S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2245--A
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 15, 2025
                                ___________
 
 Introduced  by M. of A. BRAUNSTEIN, SEAWRIGHT, TAPIA, BICHOTTE HERMELYN,
   WEPRIN -- read once and referred to  the  Committee  on  Insurance  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee
 
 AN ACT to amend the insurance law, in relation to establishing  the  New
   York  small  contractor relief act; to amend the workers' compensation
   law, in relation to the payment of certain benefits; provides for  the
   repeal  of  certain  provisions  of  law  upon expiration thereof; and
   making an appropriation therefor
 
   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 small contractor relief act".
   § 2. The legislature hereby declares that the market for insurance for
 small construction contractors and certified  minority  and  women-owned
 construction  contractors  has  been  challenged  both by high insurance
 rates and a lack of market capacity.  These  challenges  are  acute  for
 small   construction   contractors,   and   minority   and   women-owned
 construction contractors working  for  public  owners.  This  act  shall
 provide  for  a private market insurance solution for small construction
 contractors,  and  minority  and  women-owned  construction  contractors
 through the creation of a captive insurance company.
   § 3. The insurance law is amended by adding a new article 70-A to read
 as follows:
                               ARTICLE 70-A
                   NEW YORK SMALL CONTRACTOR RELIEF ACT
 SECTION 7013. DEFINITIONS.
         7014. NEW YORK SMALL CONTRACTOR CAPTIVE INSURANCE COMPANY.
         7015. REINSURANCE AND RETROCESSION REINSURANCE.
         7016. NO REFUSAL.
         7017. RISK MANAGEMENT PROGRAM.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04020-02-5
              

 A. 2245--A                          2
 
         7018. PREVAILING WAGE REQUIREMENT.
   §  7013.  DEFINITIONS.  FOR THE PURPOSE OF THIS ARTICLE, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "LIABILITY INSURANCE" SHALL MEAN PERSONAL INJURY LIABILITY  INSUR-
 ANCE  AND PROPERTY DAMAGE LIABILITY INSURANCE, AS SUCH TERMS ARE DEFINED
 IN PARAGRAPHS THIRTEEN AND FOURTEEN OF SUBSECTION  (A)  OF  SECTION  ONE
 THOUSAND  ONE  HUNDRED  THIRTEEN  OF THIS CHAPTER, AND SHALL INCLUDE ANY
 TYPE OF INSURANCE DEEMED BY THE SUPERINTENDENT OF FINANCIAL SERVICES  TO
 BE  SUBSTANTIALLY  SIMILAR  THERETO PURSUANT TO PARAGRAPH THIRTY-FOUR OF
 SUBSECTION (A) OF SUCH SECTION.
   (B) "SMALL CONSTRUCTION CONTRACTOR" SHALL MEAN  ANY  CONTRACTOR  WHICH
 (I) IS RESIDENT IN THIS STATE; (II) IS INDEPENDENTLY OWNED AND OPERATED;
 (III) IS EXCLUSIVELY ENGAGED IN CONSTRUCTION CONTRACTING OR SUBCONTRACT-
 ING;  (IV)  HAD LESS THAN FIVE MILLION DOLLARS IN GROSS REVENUES FOR THE
 CALENDAR YEAR PRIOR TO AN APPLICATION FOR INSURANCE BEING FILED PURSUANT
 TO THE TERMS OF THIS ARTICLE, OR IS A CERTIFIED MINORITY OR  WOMEN-OWNED
 BUSINESS; AND (V) PAYS THE PREVAILING WAGE.
   (C)  "PREVAILING  WAGE"  SHALL MEAN THE RATE OF WAGES AND SUPPLEMENTAL
 BENEFITS PAID IN THE LOCALITY TO WORKERS IN THE SAME TRADE OR OCCUPATION
 AND ANNUALLY DETERMINED BY THE COMMISSIONER OF LABOR OR  COMPTROLLER  IN
 ACCORDANCE  WITH  THE  PROVISIONS  OF  SECTION TWO HUNDRED TWENTY OF THE
 LABOR LAW.
   § 7014. NEW YORK SMALL CONTRACTOR CAPTIVE  INSURANCE  COMPANY.  (A)  A
 CAPTIVE  INSURANCE  COMPANY  ORGANIZED PURSUANT TO THIS ARTICLE SHALL BE
 FORMED AND REGULATED PURSUANT TO THE PROVISIONS OF  ARTICLE  SEVENTY  OF
 THIS  CHAPTER.  SUCH  ENTITY  MAY BE A CORPORATION, ASSOCIATION, A JOINT
 STOCK COMPANY OR ASSOCIATION, OR AN AGGREGATION OR PARTNERSHIP  PURSUANT
 TO THE LAWS OF THE STATE OF NEW YORK.
   (B)  A  CAPTIVE  INSURANCE  COMPANY  MAY BE ORGANIZED PURSUANT TO THIS
 ARTICLE FOR THE SOLE PURPOSE OF PROVIDING LIABILITY INSURANCE AS DEFINED
 IN SUBSECTION (A) OF SECTION SEVEN THOUSAND THIRTEEN OF THIS ARTICLE  TO
 SMALL  CONSTRUCTION  CONTRACTORS,  AS THAT TERM IS DEFINED IN SUBSECTION
 (A) OF SECTION SEVEN THOUSAND THIRTEEN OF THIS ARTICLE.
   § 7015. REINSURANCE AND RETROCESSION REINSURANCE. A CAPTIVE  INSURANCE
 COMPANY  ORGANIZED  PURSUANT  TO  THIS  ARTICLE  SHALL  BE AUTHORIZED TO
 PURCHASE, AND THE NEW YORK STATE INSURANCE FUND (HEREINAFTER THE "FUND")
 SHALL BE AUTHORIZED AND DIRECTED, TO PROVIDE REINSURANCE  AND  RETROCES-
 SION  REINSURANCE  FOR SUCH CAPTIVE INSURANCE COMPANY, ON EITHER A QUOTA
 SHARE ARRANGEMENT OR FACULTATIVE ARRANGEMENT  (HEREAFTER  "REINSURANCE")
 AT  A  RATE  TO  BE  DETERMINED BY THE BOARD OF THE FUND. THE FUND SHALL
 PROVIDE SUCH REINSURANCE ON AN APPLICATION FOR SUCH COVERAGE UNLESS,  IN
 THE  OPINION  OF  THE  EXECUTIVE DIRECTOR, PROVIDING SUCH COVERAGE ON AN
 APPLICATION WILL IMPERIL THE FINANCIAL SAFETY AND SOUNDNESS OF THE FUND.
 THE EXECUTIVE DIRECTOR OF THE FUND SHALL PROVIDE,  IN  WRITING,  TO  THE
 BOARD  OF  THE  FUND  AND  THE  SUPERINTENDENT NOT LESS THAN QUARTERLY A
 REPORT ON ALL SUCH APPLICATIONS FOR COVERAGE THAT ARE  DENIED,  TOGETHER
 WITH THE GROUNDS FOR AND AN ANALYSIS OF THE BASIS FOR SUCH DENIAL.
   §  7016.  NO  REFUSAL.  A  SMALL  CONTRACTOR CAPTIVE INSURANCE COMPANY
 ORGANIZED PURSUANT TO THIS ARTICLE SHALL NOT REFUSE TO ISSUE,  RENEW  OR
 CANCEL  A  POLICY  OF  ANY QUALIFIED SMALL CONSTRUCTION CONTRACTOR BASED
 UPON GEOGRAPHIC LOCATION OR LINE OF BUSINESS ENGAGED IN BY SUCH CONTRAC-
 TOR.
   § 7017. RISK MANAGEMENT PROGRAM. A CAPTIVE INSURANCE COMPANY ORGANIZED
 PURSUANT TO THIS ARTICLE SHALL ESTABLISH AND PROMOTE A  RISK  MANAGEMENT
 PROGRAM AMONG ITS MEMBERS TO IDENTIFY AND REDUCE RISKS BY IMPLEMENTATION
 OF  LOSS  CONTROL, SAFETY PROGRAMS AND OTHER METHODS OF RISK MANAGEMENT,
 A. 2245--A                          3
 
 AND ANY SMALL CONSTRUCTION CONTRACTOR ACCEPTED FOR  COVERAGE  FROM  SUCH
 INSURER  SHALL  BE  RESPONSIBLE  FOR  ADOPTING  AND  FOLLOWING SUCH RISK
 MANAGEMENT PROGRAM.
   §  7018.  PREVAILING WAGE REQUIREMENT. A SMALL CONSTRUCTION CONTRACTOR
 SEEKING TO OBTAIN LIABILITY INSURANCE FROM A  SMALL  CONTRACTOR  CAPTIVE
 INSURANCE COMPANY AUTHORIZED UNDER THIS ARTICLE SHALL ESTABLISH THAT THE
 SMALL  CONSTRUCTION  CONTRACTOR'S  ENTIRE  WORKFORCE  IS  BEING PAID THE
 PREVAILING WAGE, OR SUBJECT TO  COLLECTIVE  BARGAINING  AGREEMENT  OR  A
 PROJECT  LABOR AGREEMENT.   THE SMALL CONSTRUCTION CONTRACTOR'S APPLICA-
 TION FOR INSURANCE SHALL DOCUMENT AND CERTIFY THAT THE  APPLICANT  MEETS
 THIS  REQUIREMENT  AND  WILL  MEET THIS REQUIREMENT FOR ALL CONSTRUCTION
 WORK ON ALL PROJECTS COVERED BY THE LIABILITY INSURANCE OBTAINED  PURSU-
 ANT TO THIS ARTICLE AS A PRECONDITION TO QUALIFYING FOR LIABILITY INSUR-
 ANCE  ISSUED  HEREUNDER. SUCH APPLICATION SHALL ALSO BE SUBMITTED TO THE
 COMMISSIONER OF LABOR WHO SHALL  NOTIFY  THE  SMALL  CONTRACTOR  CAPTIVE
 INSURANCE  COMPANY OF RECEIPT PRIOR TO APPROVAL OF SUCH APPLICATION.  AS
 A CONDITION OF APPROVAL, AT LEAST TEN  DAYS  PRIOR  TO  COMMENCEMENT  OF
 WORK,  THE  SMALL  CONSTRUCTION  CONTRACTOR  SHALL NOTIFY AND UPDATE THE
 CAPTIVE INSURANCE  COMPANY  OF  ANY  LOCATION  WHERE  IT  IS  PERFORMING
 CONSTRUCTION  COVERED  BY  A  POLICY ASSOCIATED WITH THIS ARTICLE.  SUCH
 LOCATIONS SHALL BE PUBLICLY POSTED ONLINE WITHIN  TWO  DAYS  OF  RECEIPT
 FROM  THE  SMALL  CONSTRUCTION  CONTRACTOR AND MAINTAINED BY THE CAPTIVE
 INSURANCE COMPANY.  ALL SUCH WORK PERFORMED BY  THE  SMALL  CONSTRUCTION
 CONTRACTOR  SHALL  BE  SUBJECT TO THE PROVISIONS OF ARTICLE EIGHT OF THE
 LABOR LAW INCLUDING, BUT NOT LIMITED TO, SECTION TWO HUNDRED TWENTY  AND
 TWO  HUNDRED  TWENTY-I  OF  SUCH  ARTICLE.    IN  THE  EVENT  THE  SMALL
 CONSTRUCTION CONTRACTOR IS DETERMINED BY THE FISCAL OFFICER, AS  DEFINED
 IN  SECTION  TWO  HUNDRED TWENTY OF THE LABOR LAW, TO BE IN VIOLATION OF
 ARTICLE EIGHT OF THE LABOR LAW, IN  ADDITION  TO  ANY  PENALTIES  TO  BE
 ENFORCED  PURSUANT  TO SUCH ARTICLE, THE CAPTIVE INSURANCE COMPANY SHALL
 REVOKE SUCH CONTRACTOR'S POLICY PURSUANT TO THIS ARTICLE  AND  ASSESS  A
 PENALTY  EQUAL  TO  THE  COSTS INCURRED IN PROVIDING LIABILITY INSURANCE
 COVERAGE SINCE ITS INITIAL APPLICATION WAS APPROVED.
   § 4. Paragraph 1 of subsection (e) of section 7002  of  the  insurance
 law,  as  amended by chapter 193 of the laws of 2022, is amended to read
 as follows:
   (1) whose net worth exceeds one hundred million  dollars,  EXCEPT  FOR
 ANY  SMALL  CONTRACTOR  CAPTIVE INSURANCE COMPANY AUTHORIZED PURSUANT TO
 SECTION SEVEN THOUSAND FOURTEEN OF THIS CHAPTER;
   § 5. Section 76 of the workers' compensation law is amended by  adding
 a new subdivision 4-a to read as follows:
   4-A.  THE PURPOSES OF THE STATE INSURANCE FUND CREATED IN THIS SECTION
 ARE ENLARGED TO PROVIDE FOR THE INSURANCE BY THE STATE INSURANCE FUND OF
 THE PAYMENT OF THE BENEFITS REQUIRED BY ARTICLE SEVENTY-A OF THE  INSUR-
 ANCE LAW.
   §  6.  Not  less than six months before the expiration date of article
 70-A of the insurance law, as added by this chapter, the  superintendent
 of  financial  services  shall issue to the governor, the speaker of the
 assembly and the temporary president of the senate, and  the  chairs  of
 the  insurance  and  labor  committees  of  each  house, a report on the
 performance of the New York small contractor relief act and  its  impact
 upon the small construction contractor sector. If such act is to expire,
 it shall not impede such captive insurance companies created under arti-
 cle  70-A  of  the  insurance  law  to  continue  to  operate  as if the
 provisions of such article were still in full force and effect, assuming
 A. 2245--A                          4
 
 that such companies are otherwise viable pursuant to the  provisions  of
 article 70 of the insurance law.
   §  7.  The sum of fifty million dollars ($50,000,000) is hereby appro-
 priated for the support of up to two captives under this act. Such funds
 may be used for the purpose of providing  paid-in  capital  and  initial
 surplus contributions for captives organized pursuant to article 70-A of
 the  insurance  law,  such  amounts  not  to  exceed twenty-five million
 dollars ($25,000,000) for any one captive insurer so organized. The  New
 York  state  insurance  fund  is authorized, upon action of its board of
 directors, to invest other funds as may  be  appropriate  in  a  captive
 organized pursuant to article 70-A of the insurance law.
   § 8. This act shall take effect on the one hundred eightieth day after
 it  shall have become a law and shall expire and be deemed repealed five
 years after such effective date.