S T A T E O F N E W Y O R K
________________________________________________________________________
9801
I N A S S E M B L Y
April 18, 2022
___________
Introduced by M. of A. EPSTEIN -- read once and referred to the Commit-
tee on Governmental Operations
AN ACT to amend the state finance law and the legislative law, in
relation to the preferred status and sources for commodities produced
by certain organizations and agencies; and to amend chapter 83 of the
laws of 1995 amending the state finance law and other laws relating to
bonds, notes, and revenues, in relation to extending the expiration
date of certain provisions thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 162 of the state finance law, as added by chapter
83 of the laws of 1995, subdivision 2 as amended by chapter 501 of the
laws of 2002, paragraph b of subdivision 2 as amended by chapter 519 of
the laws of 2003, paragraph a of subdivisions 2, 3 and 6, paragraph b of
subdivision 3, subparagraph (i) of paragraph a of subdivision 4, subdi-
vision 5, and paragraph d of subdivision 6 as amended by section 164 of
subpart B of part C of chapter 62 of the laws of 2011, subparagraph
(iii) of paragraph b of subdivision 4 as amended by chapter 430 of the
laws of 1997, paragraph e of subdivision 6 as amended by chapter 265 of
the laws of 2013, subdivision 7 as amended by chapter 426 of the laws of
2002, and paragraph a of subdivision 8 as amended by chapter 95 of the
laws of 2000, is amended to read as follows:
§ 162. Preferred sources. 1. Purpose. To advance special social and
economic goals, selected providers shall have preferred source status
for the purposes of procurement in accordance with the provisions of
this section. Procurement from these providers shall be exempted from
the competitive procurement provisions of section one hundred sixty-
three of this article and other competitive procurement statutes. Such
exemption shall apply to commodities produced, manufactured or assem-
bled, including those repackaged to meet the form, function and utility
required by state agencies, in New York state and, where so designated,
services provided by those sources in accordance with this section.
2. Preferred status. Preferred status as prescribed in this section
shall be accorded to:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10787-01-1
A. 9801 2
a. [Commodities produced by the correctional industries program of the
department of corrections and community supervision and provided to the
state pursuant to subdivision two of section one hundred eighty-four of
the correction law;
b.] Commodities and services produced by any qualified charitable
non-profit-making agency for the blind approved for such purposes by the
commissioner of the office of children and family services;
[c.] B. Commodities and services produced by any special employment
program serving mentally ill persons, which shall not be required to be
incorporated and which is operated by facilities within the office of
mental health and is approved for such purposes by the commissioner of
mental health;
[d.] C. Commodities and services produced by any qualified charitable
non-profit-making agency for other severely disabled persons approved
for such purposes by the commissioner of education, or incorporated
under the laws of this state and approved for such purposes by the
commissioner of education;
[e.] D. Commodities and services produced by a qualified veterans'
workshop providing job and employment-skills training to veterans where
such a workshop is operated by the United States department of veterans
affairs and is manufacturing products or performing services within this
state and where such workshop is approved for such purposes by the
commissioner of education; or
[f.] E. Commodities and services produced by any qualified charitable
non-profit-making workshop for veterans approved for such purposes by
the commissioner of education, or incorporated under the laws of this
state and approved for such purposes by the commissioner of education.
3. Public list of services and commodities provided by preferred
sources.
a. By December thirty-first, nineteen hundred ninety-five, the commis-
sioner, in consultation with the commissioners of [corrections and
community supervision,] the office of children and family services, the
office of temporary and disability assistance, mental health and educa-
tion, shall prepare a list of all commodities and services that are
available and are being provided as of said date, for purchase by state
agencies, public benefit corporations or political subdivisions from
those entities accorded preference or priority status under this
section. Such list may include references to catalogs and other descrip-
tive literature which are available directly from any provider accorded
preferred status under this section. The commissioner shall make this
list available to prospective vendors, state agencies, public benefit
corporations, political subdivisions and other interested parties. Ther-
eafter, new or substantially different commodities or services may only
be made available by preferred sources for purchase by more than one
state agency, public benefit corporation or political subdivision after
addition to said list.
b. After January first, nineteen hundred ninety-six, upon the applica-
tion of [the commissioner of corrections and community supervision,] the
commissioner of the office of children and family services, the office
of temporary and disability assistance, the commissioner of mental
health or the commissioner of education, or a non-profit-making facili-
tating agency designated by one of the said commissioners pursuant to
paragraph e of subdivision [six] FIVE of this section, the state
procurement council may recommend that the commissioner: (i) add commod-
ities or services to, or (ii) in order to insure that such list reflects
current production and/or availability of commodities and services,
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delete at the request of a preferred source, commodities or services
from, the list established by paragraph a of this subdivision. The coun-
cil may make a non-binding recommendation to the relevant preferred
source to delete a commodity or service from such list. Additions may be
made only for new services or commodities, or for services or commod-
ities that are substantially different from those reflected on said list
for that provider. The decision to recommend the addition of services or
commodities shall be based upon a review of relevant factors as deter-
mined by the council including costs and benefits to be derived from
such addition and shall include an analysis by the office of general
services conducted pursuant to subdivision [six] FIVE of this section.
Unless the state procurement council shall make a recommendation to the
commissioner on any such application within one hundred twenty days of
receipt thereof, such application shall be deemed recommended. In the
event that the state procurement council shall deny any such applica-
tion, the commissioner or non-profit-making agency which submitted such
application may, within thirty days of such denial, appeal such denial
to the commissioner of general services who shall review all materials
submitted to the state procurement council with respect to such applica-
tion and who may request such further information or material as is
deemed necessary. Within sixty days of receipt of all information or
materials deemed necessary, the commissioner shall render a written
final decision on the application which shall be binding upon the appli-
cant and upon the state procurement council.
c. The list maintained by the office of general services pursuant to
paragraph a of this subdivision shall be revised as necessary to reflect
the additions and deletions of commodities and services approved by the
state procurement council.
4. Priority accorded preferred sources. Except as provided in the New
York state printing and public documents law, priority among preferred
sources shall be accorded as follows:
a. (i) When commodities are available, in the form, function and util-
ity required by a state agency, public authority, commission, public
benefit corporation or political subdivision, said commodities must be
purchased first from [the correctional industries program of the depart-
ment of corrections and community supervision] APPROVED CHARITABLE NON-
PROFIT-MAKING AGENCIES FOR THE BLIND;
(ii) When commodities are available, in the form, function and utility
required by, a state agency or political subdivision or public benefit
corporation having their own purchasing agency, and such commodities are
not available pursuant to subparagraph (i) of this paragraph, said
commodities shall then be purchased from [approved charitable non-pro-
fit-making agencies for the blind] A QUALIFIED NON-PROFIT-MAKING AGENCY
FOR OTHER SEVERELY DISABLED PERSONS, A QUALIFIED SPECIAL EMPLOYMENT
PROGRAM FOR MENTALLY ILL PERSONS, OR A QUALIFIED VETERANS' WORKSHOP;
[(iii) When commodities are available, in the form, function and util-
ity required by, a state agency or political subdivision or public bene-
fit corporation having their own purchasing agency, and such commodities
are not available pursuant to subparagraphs (i) and (ii) of this para-
graph, said commodities shall then be purchased from a qualified non-
profit-making agency for other severely disabled persons, a qualified
special employment program for mentally ill persons, or a qualified
veterans' workshop;]
b. When services are available, in the form, function and utility
required by, a state agency or political subdivision or public benefit
corporation having their own purchasing agency, equal priority shall be
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accorded the services rendered and offered for sale by qualified non-
profit-making agencies for the blind and those for the other severely
disabled, by qualified special employment programs for mentally ill
persons and by qualified veterans' workshops. In the case of services:
(i) state agencies or political subdivisions or public benefit corpo-
rations having their own purchasing agency shall make reasonable efforts
to provide a notification describing their requirements to those
preferred sources, or to the facilitating entity identified in paragraph
e of subdivision [six] FIVE of this section, which provide the required
services as indicated on the official public list maintained by the
office of general services pursuant to subdivision three of this
section;
(ii) if, within ten days of the notification required by subparagraph
(i) of this paragraph, one or more preferred sources or facilitating
entities identified in paragraph e of subdivision [six] FIVE of this
section submit a notice of intent to provide the service in the form,
function and utility required, said service shall be purchased in
accordance with this section. If more than one preferred source or
facilitating entity identified in paragraph e of subdivision [six] FIVE
of this section submits notification of intent and meets the require-
ments, costs shall be the determining factor for purchase among the
preferred sources;
(iii) if, within ten days of the notification required by subparagraph
(i) of this paragraph, no preferred source or facilitating entity iden-
tified in paragraph e of subdivision [six] FIVE of this section indi-
cates intent to provide the service, then the service shall be procured
in accordance with section one hundred sixty-three of this article. If,
after such period, a preferred source elects to bid on the service,
award shall be made in accordance with section one hundred sixty-three
of this article or as otherwise provided by law.
c. For the purposes of commodities and services produced by special
employment programs operated by facilities approved or operated by the
office of mental health, facilities within the office of mental health
shall be exempt from the requirements of subparagraph (i) of paragraph a
of this subdivision. When such requirements of the office of mental
health cannot be met pursuant to subparagraph (ii) [or (iii)] of para-
graph a of this subdivision, or paragraph b of this subdivision, the
office of mental health may purchase commodities and services which are
competitive in price and comparable in quality to those which could
otherwise be obtained in accordance with this article, from special
employment programs operated by facilities within the office of mental
health or other programs approved by the office of mental health.
5. [Prices charged by the department of corrections and community
supervision. The prices to be charged for commodities produced by the
correctional industries program of the department of corrections and
community supervision shall be established by the commissioner of
corrections and community supervision in accordance with section one
hundred eighty-six of the correction law.
a. The prices established by the commissioner of corrections and
community supervision shall be based upon costs as determined pursuant
to this subdivision, but shall not exceed a reasonable fair market price
determined at or within ninety days before the time of sale. Fair market
price as used herein means the price at which a vendor of the same or
similar product or service who is regularly engaged in the business of
selling such product or service offers to sell such product or service
under similar terms in the same market. Costs shall be determined in
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accordance with an agreement between the commissioner of corrections and
community supervision and the director of the budget.
b. A purchaser of any such product or service may, at any time prior
to or within thirty days of the time of sale, appeal the purchase price
in accordance with section one hundred eighty-six of the correction law,
on the basis that it unreasonably exceeds fair market price. Such an
appeal shall be decided by a majority vote of a three-member price
review board consisting of the director of the budget, the commissioner
of corrections and community supervision and the commissioner or their
representatives. The decision of the review board shall be final.
6.] Prices charged by agencies for the blind, other severely disabled
and veterans' workshops, AND THE DEPARTMENT OF CORRECTIONS AND COMMUNITY
SUPERVISION.
a. [Except with respect to the correctional industries program of the
department of corrections and community supervision, it] IT shall be the
duty of the commissioner to determine, and from time to time review, the
prices of all commodities and to approve the price of all services
provided by THE DEPARTMENT OF CORRECTIONS AND COMMUNITY SUPERVISION AND
preferred sources as specified in this section offered to state agen-
cies, political subdivisions or public benefit corporations having their
own purchasing office.
b. In determining and revising the prices of such commodities or
services, consideration shall be given to the reasonable costs of labor,
materials and overhead necessarily incurred by such preferred sources
under efficient methods of procurement, production, performance and
administration; however, the prices of such products and services shall
be as close to prevailing market price as practicable, but in no event
greater than fifteen percent above[,] the prevailing market prices among
responsive offerors for the same or equivalent commodities or services.
c. Such qualified charitable non-profit-making agencies for the blind
and other severely disabled may make purchases of materials, equipment
or supplies, except printed material, from centralized contracts for
commodities in accordance with the conditions set by the office of
general services; provided that the qualified charitable non-profit-mak-
ing agency for the blind or other severely disabled shall accept sole
responsibility for any payment due the vendor.
d. Such qualified charitable non-profit-making agencies for the blind
and other severely disabled may make purchases of materials, equipment
and supplies directly from the correctional industries program adminis-
tered by the commissioner of corrections and community supervision,
subject to such rules as may be established from time to time pursuant
to the correction law; provided that the qualified charitable non-pro-
fit-making agency for the blind or other severely disabled shall accept
sole responsibility for any payment due the department of corrections
and community supervision.
e. The commissioner of the office of children and family services
shall appoint the New York state commission for the blind, or other
non-profit-making agency, other than the agency representing the other
severely disabled, to facilitate the distribution of orders among quali-
fied non-profit-making charitable agencies for the blind. The state
commissioner of education shall appoint a non-profit-making agency,
other than the agency representing the blind, to facilitate the distrib-
ution of orders among qualified non-profit-making charitable agencies
for the other severely disabled and the veterans' workshops. The state
commissioner of mental health shall facilitate the distribution of
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orders among qualified special employment programs operated or approved
by the office of mental health serving mentally ill persons.
f. The commissioner may request the state comptroller to conduct
audits and examinations to be made of all records, books and data of any
agency for the blind or the other severely disabled, any special employ-
ment program for mentally ill persons or any veterans' workshops quali-
fied under this section to determine the costs of manufacture or the
rendering of services and the manner and efficiency of production and
administration of such agency or special employment program or veterans'
workshop with relation to any product or services purchased by a state
agency or political subdivision or public benefit corporation and to
furnish the results of such audit and examination to the commissioner
for such action as he or she may deem appropriate under this section.
[7.] 6. Partnering with preferred sources. The commissioner of the
appropriate appointing agency as identified in paragraph e of subdivi-
sion [six] FIVE of this section, shall conduct one or more pilot studies
whereby a private vendor may be accorded preferred source status for
purposes of this section. The pilot studies shall seek to ascertain the
benefits of partnerships between private industry and those entities
accorded preferred source status as specified in this section. Preferred
source status under a partnering arrangement may only be accorded when a
proposal to a soliciting agency for commodities or services includes a
binding agreement with one or more of the entities accorded preferred
source status under this section. The binding agreement shall provide
that:
(i) The preferred source shall perform the majority of the work neces-
sary to such offering, and
(ii) The partnering proposal includes bona fide long term employment
opportunities for persons who could otherwise be new clients of an enti-
ty previously accorded preferred source status herein, and
(iii) The partnering proposal offers the solicited services or commod-
ities at a price less than the price that otherwise would be charged by
a preferred source.
[8.] 7. a. The commissioner of the appropriate appointing agency shall
report by December thirty-first, two thousand four, to the governor, the
chairperson of the senate finance committee, the chairperson of the
assembly ways and means committee and the director of the budget, the
results and findings of each pilot study conducted, pursuant to subdivi-
sion [seven] SIX of this section, and include recommendations for
improving partnering with preferred sources.
b. The council shall report to the governor, legislative fiscal
committees and the director of the budget by December thirty-first,
nineteen hundred ninety-five and thereafter annually, a separate list
concerning the denial of any application made pursuant to paragraph (b)
of subdivision three of this section, the reasons for such denial,
whether such denial was appealed to the commissioner, and the final
decision by the commissioner on such application.
[9.] 8. The provisions of this section shall supersede inconsistent
provisions of any general, special or local law, or the provisions of
any charter.
§ 2. Subparagraph 9 of paragraph a of subdivision 3 of section 139-j
of the state finance law, as amended by chapter 265 of the laws of 2013,
is amended to read as follows:
(9) Any communications relating to a governmental procurement made
under section one hundred sixty-two of the state finance law undertaken
by (i) the non-profit-making agencies appointed pursuant to paragraph e
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of subdivision [six] FIVE of section one hundred sixty-two of the state
finance law by the commissioner of the office of children and family
services, the commission for the blind, or the commissioner of educa-
tion, and (ii) the qualified charitable non-profit-making agencies for
the blind, and qualified charitable non-profit-making agencies for other
severely disabled persons as identified in subdivision two of section
one hundred sixty-two of this chapter; provided, however, that any
communications which attempt to influence the issuance or terms of the
specifications that serve as the basis for bid documents, requests for
proposals, invitations for bids, or solicitations of proposals, or any
other method for soliciting a response from offerers intending to result
in a procurement contract with a state agency, the state legislature,
the unified court system, a municipal agency or local legislative body
shall not be exempt from the provisions of this paragraph;
§ 3. Subparagraph (G) of the second undesignated paragraph of subdivi-
sion (c) of section 1-c of the legislative law, as amended by chapter
265 of the laws of 2013, is amended to read as follows:
(G) Any activity relating to governmental procurements made under
section one hundred sixty-two of the state finance law undertaken by (i)
the non-profit-making agencies appointed pursuant to paragraph e of
subdivision [six] FIVE of section one hundred sixty-two of the state
finance law by the commissioner of the office of children and family
services, the commission for the blind, or the commissioner of educa-
tion, and (ii) the qualified charitable non-profit-making agencies for
the blind, and qualified charitable non-profit-making agencies for other
severely disabled persons as identified in subdivision two of section
one hundred sixty-two of the state finance law; provided, however, that
any attempt to influence the issuance or terms of the specifications
that serve as the basis for bid documents, requests for proposals, invi-
tations for bids, or solicitations of proposals, or any other method for
soliciting a response from offerers intending to result in a procurement
contract with a state agency, the state legislature, the unified court
system, a municipal agency or local legislative body shall not be exempt
from the definition of "lobbying" or "lobbying activities" under this
subparagraph;
§ 4. Subdivision 5 of section 362 of chapter 83 of the laws of 1995
amending the state finance law and other laws relating to bonds, notes
and revenues, as amended by section 1 of part F of chapter 57 of the
laws of 2016, is amended to read as follows:
5. Sections thirty-one through forty-two of this act shall take effect
on the thirtieth day after it shall have become a law and shall be
deemed to have been in full force and effect on and after April 1, 1995;
provided that section 163 of the state finance law, as added by section
thirty-three of this act shall remain in full force and effect until
June 30, [2021] 2026 at which time it shall expire and be deemed
repealed. Contracts executed prior to the expiration of such section 163
shall remain in full force and effect until the expiration of any such
contract notwithstanding the expiration of certain provisions of this
act.
§ 5. This act shall take effect immediately; provided, however, that
the amendments to subparagraph 9 of paragraph a of subdivision 3 of
section 139-j of the state finance law made by section two of this act
shall not affect the repeal of such section and shall be deemed to be
repealed therewith.