FOLLOWING GROUPS:
(A) BLACK PERSONS HAVING ORIGINS IN ANY OF THE BLACK AFRICAN RACIAL
GROUPS;
(B) HISPANIC PERSONS OF MEXICAN, PUERTO RICAN, DOMINICAN, CUBAN,
CENTRAL OR SOUTH AMERICAN OF EITHER INDIAN OR HISPANIC ORIGIN, REGARD-
LESS OF RACE;
(C) NATIVE AMERICAN OR ALASKAN NATIVE PERSONS HAVING ORIGINS IN ANY OF
THE ORIGINAL PEOPLES OF NORTH AMERICA; OR
(D) ASIAN AND PACIFIC ISLANDER PERSONS HAVING ORIGINS IN ANY OF THE
FAR EAST COUNTRIES, SOUTHEAST ASIA, THE INDIAN SUBCONTINENT OR THE
PACIFIC ISLANDS.
6. THE TERM "MWBE" MEANS A BUSINESS ENTERPRISE, INCLUDING WITHOUT
LIMITATION, A SOLE PROPRIETORSHIP, PARTNERSHIP, LIMITED PARTNERSHIP,
LIMITED LIABILITY PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION OR
OTHER SIMILAR ENTITY WHETHER DOMESTIC OR FOREIGN, THAT IS A
"MINORITY-OWNED BUSINESS ENTERPRISE":
(A) (I) AT LEAST FIFTY-ONE PERCENT OF WHICH IS OWNED BY ONE OR MORE
MINORITY GROUP MEMBERS, OR A "WOMEN-OWNED BUSINESS ENTERPRISE" THAT IS
AT LEAST FIFTY-ONE PERCENT OWNED BY ONE OR MORE WOMEN, IN EACH CASE, WHO
HAVE SIGNIFICANT EXPERIENCE IN ASSET MANAGEMENT, BROKERAGE, OTHER FINAN-
CIAL SERVICES OR RELATED PROFESSIONAL SERVICES SUCH AS ACCOUNTING, VALU-
ATION OR LEGAL SERVICES; OR
(II) AT LEAST THIRTY PERCENT OF WHICH IS OWNED BY ONE OR MORE MINORITY
GROUP MEMBERS, OR ONE OR MORE WOMEN, AS APPLICABLE, IN EACH CASE, WHO
HAVE SIGNIFICANT EXPERIENCE IN ASSET MANAGEMENT, BROKERAGE, OTHER FINAN-
CIAL SERVICES OR RELATED PROFESSIONAL SERVICES SUCH AS ACCOUNTING, VALU-
ATION OR LEGAL SERVICES. WITH RESPECT TO A BUSINESS ENTERPRISE AT LEAST
THIRTY PERCENT OWNED BY ONE OR MORE MINORITY GROUP MEMBERS, OR ONE OR
MORE WOMEN, IMMEDIATELY PRIOR TO HAVING AT LEAST THIRTY PERCENT OF SUCH
OWNERSHIP, SUCH BUSINESS ENTERPRISE MUST HAVE BEEN CERTIFIED BY THE
DEPARTMENT OF ECONOMIC DEVELOPMENT'S DIVISION OF WOMEN AND
MINORITY-OWNED BUSINESS DEVELOPMENT AS A MINORITY OR WOMEN-OWNED BUSI-
NESS ENTERPRISE, AS APPLICABLE, THAT WAS AT LEAST FIFTY-ONE PERCENT
OWNED BY ONE OR MORE MINORITY GROUP MEMBERS, OR ONE OR MORE WOMEN;
S. 6888--B 5 A. 9976--B
(B) AN ENTERPRISE IN WHICH SUCH MINORITY OWNERSHIP OR OWNERSHIP BY
WOMEN, AS APPLICABLE, IS REAL, SUBSTANTIAL AND CONTINUING;
(C) AN ENTERPRISE IN WHICH SUCH MINORITY OWNERSHIP OR WOMEN OWNERSHIP,
AS APPLICABLE, HAS AND EXERCISES THE AUTHORITY TO CONTROL INDEPENDENTLY
THE DAY-TO-DAY BUSINESS DECISIONS OF THE ENTERPRISE;
(D) AN ENTERPRISE AUTHORIZED TO DO BUSINESS IN THIS STATE AND INDE-
PENDENTLY OWNED AND OPERATED; AND
(E) AN ENTERPRISE CERTIFIED BY THE DEPARTMENT OF ECONOMIC DEVELOP-
MENT'S DIVISION OF WOMEN AND MINORITY-OWNED BUSINESS DEVELOPMENT AS A
"FINANCIAL/PROFESSIONAL MWBE". THE DIRECTOR OF THE DIVISION OF WOMEN AND
MINORITY-OWNED BUSINESS DEVELOPMENT SHALL WORK WITH THE NEW YORK STATE
COMPTROLLER TO DEVELOP RULES AND REGULATIONS FOR SUCH CERTIFICATION.
7. THE TERM "MWBE FINANCIAL INSTITUTION" SHALL MEAN (A) AS IT RELATES
TO BROKERAGE SERVICES, A REGISTERED BROKER DEALER THAT IS A MWBE; AND
(B) AS IT RELATES TO ANY OTHER FINANCIAL SERVICES, A MWBE THAT PROVIDES
BANKING, FINANCIAL ADVISORY, INSURANCE, FINANCIAL RESEARCH, VALUATION OR
OTHER FINANCIAL SERVICES.
S 5. The retirement and social security law is amended by adding a new
section 423-c to read as follows:
S 423-C. MWBE ASSET MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY. 1.
WITHIN THE DISCRETION OF THE STATE COMPTROLLER AND IN ACCORDANCE WITH
AND SUBJECT TO HIS OR HER FIDUCIARY DUTIES AND OBLIGATIONS AS TRUSTEE OF
THE COMMON RETIREMENT FUND AND TO THE MEMBERS, RETIREES AND BENEFICI-
ARIES OF SUCH FUND AND SUCH OTHER INVESTMENT LIMITATIONS AS MAY BE
PRESCRIBED BY THIS CHAPTER, THE COMPTROLLER SHALL ESTABLISH A MWBE ASSET
MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY, WHICH SHALL INCLUDE, BUT
SHALL NOT BE LIMITED TO, THE FOLLOWING GOALS:
(A) INVESTING NOT LESS THAN FIFTEEN PERCENT OF EXTERNALLY MANAGED
ASSETS OF THE COMMON RETIREMENT FUND WITH MWBE ASSET MANAGERS TO THE
GREATEST EXTENT FEASIBLE PROVIDED SUCH INVESTMENTS FULFILL THE FIDUCIARY
DUTIES AND OBLIGATIONS OF THE STATE COMPTROLLER AS TRUSTEE OF THE COMMON
RETIREMENT FUND AND TO THE MEMBERS, RETIREES AND BENEFICIARIES OF SUCH
FUND;
(B) SUBJECT TO BEST EXECUTION, (I) CONDUCTING TRADES OF PUBLIC EQUITY
SECURITIES PRODUCING NOT LESS THAN THIRTY-FIVE PERCENT OF COMMISSIONS IN
EACH FISCAL YEAR TO MWBE FINANCIAL INSTITUTIONS AND (II) CONDUCTING NOT
LESS THAN TWENTY-FIVE PERCENT OF THE COMMON RETIREMENT FUND'S VOLUME OF
FIXED INCOME SECURITIES TRADING IN EACH FISCAL YEAR THROUGH MWBE FINAN-
CIAL INSTITUTIONS TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH TRANS-
ACTIONS FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE STATE COMP-
TROLLER AS TRUSTEE OF THE COMMON RETIREMENT FUND AND TO THE MEMBERS,
RETIREES AND BENEFICIARIES OF SUCH FUND;
(C) ALLOCATING INVESTMENTS OF ASSETS OF THE COMMON RETIREMENT FUND
EITHER THROUGH DIRECT INVESTMENTS OR INDIRECTLY IN EQUITY AND DEBT SECU-
RITIES OF MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES CERTIFIED BY THE
DIVISION OF MINORITY AND WOMEN'S BUSINESS DEVELOPMENT PROVIDED SUCH
TRANSACTIONS FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE STATE
COMPTROLLER AS TRUSTEE OF THE COMMON RETIREMENT FUND AND TO THE MEMBERS,
RETIREES AND BENEFICIARIES OF SUCH FUND; AND
(D) CAUSING MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE PROFESSIONAL
SERVICE FIRMS TO HAVE MEANINGFUL PARTICIPATION AND TO RECEIVE A FAIR
SHARE OF SERVICE FEES EXPENDED BY THE COMMON RETIREMENT FUND RELATED TO
ITS CONTRACTS FOR ACCOUNTING, BANKING, FINANCIAL ADVISORY, INSURANCE,
LEGAL, RESEARCH, VALUATION AND OTHER FINANCIAL AND PROFESSIONAL SERVICES
TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH EXPENDITURES FULFILL THE
FIDUCIARY DUTIES AND OBLIGATIONS OF THE STATE COMPTROLLER AS TRUSTEE OF
S. 6888--B 6 A. 9976--B
THE COMMON RETIREMENT FUND AND TO THE MEMBERS, RETIREES AND BENEFICI-
ARIES OF SUCH FUND.
NOTHING IN THIS SUBDIVISION SHALL BE DEEMED AS REQUIRING OR PERMITTING
THE COMPTROLLER TO TAKE ANY ACTION CONTRARY TO THE FIDUCIARY DUTY OF THE
OFFICE OF THE COMPTROLLER, LAW OR SOUND INDUSTRY PRACTICES.
2. ONE YEAR AFTER THE EFFECTIVE DATE OF THIS SECTION, THE COMPTROLLER
SHALL DEVELOP AND IMPLEMENT A PLAN TO ACHIEVE THE GOALS SET FORTH IN
SUBDIVISION ONE OF THIS SECTION. IN ADDITION TO THE GOALS SET FORTH IN
SUBDIVISION ONE OF THIS SECTION, THE COMPTROLLER SHALL INCLUDE WITHIN
HIS OR HER MWBE ASSET MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY, THE
FOLLOWING:
(A) A METHODOLOGY SUFFICIENT TO ENSURE THAT MWBE ASSET MANAGERS, MWBE
FINANCIAL INSTITUTIONS AND MWBE SERVICE PROVIDERS ARE MADE AWARE OF THE
OPPORTUNITIES MADE AVAILABLE PURSUANT TO THE STRATEGY UNDERTAKEN BY THE
STATE COMPTROLLER ESTABLISHED TO MEET THE GOALS SET FORTH IN SUBDIVISION
ONE OF THIS SECTION;
(B) REQUIREMENTS RELATED TO ANNUAL REPORTING REGARDING (I) INVESTMENTS
WITH MWBE ASSET MANAGERS, COMMISSIONS AND TRADES WITH MWBE FINANCIAL
INSTITUTIONS, AND ANNUAL NON-COMMISSION EXPENDITURES (EXCLUDING INVEST-
MENT ALLOCATIONS) WITH OTHER MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE
FINANCIAL AND PROFESSIONAL SERVICES FIRMS TO THE COMMON RETIREMENT FUND
AS A PERCENTAGE OF TOTAL INVESTMENTS, COMMISSIONS OR EXPENDITURES, AS
APPLICABLE, FOR SUCH SERVICES BY THE COMMON RETIREMENT FUND, AND (II)
EFFORTS UNDERTAKEN DURING SUCH PERIOD TO SUPPORT THE MWBE ASSET MANAGE-
MENT AND FINANCIAL INSTITUTION STRATEGY; AND
(C) PROVISIONS FOR THE COORDINATION WITH THE DIVISION OF MINORITY AND
WOMEN-OWNED BUSINESS DEVELOPMENT TO IDENTIFY QUALIFIED MWBE ASSET MANAG-
ERS AND MWBE FINANCIAL INSTITUTIONS AND OTHER MWBES THAT PROVIDE FINAN-
CIAL AND PROFESSIONAL SERVICES TO CREATE A DATABASE OF SUCH ENTITIES AND
TO HAVE AN ANNUAL CONFERENCE TO PROMOTE THE MWBE ASSET MANAGEMENT AND
FINANCIAL INSTITUTION STRATEGY.
S 6. Subdivision 18 of section 508 of the education law, as added by
chapter 779 of the laws of 1982, is amended to read as follows:
18. Notwithstanding any other provision of this section, the retire-
ment board shall have the power to delegate to one or more investment
managers, INCLUDING, WITHOUT LIMITATION, EMERGING INVESTMENT MANAGERS
AND MWBE FINANCIAL INSTITUTIONS, AS DEFINED IN SECTION ONE HUNDRED
SEVENTY-SIX OF THE RETIREMENT AND SOCIAL SECURITY LAW, its authority to
invest moneys belonging to the retirement system. The term "investment
managers" as used in this subdivision shall include but not be limited
to independent contractors selected by the retirement board.
S 7. Subdivision 19 of section 508 of the education law is renumbered
subdivision 21 and two new subdivisions 19 and 20 are added to read as
follows:
19. THE FUNDS OF THE RETIREMENT SYSTEM MAY BE INVESTED WITH EMERGING
INVESTMENT MANAGERS AND WITH MWBE FINANCIAL INSTITUTIONS UPON SUCH TERMS
AND CONDITIONS AS THE RETIREMENT BOARD DEEMS TO BE IN THE BEST INTERESTS
OF THE RETIREMENT SYSTEM.
20. THE FUNDS OF THE RETIREMENT SYSTEM MAY BE INVESTED IN EQUITY AND
DEBT SECURITIES OF MWBE BUSINESSES, UPON SUCH TERMS AND CONDITIONS AS
THE RETIREMENT BOARD DEEMS TO BE IN THE BEST INTERESTS OF THE RETIREMENT
SYSTEM.
S 8. The education law is amended by adding a new section 508-a to
read as follows:
S 508-A. NEW YORK STATE TEACHERS' MWBE ASSET MANAGEMENT AND FINANCIAL
INSTITUTION STRATEGY. 1. WITHIN THE DISCRETION OF THE RETIREMENT BOARD
S. 6888--B 7 A. 9976--B
AND IN ACCORDANCE WITH AND SUBJECT TO ITS FIDUCIARY DUTIES AND OBLI-
GATIONS AS TRUSTEES OF THE RETIREMENT SYSTEM AND TO THE MEMBERS, RETI-
REES AND BENEFICIARIES OF SUCH SYSTEM AND SUCH OTHER INVESTMENT LIMITA-
TIONS AS MAY BE PRESCRIBED BY THIS CHAPTER, THE RETIREMENT BOARD SHALL
ESTABLISH A MWBE ASSET MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY,
WHICH SHALL INCLUDE, BUT SHALL NOT BE LIMITED TO, THE FOLLOWING GOALS:
(A) INVESTING NOT LESS THAN FIFTEEN PERCENT OF EXTERNALLY MANAGED
ASSETS OF THE RETIREMENT SYSTEM WITH MWBE ASSET MANAGERS TO THE GREATEST
EXTENT FEASIBLE PROVIDED SUCH INVESTMENTS FULFILL THE FIDUCIARY DUTIES
AND OBLIGATIONS OF THE RETIREMENT BOARD AS TRUSTEES OF THE RETIREMENT
SYSTEM AND TO THE MEMBERS, RETIREES AND BENEFICIARIES OF SUCH SYSTEM;
(B) SUBJECT TO BEST EXECUTION, (I) CONDUCTING TRADES OF PUBLIC EQUITY
SECURITIES PRODUCING NOT LESS THAN THIRTY-FIVE PERCENT OF COMMISSIONS IN
EACH FISCAL YEAR TO MWBE FINANCIAL INSTITUTIONS AND (II) CONDUCTING NOT
LESS THAN TWENTY-FIVE PERCENT OF THE RETIREMENT SYSTEM'S VOLUME OF FIXED
INCOME TRADING IN EACH FISCAL YEAR THROUGH MWBE FINANCIAL INSTITUTIONS
TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH TRANSACTIONS FULFILL THE
FIDUCIARY DUTIES AND OBLIGATIONS OF THE RETIREMENT BOARD AS TRUSTEES OF
THE RETIREMENT SYSTEM AND TO THE MEMBERS, RETIREES AND BENEFICIARIES OF
SUCH SYSTEM;
(C) ALLOCATING INVESTMENTS OF ASSETS OF THE RETIREMENT SYSTEM EITHER
THROUGH DIRECT INVESTMENTS OR INDIRECTLY THROUGH SPECIAL PROGRAMS
INVOLVING MWBE ASSET MANAGERS IN EQUITY AND DEBT SECURITIES OF MINORITY
AND WOMEN-OWNED BUSINESS ENTERPRISES CERTIFIED BY THE DIVISION OF MINOR-
ITY AND WOMEN-OWNED BUSINESS DEVELOPMENT PROVIDED SUCH TRANSACTIONS
FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE RETIREMENT BOARD AS
TRUSTEES OF THE RETIREMENT SYSTEM AND TO THE MEMBERS, RETIREES AND BENE-
FICIARIES OF SUCH SYSTEM; AND
(D) CAUSING MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE PROFESSIONAL
SERVICES FIRMS TO HAVE MEANINGFUL PARTICIPATION AND TO RECEIVE A FAIR
SHARE OF SERVICE FEE EXPENDITURES BY THE RETIREMENT SYSTEM ON CONTRACTS
FOR ACCOUNTING, BANKING, FINANCIAL ADVISORY, INSURANCE, LEGAL, RESEARCH,
VALUATION AND OTHER FINANCIAL AND PROFESSIONAL SERVICES TO THE GREATEST
EXTENT FEASIBLE PROVIDED SUCH EXPENDITURES FULFILL THE FIDUCIARY DUTIES
AND OBLIGATIONS OF THE RETIREMENT BOARD AS TRUSTEES OF THE RETIREMENT
SYSTEM AND TO THE MEMBERS, RETIREES AND BENEFICIARIES OF SUCH SYSTEM.
NOTHING IN THIS SUBDIVISION SHALL BE DEEMED AS REQUIRING OR PERMITTING
THE RETIREMENT BOARD TO TAKE ANY ACTION CONTRARY TO THE FIDUCIARY DUTY
OF THE RETIREMENT BOARD, LAW OR SOUND INDUSTRY PRACTICES.
2. AS USED IN THIS SECTION, THE TERMS "MWBE ASSET MANAGER", "MWBE
FINANCIAL INSTITUTIONS" AND "MWBE" SHALL HAVE THE MEANINGS SPECIFIED IN
SECTION ONE HUNDRED SEVENTY-SIX OF THE RETIREMENT AND SOCIAL SECURITY
LAW.
3. ONE YEAR AFTER THE EFFECTIVE DATE OF THIS SECTION, THE RETIREMENT
BOARD SHALL DEVELOP AND IMPLEMENT A PLAN TO ACHIEVE THE GOALS SET FORTH
IN SUBDIVISION ONE OF THIS SECTION. IN ADDITION TO THE GOALS SET FORTH
IN SUBDIVISION ONE OF THIS SECTION, THE RETIREMENT BOARD SHALL INCLUDE
WITHIN ITS MWBE ASSET MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY, THE
FOLLOWING:
(A) A METHODOLOGY SUFFICIENT TO ENSURE THAT MWBE ASSET MANAGERS, MWBE
FINANCIAL INSTITUTIONS AND MWBE FINANCIAL AND PROFESSIONAL SERVICES
PROVIDERS ARE MADE AWARE OF THE OPPORTUNITIES MADE AVAILABLE PURSUANT TO
THE STRATEGY UNDERTAKEN BY THE RETIREMENT BOARD ESTABLISHED TO MEET THE
GOALS SET FORTH IN SUBDIVISION ONE OF THIS SECTION;
(B) REQUIREMENTS RELATED TO ANNUAL REPORTING REGARDING (I) INVESTMENTS
WITH MWBE ASSET MANAGERS, COMMISSIONS AND TRADES WITH MWBE FINANCIAL
S. 6888--B 8 A. 9976--B
INSTITUTIONS, AND ANNUAL NON-COMMISSION EXPENDITURES (EXCLUDING INVEST-
MENT ALLOCATIONS) WITH OTHER MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE
FINANCIAL AND PROFESSIONAL SERVICES FIRMS TO THE RETIREMENT SYSTEM AS A
PERCENTAGE OF TOTAL INVESTMENTS, COMMISSIONS OR EXPENDITURES, AS APPLI-
CABLE, FOR SUCH SERVICES BY THE RETIREMENT SYSTEM, AND (II) EFFORTS
UNDERTAKEN DURING SUCH PERIOD TO SUPPORT THE MWBE ASSET MANAGEMENT AND
FINANCIAL INSTITUTION STRATEGY; AND
(C) PROVISIONS FOR THE COORDINATION WITH THE DIVISION OF MINORITY AND
WOMEN-OWNED BUSINESS DEVELOPMENT TO IDENTIFY QUALIFIED MWBE ASSET MANAG-
ERS AND MWBE FINANCIAL INSTITUTIONS AND OTHER MWBES THAT PROVIDE FINAN-
CIAL AND PROFESSIONAL SERVICES TO CREATE A DATABASE OF SUCH ENTITIES AND
TO HAVE AN ANNUAL CONFERENCE TO PROMOTE THE MWBE ASSET MANAGER AND
FINANCIAL INSTITUTION STRATEGY.
S 9. The workers' compensation law is amended by adding a new section
87-i to read as follows:
S 87-I. NEW YORK STATE INSURANCE FUND MWBE ASSET MANAGEMENT AND FINAN-
CIAL INSTITUTION STRATEGY. 1. WITHIN THE DISCRETION OF THE COMMISSIONERS
AND IN ACCORDANCE WITH AND SUBJECT TO THEIR FIDUCIARY DUTY AND OBLI-
GATIONS AS TRUSTEES OF THE STATE INSURANCE FUND AND TO THE BENEFICIARIES
OF SUCH FUND AND SUCH OTHER INVESTMENT LIMITATIONS AS MAY BE PRESCRIBED
BY THIS CHAPTER, THE COMMISSIONERS SHALL ESTABLISH A MWBE ASSET MANAGE-
MENT AND FINANCIAL INSTITUTION STRATEGY, WHICH SHALL INCLUDE, BUT SHALL
NOT BE LIMITED TO, THE FOLLOWING GOALS:
A. INVESTING NOT LESS THAN FIFTEEN PERCENT OF EXTERNALLY MANAGED
ASSETS OF THE STATE INSURANCE FUND WITH MWBE ASSET MANAGERS TO THE
GREATEST EXTENT FEASIBLE PROVIDED SUCH INVESTMENTS FULFILL THE FIDUCIARY
DUTIES AND OBLIGATIONS OF THE COMMISSIONERS AS TRUSTEES OF THE STATE
INSURANCE FUND AND TO THE BENEFICIARIES OF SUCH FUND;
B. SUBJECT TO BEST EXECUTION, (I) CONDUCTING TRADES OF PUBLIC EQUITY
SECURITIES PRODUCING NOT LESS THAN THIRTY-FIVE PERCENT OF COMMISSIONS IN
EACH FISCAL YEAR TO MWBE FINANCIAL INSTITUTIONS AND (II) CONDUCTING NOT
LESS THAN TWENTY-FIVE PERCENT OF THE INSURANCE FUND'S VOLUME OF FIXED
INCOME SECURITIES TRADING IN EACH FISCAL YEAR THROUGH MWBE FINANCIAL
INSTITUTIONS TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH TRANSACTIONS
FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE COMMISSIONERS AS
TRUSTEES OF THE STATE INSURANCE FUND AND TO THE MEMBERS, RETIREES AND
BENEFICIARIES OF SUCH FUND;
C. ALLOCATING INVESTMENTS OF ASSETS OF THE STATE INSURANCE FUND EITHER
THROUGH DIRECT INVESTMENTS OR INDIRECTLY THROUGH SPECIAL PROGRAMS
INVOLVING MWBE ASSET MANAGERS IN EQUITY AND DEBT SECURITIES OF MINORITY
AND WOMEN-OWNED BUSINESS ENTERPRISES TO THE GREATEST EXTENT FEASIBLE
PROVIDED SUCH INVESTMENTS FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS
OF THE COMMISSIONERS AS TRUSTEES OF THE STATE INSURANCE FUND AND TO THE
BENEFICIARIES OF SUCH FUND; AND
D. CAUSING MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE PROFESSIONAL
SERVICE FIRMS TO HAVE MEANINGFUL PARTICIPATION AND TO RECEIVE A FAIR
SHARE OF SERVICE FEE EXPENDITURES BY THE STATE INSURANCE FUND ON
CONTRACTS FOR ACCOUNTING, BANKING, FINANCIAL ADVISORY, INSURANCE, LEGAL,
RESEARCH, VALUATION AND OTHER PROFESSIONAL AND FINANCIAL SERVICES WITH
MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE FINANCIAL AND PROFESSIONAL
SERVICES FIRMS TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH EXPENDI-
TURES FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE COMMISSIONERS
AS TRUSTEES OF THE STATE INSURANCE FUND AND TO THE BENEFICIARIES OF SUCH
FUND.
S. 6888--B 9 A. 9976--B
NOTHING IN THIS SUBDIVISION SHALL BE DEEMED AS REQUIRING OR PERMITTING
THE COMMISSIONERS TO TAKE ANY ACTION CONTRARY TO THE FIDUCIARY DUTY OF
THE COMMISSIONERS, LAW OR SOUND INDUSTRY PRACTICES.
2. AS USED IN THIS SECTION, THE TERMS "MWBE ASSET MANAGER", "MWBE
FINANCIAL INSTITUTIONS" AND "MWBE" SHALL HAVE THE MEANINGS SPECIFIED IN
SECTION ONE HUNDRED SEVENTY-SIX OF THE RETIREMENT AND SOCIAL SECURITY
LAW.
3. ONE YEAR AFTER THE EFFECTIVE DATE OF THIS SECTION, THE COMMISSION-
ERS SHALL DEVELOP AND IMPLEMENT A PLAN TO ACHIEVE THE GOALS SET FORTH IN
SUBDIVISION ONE OF THIS SECTION. IN ADDITION TO THE GOALS SET FORTH IN
SUBDIVISION ONE OF THIS SECTION, THE COMMISSIONERS SHALL INCLUDE WITHIN
ITS MWBE ASSET MANAGER AND FINANCIAL INSTITUTION STRATEGY, THE FOLLOW-
ING:
A. A METHODOLOGY SUFFICIENT TO ENSURE THAT MWBE MANAGERS, MWBE FINAN-
CIAL INSTITUTIONS AND MWBE SERVICE PROVIDERS ARE MADE AWARE OF THE
OPPORTUNITIES MADE AVAILABLE PURSUANT TO THE STRATEGY UNDERTAKEN BY THE
COMMISSIONERS ESTABLISHED TO MEET THE GOALS SET FORTH IN SUBDIVISION ONE
OF THIS SECTION;
B. REQUIREMENTS RELATED TO ANNUAL REPORTING REGARDING (I) INVESTMENTS
WITH MWBE ASSET MANAGERS, COMMISSIONS AND TRADES WITH MWBE FINANCIAL
INSTITUTIONS, AND ANNUAL NON-COMMISSION EXPENDITURES (EXCLUDING INVEST-
MENT ALLOCATIONS) WITH OTHER MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE
FINANCIAL AND PROFESSIONAL SERVICES FIRMS TO THE STATE INSURANCE FUND AS
A PERCENTAGE OF TOTAL INVESTMENTS, COMMISSIONS OR EXPENDITURES, AS
APPLICABLE, FOR SUCH SERVICES BY THE STATE INSURANCE FUND; AND (II)
EFFORTS UNDERTAKEN DURING SUCH PERIOD TO SUPPORT THE MWBE ASSET MANAGE-
MENT AND FINANCIAL INSTITUTION STRATEGY; AND
C. PROVISIONS FOR COORDINATION WITH THE DIVISION OF MINORITY AND
WOMEN-OWNED BUSINESS DEVELOPMENT TO IDENTIFY QUALIFIED MWBE ASSET MANAG-
ERS AND MWBE FINANCIAL INSTITUTIONS AND OTHER MWBES THAT PROVIDE FINAN-
CIAL AND PROFESSIONAL SERVICES TO CREATE A DATABASE OF SUCH ENTITIES AND
TO HAVE AN ANNUAL CONFERENCE TO PROMOTE THE MWBE ASSET MANAGEMENT AND
FINANCIAL INSTITUTION STRATEGY.
S 10. Paragraphs c, d, e and f of subdivision 2 of section 5 of the
state finance law are relettered paragraphs d, e, f and g and a new
paragraph c is added to read as follows:
C. (I) WITHIN THE DISCRETION OF THE DEFERRED COMPENSATION BOARD AND IN
ACCORDANCE WITH AND SUBJECT TO THE FIDUCIARY DUTY AND OBLIGATIONS OF THE
DEFERRED COMPENSATION BOARD AS TRUSTEE OF THE DEFERRED COMPENSATION
PLANS AND TO THE MEMBERS, RETIREES AND BENEFICIARIES OF SUCH PLANS AND
SUCH OTHER INVESTMENT LIMITATIONS AS MAY BE PRESCRIBED BY THIS CHAPTER,
THE DEFERRED COMPENSATION BOARD SHALL ESTABLISH AN MWBE ASSET MANAGEMENT
AND FINANCIAL INSTITUTION STRATEGY, WHICH MAY INCLUDE, BUT SHALL NOT BE
LIMITED TO, THE FOLLOWING GOALS:
(A) INVESTING NOT LESS THAN FIFTEEN PERCENT OF EXTERNALLY MANAGED
ASSETS OF THE DEFERRED COMPENSATION PLANS WITH MWBE ASSET MANAGERS TO
THE GREATEST EXTENT FEASIBLE PROVIDED SUCH INVESTMENTS FULFILL THE FIDU-
CIARY DUTIES AND OBLIGATIONS OF THE DEFERRED COMPENSATION BOARD AS TRUS-
TEES OF THE DEFERRED COMPENSATION PLANS AND TO THE MEMBERS, RETIREES AND
BENEFICIARIES OF SUCH PLANS;
(B) SUBJECT TO BEST EXECUTION, (1) CONDUCTING TRADES OF PUBLIC EQUITY
SECURITIES PRODUCING NOT LESS THAN THIRTY-FIVE PERCENT OF COMMISSIONS IN
EACH FISCAL YEAR DIRECTED TO MWBE FINANCIAL INSTITUTIONS AND (2)
CONDUCTING NOT LESS THAN TWENTY-FIVE PERCENT OF THE DEFERRED COMPEN-
SATION PLANS' VOLUME OF FIXED INCOME SECURITIES TRADING THROUGH MWBE
FINANCIAL INSTITUTIONS TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH
S. 6888--B 10 A. 9976--B
TRANSACTIONS FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE
DEFERRED COMPENSATION BOARD AS TRUSTEES OF THE DEFERRED COMPENSATION
PLANS AND TO THE BENEFICIARIES OF SUCH PLANS;
(C) ALLOCATING INVESTMENTS OF ASSETS OF THE DEFERRED COMPENSATION
PLANS EITHER THROUGH DIRECT INVESTMENTS OR INDIRECTLY THROUGH SPECIAL
PROGRAMS INVOLVING MWBE ASSET MANAGERS IN EQUITY AND DEBT SECURITIES OF
MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES TO THE GREATEST EXTENT
FEASIBLE PROVIDED SUCH TRANSACTIONS FULFILL THE FIDUCIARY DUTIES AND
OBLIGATIONS OF THE DEFERRED COMPENSATION BOARD AS TRUSTEES OF THE
DEFERRED COMPENSATION PLANS AND TO THE BENEFICIARIES OF SUCH PLANS; AND
(D) CAUSING MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE PROFESSIONAL
SERVICES FIRMS TO HAVE MEANINGFUL PARTICIPATION AND TO RECEIVE A FAIR
SHARE OF SERVICE FEE EXPENDITURES BY THE DEFERRED COMPENSATION PLANS ON
CONTRACTS FOR ACCOUNTING, BANKING, FINANCIAL ADVISORY, INSURANCE, LEGAL,
RESEARCH, VALUATION AND OTHER PROFESSIONAL AND FINANCIAL SERVICES WITH
MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE FINANCIAL AND PROFESSIONAL
SERVICES FIRMS TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH TRANS-
ACTIONS FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE DEFERRED
COMPENSATION BOARD AS TRUSTEES OF DEFERRED COMPENSATION PLANS AND TO THE
BENEFICIARIES OF SUCH PLANS.
NOTHING IN THIS SUBPARAGRAPH SHALL BE DEEMED AS REQUIRING OR PERMIT-
TING THE DEFERRED COMPENSATION BOARD TO TAKE ANY ACTION CONTRARY TO THE
FIDUCIARY DUTY OF THE BOARD, LAW OR SOUND INDUSTRY PRACTICES.
(II) AS USED IN THIS PARAGRAPH, THE TERMS "MWBE ASSET MANAGER", "MWBE
FINANCIAL INSTITUTIONS" AND "MWBE" SHALL HAVE THE MEANINGS SPECIFIED IN
SECTION ONE HUNDRED SEVENTY-SIX OF THE RETIREMENT AND SOCIAL SECURITY
LAW.
(III) ONE YEAR AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH, THE
DEFERRED COMPENSATION BOARD SHALL DEVELOP AND IMPLEMENT A PLAN TO
ACHIEVE THE GOALS SET FORTH IN SUBPARAGRAPH (I) OF THIS PARAGRAPH. IN
ADDITION TO THE GOALS SET FORTH IN SUBPARAGRAPH (I) OF THIS PARAGRAPH,
THE DEFERRED COMPENSATION BOARD SHALL INCLUDE WITHIN ITS MWBE ASSET
MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY, THE FOLLOWING:
(A) A METHODOLOGY SUFFICIENT TO ENSURE THAT MWBE ASSET MANAGERS ARE
MADE AWARE OF THE OPPORTUNITIES MADE AVAILABLE PURSUANT TO THE STRATEGY
UNDERTAKEN BY THE DEFERRED COMPENSATION BOARD ESTABLISHED TO MEET THE
GOALS SET FORTH IN SUBPARAGRAPH (I) OF THIS PARAGRAPH;
(B) REQUIREMENTS RELATED TO ANNUAL REPORTING REGARDING (1) INVESTMENTS
WITH MWBE ASSET MANAGERS, COMMISSIONS AND TRADES WITH MWBE FINANCIAL
INSTITUTIONS, AND ANNUAL NON-COMMISSION EXPENDITURES, EXCLUDING INVEST-
MENT ALLOCATIONS, WITH OTHER MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE
FINANCIAL AND PROFESSIONAL SERVICES FIRMS TO THE DEFERRED COMPENSATION
PLANS AS A PERCENTAGE OF TOTAL INVESTMENTS, COMMISSIONS OR EXPENDITURES,
AS APPLICABLE, FOR SUCH SERVICES BY THE DEFERRED COMPENSATION PLANS, AND
(2) EFFORTS UNDERTAKEN DURING SUCH PERIOD TO SUPPORT THE MWBE ASSET
MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY; AND
(C) PROVISIONS FOR COORDINATION WITH THE DIVISION OF MINORITY AND
WOMEN-OWNED BUSINESS DEVELOPMENT TO IDENTIFY QUALIFIED MWBE ASSET MANAG-
ERS AND MWBE FINANCIAL INSTITUTIONS AND OTHER MWBES THAT PROVIDE FINAN-
CIAL AND PROFESSIONAL SERVICES TO CREATE A DATABASE OF SUCH ENTITIES AND
TO HAVE AN ANNUAL CONFERENCE TO PROMOTE THE MWBE ASSET MANAGEMENT AND
FINANCIAL INSTITUTION STRATEGY.
S 11. Section 136-b of the state finance law, as added by chapter 261
of the laws of 1988, is amended to read as follows:
S 136-b. [Selection of underwriters by state agencies. Whenever a
state agency, as defined in article fifteen-A of the executive law,
S. 6888--B 11 A. 9976--B
sells its bonds, notes or other securities at a private sale, in select-
ing one or more underwriters to purchase such securities the state agen-
cy shall consider, among other things, the participation of firms certi-
fied pursuant to such article as minority or women-owned firms and the
ability of other firms under consideration to work with minority and
women-owned business enterprises so as to promote and assist partic-
ipation by such enterprises.] NEW YORK STATE AGENCY AND AUTHORITY MWBE
ASSET MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY. 1. DEFINITIONS.
FOR PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
ING MEANINGS:
(A) THE TERM "MWBE ASSET MANAGER" SHALL MEAN AN ASSET MANAGER IN ANY
OF THE FOLLOWING ASSET CLASSES: PUBLIC EQUITY OR FIXED INCOME SECURI-
TIES, HEDGE FUNDS, FUND OF HEDGE FUNDS, PRIVATE EQUITY (INCLUDING
VENTURE CAPITAL), FUND OF PRIVATE EQUITY FUNDS, REAL ESTATE INVESTMENT
FUNDS, FUND OF REAL ESTATE INVESTMENT FUNDS, THAT IS (I) A MWBE WITH
SIGNIFICANT PRESENCE OR INVESTMENTS IN NEW YORK STATE AND (II) A REGIS-
TERED INVESTMENT ADVISOR OR EXEMPT FROM SUCH REGISTRATION.
(B) THE TERM "MWBE FINANCIAL INSTITUTION" SHALL MEAN, (I) AS IT
RELATES TO BROKERAGE SERVICES, A REGISTERED BROKER DEALER THAT IS A MWBE
WITH SIGNIFICANT PRESENCE OR INVESTMENTS IN NEW YORK STATE; OR (II) AS
IT RELATES TO ANY OTHER FINANCIAL SERVICES, A MINORITY OR WOMEN-OWNED
BUSINESS ENTERPRISE WITH SIGNIFICANT PRESENCE OR INVESTMENTS IN NEW YORK
STATE THAT PROVIDES BANKING, FINANCIAL ADVISORY, INSURANCE, FINANCIAL
RESEARCH, VALUATION, UNDERWRITING OR OTHER FINANCIAL SERVICES.
(C) THE TERM "MINORITY GROUP MEMBER" SHALL MEAN A UNITED STATES CITI-
ZEN OR PERMANENT RESIDENT ALIEN WHO IS AND CAN DEMONSTRATE MEMBERSHIP IN
ONE OF THE FOLLOWING GROUPS:
(I) BLACK PERSONS HAVING ORIGINS IN ANY OF THE BLACK AFRICAN RACIAL
GROUPS;
(II) HISPANIC PERSONS OF MEXICAN, PUERTO RICAN, DOMINICAN, CUBAN,
CENTRAL OR SOUTH AMERICAN OF EITHER INDIAN OR HISPANIC ORIGIN, REGARD-
LESS OF RACE;
(III) NATIVE AMERICAN OR ALASKAN NATIVE PERSONS HAVING ORIGINS IN ANY
OF THE ORIGINAL PEOPLES OF NORTH AMERICA; OR
(IV) ASIAN AND PACIFIC ISLANDER PERSONS HAVING ORIGINS IN ANY OF THE
FAR EAST COUNTRIES, SOUTHEAST ASIA, THE INDIAN SUBCONTINENT OR THE
PACIFIC ISLANDS.
(D) THE TERM "MWBE" SHALL MEAN A BUSINESS ENTERPRISE WITH SIGNIFICANT
PRESENCE OR INVESTMENTS IN NEW YORK STATE, INCLUDING WITHOUT LIMITATION,
A SOLE PROPRIETORSHIP, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABIL-
ITY PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION OR OTHER SIMILAR
ENTITY WHETHER DOMESTIC OR FOREIGN, THAT IS:
(I) (A) AT LEAST FIFTY-ONE PERCENT OWNED BY EITHER (1) ONE OR MORE
MINORITY GROUP MEMBERS; OR (2) ONE OR MORE WOMEN, IN EACH CASE, WHO HAVE
SIGNIFICANT EXPERIENCE IN ASSET MANAGEMENT, BROKERAGE, OTHER FINANCIAL
SERVICES OR RELATED PROFESSIONAL SERVICES SUCH AS ACCOUNTING, VALUATION
OR LEGAL SERVICES; OR
(B) AT LEAST THIRTY PERCENT OWNED BY EITHER (1) ONE OR MORE MINORITY
GROUP MEMBERS, OR (2) ONE OR MORE WOMEN, IN EACH CASE, WHO HAVE SIGNIF-
ICANT EXPERIENCE IN ASSET MANAGEMENT, BROKERAGE, OTHER FINANCIAL
SERVICES OR RELATED PROFESSIONAL SERVICES SUCH AS ACCOUNTING, VALUATION
OR LEGAL SERVICES.
(C) WITH RESPECT TO A BUSINESS ENTERPRISE AT LEAST THIRTY PERCENT
OWNED BY (1) ONE OR MORE MINORITY GROUP MEMBERS, OR (2) ONE OR MORE
WOMEN, IMMEDIATELY PRIOR TO HAVING AT LEAST THIRTY PERCENT OF SUCH
OWNERSHIP, SUCH BUSINESS ENTERPRISE MUST HAVE BEEN CERTIFIED BY THE
S. 6888--B 12 A. 9976--B
DEPARTMENT OF ECONOMIC DEVELOPMENT'S DIVISION OF WOMEN AND
MINORITY-OWNED BUSINESS DEVELOPMENT AS A MINORITY OR WOMEN-OWNED BUSI-
NESS ENTERPRISE AT LEAST FIFTY-ONE PERCENT OWNED BY EITHER (3) ONE OR
MORE MINORITY GROUP MEMBERS, OR (4) ONE OR MORE WOMEN;
(II) AN ENTERPRISE IN WHICH SUCH MINORITY OWNERSHIP OR OWNERSHIP BY
WOMEN, AS APPLICABLE, IS REAL, SUBSTANTIAL AND CONTINUING;
(III) AN ENTERPRISE IN WHICH SUCH MINORITY OWNERSHIP OR WOMEN OWNER-
SHIP, AS APPLICABLE, HAS AND EXERCISES THE AUTHORITY TO CONTROL INDE-
PENDENTLY THE DAY-TO-DAY BUSINESS DECISIONS OF THE ENTERPRISE;
(IV) AN ENTERPRISE AUTHORIZED TO DO BUSINESS IN THIS STATE AND INDE-
PENDENTLY OWNED AND OPERATED; AND
(V) AN ENTERPRISE CERTIFIED BY THE DEPARTMENT OF ECONOMIC DEVELOP-
MENT'S DIVISION OF WOMEN AND MINORITY-OWNED BUSINESS DEVELOPMENT AS A
"FINANCIAL/PROFESSIONAL MWBE".
(E) THE TERM "STATE AGENCY" SHALL MEAN (I) (A) ANY STATE DEPARTMENT,
OR (B) ANY DIVISION, BOARD, COMMISSION OR BUREAU OF ANY STATE DEPART-
MENT, OR (C) THE STATE UNIVERSITY OF NEW YORK AND THE CITY UNIVERSITY OF
NEW YORK, INCLUDING ALL THEIR CONSTITUENT UNITS EXCEPT COMMUNITY
COLLEGES AND THE INDEPENDENT INSTITUTIONS OPERATING STATUTORY OR
CONTRACT COLLEGES ON BEHALF OF THE STATE, OR (D) A BOARD, A MAJORITY OF
WHOSE MEMBERS ARE APPOINTED BY THE GOVERNOR OR WHO SERVE BY VIRTUE OF
BEING STATE OFFICERS OR EMPLOYEES AS DEFINED IN SUBPARAGRAPH (I), (II)
OR (III) OF PARAGRAPH (I) OF SUBDIVISION ONE OF SECTION SEVENTY-THREE OF
THE PUBLIC OFFICERS LAW; OR
(II) ANY OF THE FOLLOWING:
ALBANY COUNTY AIRPORT AUTHORITY;
ALBANY PORT DISTRICT COMMISSION;
ALFRED, ALMOND, HORNELLSVILLE SEWER AUTHORITY;
BATTERY PARK CITY AUTHORITY;
CAYUGA COUNTY WATER AND SEWER AUTHORITY;
(NELSON A. ROCKEFELLER) EMPIRE STATE PLAZA PERFORMING ARTS CENTER
CORPORATION;
INDUSTRIAL EXHIBIT AUTHORITY;
LIVINGSTON COUNTY WATER AND SEWER AUTHORITY;
LONG ISLAND POWER AUTHORITY;
LONG ISLAND RAIL ROAD;
LONG ISLAND MARKET AUTHORITY;
MANHATTAN AND BRONX SURFACE TRANSIT OPERATING AUTHORITY;
METRO-NORTH COMMUTER RAILROAD;
METROPOLITAN SUBURBAN BUS AUTHORITY;
METROPOLITAN TRANSPORTATION AUTHORITY;
NATURAL HERITAGE TRUST;
NEW YORK CITY TRANSIT AUTHORITY;
NEW YORK CONVENTION CENTER OPERATING CORPORATION;
NEW YORK STATE BRIDGE AUTHORITY;
NEW YORK STATE OLYMPIC REGIONAL DEVELOPMENT AUTHORITY;
NEW YORK STATE THRUWAY AUTHORITY;
NIAGARA FALLS PUBLIC WATER AUTHORITY;
NIAGARA FALLS WATER BOARD;
PORT OF OSWEGO AUTHORITY;
POWER AUTHORITY OF THE STATE OF NEW YORK;
ROOSEVELT ISLAND OPERATING CORPORATION;
SCHENECTADY METROPLEX DEVELOPMENT AUTHORITY;
STATE INSURANCE FUND;
STATEN ISLAND RAPID TRANSIT OPERATING AUTHORITY;
STATE UNIVERSITY CONSTRUCTION FUND;
S. 6888--B 13 A. 9976--B
TRIBOROUGH BRIDGE AND TUNNEL AUTHORITY;
UPPER MOHAWK VALLEY REGIONAL WATER BOARD;
UPPER MOHAWK VALLEY REGIONAL WATER FINANCE AUTHORITY;
UPPER MOHAWK VALLEY MEMORIAL AUDITORIUM AUTHORITY;
URBAN DEVELOPMENT CORPORATION AND ITS SUBSIDIARY CORPORATIONS.
(III) ANY OF THE FOLLOWING ONLY TO THE EXTENT OF STATE CONTRACTS
ENTERED INTO FOR ITS OWN ACCOUNT OR FOR THE BENEFIT OF A STATE AGENCY AS
DEFINED IN SUBPARAGRAPH (I) OR (II) OF THIS PARAGRAPH:
DORMITORY AUTHORITY OF THE STATE OF NEW YORK;
FACILITIES DEVELOPMENT CORPORATION;
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY;
NEW YORK STATE SCIENCE AND TECHNOLOGY FOUNDATION.
2. APPLICATION OF THIS SECTION. TO THE EXTENT THAT ANY STATE AGENCY
ENGAGES OR PLANS TO ENGAGE THIRD-PARTIES TO (A) MANAGE CASH ASSETS OR
INVESTMENT SECURITIES HELD BY SUCH STATE AGENCY IN EXCESS OF FIVE
HUNDRED MILLION DOLLARS IN THE AGGREGATE; (B) PROVIDE BROKER-DEALER
SERVICES TO SUCH STATE AGENCY RESULTING OR LIKELY TO RESULT IN COMMIS-
SIONS IN EXCESS OF TWO MILLION FIVE HUNDRED THOUSAND DOLLARS IN THE
AGGREGATE IN A FISCAL YEAR OR TRADES OF FIXED INCOME SECURITIES WITH
VOLUME IN EXCESS OF TWENTY-FIVE MILLION DOLLARS IN A FISCAL YEAR; OR (C)
PROVIDE OTHER FINANCIAL OR PROFESSIONAL SERVICES TO SUCH STATE AGENCY
RESULTING IN FEES FOR SERVICES EQUAL TO OR EXCEEDING TWO MILLION FIVE
HUNDRED THOUSAND DOLLARS IN THE AGGREGATE IN A FISCAL YEAR OR TWO
HUNDRED FIFTY THOUSAND DOLLARS IN A SINGLE TRANSACTION, SUCH STATE AGEN-
CY SHALL COMPLY WITH THE REQUIREMENTS OF THIS SECTION.
3. MWBE ASSET MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY. (A) IN
THE EVENT THAT ANY STATE AGENCY CONDUCTS OR HAS CONDUCTED TRANSACTIONS
FALLING WITHIN THE SCOPE OF THE TRANSACTIONS DESCRIBED IN SUBDIVISION
TWO OF THIS SECTION, SUCH STATE AGENCY SHALL ESTABLISH A MWBE ASSET
MANAGEMENT AND FINANCIAL INSTITUTION STRATEGY WITH THE FOLLOWING GOALS:
(I) INVESTING NOT LESS THAN FIFTEEN PERCENT OF EXTERNALLY MANAGED
ASSETS OF SUCH STATE AGENCY WITH MWBE ASSET MANAGERS TO THE GREATEST
EXTENT FEASIBLE PROVIDED SUCH INVESTMENTS FULFILL THE FIDUCIARY DUTIES
AND OBLIGATIONS OF THE MANAGEMENT AND OFFICERS OF THE STATE AGENCIES;
(II) SUBJECT TO BEST EXECUTION, (A) CONDUCTING TRADES OF PUBLIC EQUITY
SECURITIES PRODUCING NOT LESS THAN THIRTY-FIVE PERCENT OF COMMISSIONS IN
EACH FISCAL YEAR TO MWBE FINANCIAL INSTITUTIONS; AND (B) CONDUCTING NOT
LESS THAN TWENTY-FIVE PERCENT OF THE STATE AGENCY'S VOLUME OF FIXED
INCOME SECURITIES TRADING IN EACH FISCAL YEAR THROUGH MWBE FINANCIAL
INSTITUTIONS TO THE GREATEST EXTENT FEASIBLE PROVIDED SUCH INVESTMENTS
FULFILL THE FIDUCIARY DUTIES AND OBLIGATIONS OF THE MANAGEMENT AND OFFI-
CERS OF THE STATE AGENCIES; AND
(III) INCREASING EXPENDITURES ON CONTRACTS FOR ACCOUNTING, BANKING,
FINANCIAL ADVISORY, INSURANCE, LEGAL, RESEARCH, VALUATION, UNDERWRITING
AND OTHER PROFESSIONAL AND FINANCIAL SERVICES WITH MWBE FINANCIAL INSTI-
TUTIONS AND OTHER MWBE FINANCIAL AND PROFESSIONAL SERVICE FIRMS TO THE
GREATEST EXTENT FEASIBLE PROVIDED SUCH TRANSACTIONS FULFILL THE FIDUCI-
ARY DUTIES AND OBLIGATIONS OF MANAGEMENT AND OFFICERS OF THE STATE AGEN-
CIES.
NOTHING IN THIS SUBDIVISION SHALL BE DEEMED AS REQUIRING OR PERMITTING
ANY STATE AGENCY TO TAKE ANY ACTION CONTRARY TO THE FIDUCIARY DUTY OF
THE MANAGEMENT OF SUCH STATE AGENCY, LAW OR SOUND INDUSTRY PRACTICES.
(B) BY THE LATER OF ONE YEAR FROM THE EFFECTIVE DATE OF THIS SECTION
OR ONE YEAR FOLLOWING THE DATE THAT THE REQUIREMENTS OF THIS SECTION
SHALL APPLY TO A STATE AGENCY AS A RESULT OF THE EVENTS DESCRIBED IN
SUBDIVISION TWO OF THIS SECTION, THE CHIEF EXECUTIVE OFFICER AND/OR
S. 6888--B 14 A. 9976--B
MANAGING BODY OF SUCH STATE AGENCY SHALL DEVELOP AND IMPLEMENT A PLAN TO
ACHIEVE THE GOALS SET FORTH IN PARAGRAPH (A) OF THIS SUBDIVISION,
INCLUDING, WITHOUT LIMITATION:
(I) A METHODOLOGY SUFFICIENT TO ENSURE THAT MWBE ASSET MANAGERS, MWBE
FINANCIAL INSTITUTIONS AND MWBE SERVICE PROVIDERS ARE MADE AWARE OF THE
OPPORTUNITIES MADE AVAILABLE PURSUANT TO THE STRATEGY UNDERTAKEN BY THE
MANAGEMENT OF THE APPLICABLE STATE AGENCY ESTABLISHED TO MEET THE GOALS
SET FORTH IN PARAGRAPH (A) ONE OF THIS SUBDIVISION;
(II) REQUIREMENTS RELATED TO ANNUAL REPORTING REGARDING (A) INVEST-
MENTS WITH MWBE ASSET MANAGERS, COMMISSIONS WITH MWBE FINANCIAL INSTI-
TUTIONS, AND ANNUAL NON-COMMISSION EXPENDITURES (EXCLUDING INVESTMENT
ALLOCATIONS) WITH OR FEES PAID TO OTHER MWBE FINANCIAL INSTITUTIONS AND
OTHER MWBE FIRMS THAT PROVIDE FINANCIAL SERVICES OR OTHER PROFESSIONAL
SERVICES TO THE STATE AGENCY, AS APPLICABLE, AS A PERCENTAGE OF TOTAL
INVESTMENTS, COMMISSIONS OR EXPENDITURES, AS APPLICABLE, FOR SUCH
SERVICES BY SUCH STATE AGENCY; AND (B) EFFORTS UNDERTAKEN DURING SUCH
PERIOD TO SUPPORT THE MWBE ASSET MANAGEMENT AND FINANCIAL INSTITUTION
STRATEGY; AND
(III) PROVISIONS FOR COORDINATION WITH THE DIVISION OF MINORITY AND
WOMEN-OWNED BUSINESS DEVELOPMENT TO IDENTIFY QUALIFIED MWBE ASSET MANAG-
ERS AND MWBE FINANCIAL INSTITUTIONS AND OTHER MWBE FINANCE AND PROFES-
SIONAL SERVICES FIRMS TO CREATE A DATABASE OF SUCH ENTITIES AND TO HAVE
AN ANNUAL CONFERENCE TO PROMOTE THE MWBE ASSET MANAGEMENT AND FINANCIAL
INSTITUTION STRATEGY.
S 12. The provisions of this act are severable, and if any part or
provision hereof, or the application thereof to any person or circum-
stance, shall be adjudged by any court of competent jurisdiction to be
invalid or unenforceable, such judgment shall not affect, impair or
invalidate the remaining provisions of this act or the application of
any such remaining provisions to any person or circumstance, but shall
be confined in its operation to the provision, person or circumstance
directly involved in the controversy in which such judgment shall have
been rendered.
S 13. This act shall take effect on the ninetieth day after it shall
have become a law; provided, however, that the amendments to section
136-b of the state finance law made by section eleven of this act shall
not affect the expiration of such section and shall be deemed to expire
therewith.