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S08314 Summary:

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S08314 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8314
 
                    IN SENATE
 
                                      June 22, 2010
                                       ___________
 
        Introduced  by  Sen. HASSELL-THOMPSON -- (at request of the Governor) --
          read twice and ordered printed, and when printed to  be  committed  to
          the Committee on Rules
 
        AN ACT to amend the executive law and the state finance law, in relation
          to  expanding  opportunities  for  women  and  minority-owned business
          enterprises and increasing competition and diversity  in  procurements

          by  the  state and its public authorities; and to amend chapter 261 of
          the laws of 1988 amending the state finance law and other laws  relat-
          ing  to  the  New York state infrastructure trust fund, in relation to
          the effectiveness of article 15-A of the executive law
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Legislative findings. New York state ("the state") declares
     2  that  it  is the public policy of the state to promote and encourage the
     3  continuing economic development of minority and women-owned  businesses,
     4  that  minority  and  women-owned  businesses  participate  in  the state
     5  procurement process as both prime  contractors  and  subcontractors  and
     6  that  the  state  procurement  process  operate and award contracts in a

     7  manner that is free from discrimination and bias  against  minority  and
     8  women-owned  businesses  that  are  ready, willing and able to engage in
     9  business with the state.
    10    The state first adopted its Minority and Women-Owned  Business  Enter-
    11  prise  Program in 1988 to address the significant underrepresentation of
    12  minority and women-owned  businesses in state contracts,  despite  rela-
    13  tively  large  populations of minorities and women throughout the state.
    14  The program,  chaptered  within  article  15-A  of  the  executive  law,
    15  supported the state's commitment to promote equal opportunity in employ-
    16  ment  for all persons, without discrimination on account of race, creed,
    17  color, national origin, sex,  age,  disability  or  marital  status,  to
    18  promote  equality of economic opportunity for minority group members and

    19  women, business enterprises owned by  them,  and  to  eradicate  through
    20  effective  programs  the barriers that have unreasonably impaired access
    21  by minority and women-owned business enterprises  to  state  contracting
    22  opportunities.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD17551-10-0
        S. 8314                             2
 
     1    In 2006, a disparity study was commissioned by the empire state devel-
     2  opment corporation, pursuant to executive law section 312-a, to evaluate
     3  whether  minority  and  women-owned  businesses in the state contracting
     4  marketplace had  full  and  fair  opportunities  to  compete  for  prime

     5  contracts and associated subcontracts. Published on April 29, 2010, "the
     6  State of Minority and Women-Owned Business Enterprise: Evidence From New
     7  York"  ("the  2010  disparity  study"),  found strong evidence of large,
     8  adverse, and statistically significant disparities between minority  and
     9  women participation in business enterprise activity in the state's rele-
    10  vant  market  area  and  the  actual current availability of those busi-
    11  nesses. The study further concluded that said disparities could  not  be
    12  explained  solely,  or  even mostly, by differences between minority and
    13  women-owned businesses and non-minority and women-owned  business  popu-
    14  lations in factors untainted by discrimination, and that the differences
    15  therefore  gave  rise to a strong inference of the presence of discrimi-
    16  nation. The findings of the study are hereby adopted by the legislature.

    17    The legislature further finds that the Assembly conducted hearings  on
    18  the efficiency and effectiveness of services to minority and women-owned
    19  businesses and on the effectiveness of article 15-A of the executive law
    20  in  Utica,  New  York on February 23, 2005, in New York City on March 3,
    21  2005, and in Syracuse, New York on October  25,  2005;  it  conducted  a
    22  hearing on the efforts by public authorities to attract and retain women
    23  and  minority-owned  businesses  in securing contracts for construction,
    24  goods, and services on June 11, 2002 in Albany, New York, and a  hearing
    25  on  access  to surety bonding on state contracts for small, minority and
    26  women-owned businesses on April 14, 2005 in New York City.   The  Senate
    27  conducted  hearings  on  the efficiency and effectiveness of services to
    28  minority and women-owned business and on the  effectiveness  of  article

    29  15-A  of  the  executive  law at the Legislative Office Building hearing
    30  rooms in Albany, New York on February 12, 2009, on Minority  and  Women-
    31  Owned   Business   Enterprise   participation  opportunities  in  public
    32  finance/asset management, and on March 3, 2010 on the reform of  article
    33  15-A of the executive law.
    34    At  these  hearings,  testimony was received that supplemented and was
    35  consistent with the anecdotal evidence set forth in the  2010  disparity
    36  study  that  women  and  minority-owned  businesses participate in state
    37  procurements at significantly lower percentages than their  numbers  and
    38  expertise  would  indicate  would  be  expected if no discrimination had
    39  existed and  provided  anecdotal  evidence  of  continuing  patterns  of
    40  discrimination.
    41    The  legislature  further finds that in order to redress the discrimi-

    42  nation documented by the study it is necessary to  implement  a  program
    43  that  identifies  businesses  owned  by minorities and by women and that
    44  actively promotes the participation of  such  businesses  in  the  state
    45  procurement  process.    The legislature further finds that it is in the
    46  best interests of the economic development of the  state  to  enact  the
    47  2010  Business  Diversification  Act  to  redress discrimination against
    48  minority and women-owned business enterprises in the state marketplace.
    49    § 1-a. Short title. This act shall be known and may be  cited  as  the
    50  "2010 Business Diversification Act".
    51    §  2.  Subdivisions  7  and 15 of section 310 of the executive law, as
    52  added by chapter 261 of the laws of  1988,  are  amended  and  five  new
    53  subdivisions 18, 19, 20, 21 and 22 are added to read as follows:

    54    7.  "Minority-owned  business enterprise" shall mean a business enter-
    55  prise, including a sole proprietorship, partnership or corporation  that
    56  is:
        S. 8314                             3
 
     1    (a)  at  least  fifty-one  percent owned by one or more minority group
     2  members;
     3    (b)  an  enterprise in which such minority ownership is real, substan-
     4  tial and continuing;
     5    (c) an enterprise in which such minority ownership has  and  exercises
     6  the authority to control independently the day-to-day business decisions
     7  of the enterprise; [and]
     8    (d)  an  enterprise  authorized to do business in this state and inde-
     9  pendently owned and operated[.];
    10    (e) an enterprise owned by an individual or individuals, whose  owner-

    11  ship,  control  and  operation are relied upon for certification, with a
    12  personal net worth that does not exceed three million five hundred thou-
    13  sand dollars, as adjusted annually on the first of January for inflation
    14  according to the consumer price index of the previous year; and
    15    (f) an enterprise that is a small  business  pursuant  to  subdivision
    16  twenty of this section.
    17    15.  "Women-owned  business  enterprise"  shall mean a business enter-
    18  prise, including a sole proprietorship, partnership or corporation  that
    19  is:
    20    (a)  at  least  fifty-one  percent  owned by one or more United States
    21  citizens or permanent resident aliens who are women;
    22    (b) an enterprise in which the ownership interest  of  such  women  is
    23  real, substantial and continuing;

    24    (c)  an enterprise in which such women ownership has and exercises the
    25  authority to control independently the day-to-day business decisions  of
    26  the enterprise; [and]
    27    (d)  an  enterprise  authorized to do business in this state and inde-
    28  pendently owned and operated[.];
    29    (e) an enterprise owned by an individual or individuals, whose  owner-
    30  ship,  control  and  operation are relied upon for certification, with a
    31  personal net worth that does not exceed three million five hundred thou-
    32  sand dollars, as adjusted annually on the first of January for inflation
    33  according to the consumer price index of the previous year; and
    34    (f) an enterprise that is a small  business  pursuant  to  subdivision
    35  twenty of this section.

    36    A  firm  owned  by  a minority group member who is also a woman may be
    37  certified as a minority-owned business enterprise, a  women-owned  busi-
    38  ness  enterprise, or both, and may be counted towards either a minority-
    39  owned business enterprise goal  or  a  women-owned  business  enterprise
    40  goal, in regard to any contract or any goal, set by an agency or author-
    41  ity,  but such participation may not be counted towards both such goals.
    42  Such an enterprise's participation in a  contract  may  not  be  divided
    43  between  the minority-owned business enterprise goal and the women-owned
    44  business enterprise goal.
    45    18. "Lessee" shall mean an individual, a business enterprise,  includ-
    46  ing  a sole proprietorship, a partnership, a corporation, a not-for-pro-

    47  fit corporation, or any other party to a lease with a  state  agency  as
    48  defined  in  subdivision  eleven  of  this  section,  or a respondent in
    49  conjunction with the award of such a lease or a proposed lessee  with  a
    50  state agency as defined in subdivision eleven of this section.
    51    19.  "Personal  net worth" shall mean the aggregate adjusted net value
    52  of the assets of an individual remaining  after  total  liabilities  are
    53  deducted.  Personal  net worth includes the individual's share of assets
    54  held jointly with said individual's spouse  and  does  not  include  the
    55  individual's  ownership  interest  in  the certified minority and women-
    56  owned business enterprise, the individual's equity in his or her primary

        S. 8314                             4
 
     1  residence, or up to five hundred thousand dollars of  the  present  cash
     2  value  of any qualified retirement savings plan or individual retirement
     3  account held by the individual less any penalties for early withdrawal.
     4    20.  "Small  business" as used in this section, unless otherwise indi-
     5  cated, shall mean a business which has a significant  business  presence
     6  in  the  state, is independently owned and operated, not dominant in its
     7  field and employs, based on its industry, a certain number of persons as
     8  determined by the director, but not to exceed three hundred, taking into
     9  consideration factors which include, but are  not  limited  to,  federal
    10  small  business administration standards pursuant to 13 CFR part 121 and

    11  any amendments thereto.   The director  may  issue  regulations  on  the
    12  construction of the terms in this definition.
    13    21.  "The  2010  disparity  study"  shall refer to the disparity study
    14  commissioned by the empire state development  corporation,  pursuant  to
    15  section  three  hundred twelve-a of this article, and published on April
    16  twenty-nine, two thousand ten.
    17    22. "Diversity practices" shall mean the  contractor's  practices  and
    18  policies with respect to:
    19    (a)  utilizing certified minority and women-owned business enterprises
    20  in contracts awarded by a state agency or other public  corporation,  as
    21  subcontractors and suppliers; and
    22    (b)  entering  into  partnerships,  joint  ventures  or  other similar

    23  arrangements with certified minority  and  women-owned  business  enter-
    24  prises  as  defined in this article or other applicable statute or regu-
    25  lation governing an entity's  utilization  of  minority  or  women-owned
    26  business enterprises.
    27    §  3. The executive law is amended by adding a new section 4-a to read
    28  as follows:
    29    § 4-a. Chief diversity officer. A  chief  diversity  officer  for  the
    30  state  shall  be appointed by the governor and shall receive a salary to
    31  be fixed by the governor within the amount  appropriated  therefor.  The
    32  chief diversity officer's responsibilities shall include the following:
    33    1.  Advise and assist the governor in formulating policies relating to

    34  workforce diversity and minority and women's business enterprises;
    35    2. Work with the director of the  division  of  minority  and  women's
    36  business development to prepare an annual plan for ensuring full compli-
    37  ance  with  article fifteen-a of the executive law by state agencies and
    38  the use of diversity practices by such agencies;
    39    3. Advise the governor and the agencies regarding any measures  neces-
    40  sary  to  ensure  full compliance with article fifteen-a of this chapter
    41  and use of diversity practices by state public authorities;
    42    4. Serve as a member of  the  state  procurement  council  established
    43  under section one hundred sixty-one of the state finance law;
    44    5.  Serve  as  the  governor's liaison with organizations representing

    45  minority and women-owned business enterprises  and  other  organizations
    46  related to diversity in the state workforce and in state contracting;
    47    6.  Serve  as  the  governor's  liaison to the small business advisory
    48  council for issues related to the creation of a  diverse  workforce  and
    49  state  procurement  practices relating to minority and women-owned busi-
    50  ness enterprises;
    51    7. Review and consult with the director of minority and women's  busi-
    52  ness development regarding policies relating to minority and women-owned
    53  business enterprise contract specialists at state agencies; and
    54    8.  Engage  in  other  actions  assigned to him or her by the governor
    55  relating to diversity in hiring or promotion of the state workforce  and

        S. 8314                             5
 
     1  in encouraging diversity practices and compliance with article fifteen-a
     2  of this chapter in procurement.
     3    §  3-a.  Paragraph  a  of  subdivision  1  of section 161 of the state
     4  finance law, as added by chapter 83 of the laws of 1995, is  amended  to
     5  read as follows:
     6    a.  The state procurement council shall continuously strive to improve
     7  the state's procurement process.  Such council shall consist  of  [nine-
     8  teen] twenty members, including the commissioner, the state comptroller,
     9  the  director of the budget, the chief diversity officer and the commis-
    10  sioner of economic development, or  their  respective  designees;  seven
    11  members  who  shall be the heads of other large and small state agencies

    12  chosen by the governor, or their  respective  designees;  and  eight  at
    13  large  members  appointed  as  follows: three appointed by the temporary
    14  president of the senate, one of whom shall be a representative of  local
    15  government  and  one  of whom shall be a representative of private busi-
    16  ness; three appointed by the speaker of the assembly, one of whom  shall
    17  be  a  representative  of  local  government  and one of whom shall be a
    18  representative of private business; one appointed by the minority leader
    19  of the senate; and, one appointed by the minority leader of  the  assem-
    20  bly; and two non-voting observers appointed as follows: one appointed by
    21  the  temporary  president of the senate and one appointed by the speaker
    22  of the assembly. The non-voting observers shall be provided, contempora-
    23  neously, all documentation and materials  distributed  to  members.  The

    24  council  shall  be  chaired  by the commissioner and shall meet at least
    25  quarterly.
    26    § 4. Section 312-a of the executive law, as added by section 6 of part
    27  BB of chapter 59 of the laws of 2006, is amended to read as follows:
    28    §  312-a.  Study  of  minority  and  women-owned  business  enterprise
    29  programs.  1.  The  director of the division of minority and women-owned
    30  business development  in  the  department  of  economic  development  is
    31  authorized and directed to [commission] recommission a statewide dispar-
    32  ity  study regarding the participation of minority and women-owned busi-
    33  ness enterprises in state contracts since the [enactment]  amendment  of
    34  this  article  to  be delivered to the governor and legislature no later
    35  than February fifteenth,  two  thousand  sixteen.  The  study  shall  be

    36  prepared by an entity independent of the department and selected through
    37  a request for proposal process. The purpose of such study is:
    38    (a)  to  determine  whether there is a disparity between the number of
    39  qualified minority and women-owned businesses ready, willing and able to
    40  perform state contracts for commodities, services and construction,  and
    41  the  number  of  such  contractors  actually  engaged  to  perform  such
    42  contracts, and to determine what changes, if  any,  should  be  made  to
    43  state  policies affecting minority and women-owned business enterprises;
    44  and (b) to determine whether there is a disparity between the number  of
    45  qualified  minorities and women ready, willing and able, with respect to
    46  labor markets, qualifications and other relevant factors, to participate

    47  in contractor employment, management level bodies, including  boards  of
    48  directors,  and as senior executive officers within contracting entities
    49  and the number of such group members  actually  employed  or  affiliated
    50  with  state  contractors in the aforementioned capacities, and to deter-
    51  mine what changes, if any, should be made to  state  policies  affecting
    52  minority  and  women group populations with regard to state contractors'
    53  employment and appointment practices relative to diverse group  members.
    54  Such  study  shall  include,  but  not be limited to, an analysis of the
    55  [impact of court decisions regarding the use of quotas  and  set-asides]
    56  history  of  minority  and  women-owned business enterprise programs and

        S. 8314                             6
 
     1  their effectiveness as a means of securing and ensuring participation by
     2  minorities and women, and a disparity analysis by market area and region
     3  of the state.   Such study shall  distinguish  between  minority  males,
     4  minority females and non-minority females in the statistical analysis.
     5    2.  The  director of the division of minority and women-owned business
     6  development is directed to transmit the disparity study to the  governor
     7  and  the legislature not later than [eighteen months after the effective
     8  date of this subdivision] February fifteenth, two thousand sixteen,  and
     9  to  post the study on the website of the department of economic develop-
    10  ment.
    11    § 5. Section 313 of the executive law, as added by chapter 261 of  the

    12  laws  of  1988, paragraph (a) of subdivision 4 as amended by chapter 429
    13  of the laws of 2009, is amended to read as follows:
    14    § 313. Opportunities for  minority  and  women-owned  business  enter-
    15  prises.  1.  [The  director  shall promulgate rules and regulations that
    16  provide measures and procedures  to  ensure  that  certified  businesses
    17  shall  be  given  the  opportunity  for  meaningful participation in the
    18  performance of state contracts and to identify those state contracts for
    19  which certified businesses may best bid to  actively  and  affirmatively
    20  promote  and  assist  their  participation  in  the performance of state
    21  contracts so as to facilitate  the  award  of  a  fair  share  of  state
    22  contracts to such businesses. Such rules and regulations as they pertain

    23  to  any particular agency shall be developed after consultation with the
    24  contracting agency. Nothing in the provisions of this article  shall  be
    25  construed  to  limit the ability of any certified business to bid on any
    26  contract.
    27    2.] Goals and requirements for agencies and contractors.  Each  agency
    28  shall  structure  procurement  procedures for contracts made directly or
    29  indirectly to minority and women-owned business enterprises, in  accord-
    30  ance with the findings of the two thousand ten disparity study, consist-
    31  ent with the purposes of this article, to attempt to achieve the follow-
    32  ing results with regard to total annual statewide procurement:
    33    (a) construction industry for certified minority-owned business enter-

    34  prises: fourteen and thirty-four hundredths percent;
    35    (b)  construction  industry  for certified women-owned business enter-
    36  prises: eight and forty-one hundredths percent;
    37    (c) construction related professional services industry for  certified
    38  minority-owned  business enterprises: thirteen and twenty-one hundredths
    39  percent;
    40    (d) construction related professional services industry for  certified
    41  women-owned  business  enterprises:  eleven  and  thirty-two  hundredths
    42  percent;
    43    (e) non-construction related services industry for  certified  minori-
    44  ty-owned business enterprises: nineteen and sixty hundredths percent;
    45    (f)  non-construction  related  services industry for certified women-

    46  owned business enterprises: seventeen and forty-four hundredths percent;
    47    (g) commodities industry for certified minority-owned business  enter-
    48  prises: sixteen and eleven hundredths percent;
    49    (h)  commodities  industry  for  certified women-owned business enter-
    50  prises:  ten and ninety-three hundredths percent;
    51    (i) overall agency total dollar value  of  procurement  for  certified
    52  minority-owned  business enterprises: sixteen and fifty-three hundredths
    53  percent;
    54    (j) overall agency total dollar value  of  procurement  for  certified
    55  women-owned  business  enterprises:  twelve  and  thirty-nine hundredths
    56  percent; and
        S. 8314                             7
 

     1    (k) overall agency total dollar value  of  procurement  for  certified
     2  minority,  women-owned business enterprises: twenty-eight and ninety-two
     3  hundredths percent.
     4    1-a.  The  director  shall  ensure  that  each  state  agency has been
     5  provided with a copy of the two thousand ten disparity study.
     6    1-b. Each agency shall develop and adopt agency-specific  goals  based
     7  on the findings of the two thousand ten disparity study.
     8    2. The director shall promulgate rules and regulations pursuant to the
     9  goals  established in subdivision one of this section that provide meas-
    10  ures and procedures to ensure that certified  minority  and  women-owned
    11  businesses  shall  be given the opportunity for maximum feasible partic-

    12  ipation in the performance of state contracts and to assist in the agen-
    13  cy's identification of those state  contracts  for  which  minority  and
    14  women-owned  certified  businesses may best bid to actively and affirma-
    15  tively promote and assist their  participation  in  the  performance  of
    16  state  contracts  so  as  to  facilitate the agency's achievement of the
    17  maximum feasible portion of the goals for state contracts to such  busi-
    18  nesses.
    19    2-a.  The  director  shall  promulgate rules and regulations that will
    20  accomplish the following:
    21    (a) provide for the certification and decertification of minority  and
    22  women-owned business enterprises for all agencies through a single proc-
    23  ess that meets applicable requirements;

    24    (b) require that each contract solicitation document accompanying each
    25  solicitation  set  forth the expected degree of minority and women-owned
    26  business enterprise participation based, in part, on:
    27    (i) the potential subcontract opportunities  available  in  the  prime
    28  procurement contract; and
    29    (ii)  the  availability,  as  contained within the study, of certified
    30  minority and  women-owned business enterprises to respond  competitively
    31  to the potential subcontract opportunities;
    32    (c)  require  that  each  agency  provide  a current list of certified
    33  minority business enterprises to each prospective contractor;
    34    (d) allow a contractor that is a certified  minority-owned  or  women-

    35  owned  business  enterprise to use the work it performs to meet require-
    36  ments for use of certified minority-owned or women-owned business enter-
    37  prises as subcontractors;
    38    (e) provide for joint ventures, which a bidder may count toward  meet-
    39  ing its minority and women-owned business enterprise participation;
    40    (f)  consistent  with  subdivision  six  of  this section, provide for
    41  circumstances under  which  an  agency  may  waive  obligations  of  the
    42  contractor  relating  to  minority  and  women-owned business enterprise
    43  participation;
    44    (g) require that an agency verify that minority and women-owned  busi-
    45  ness  enterprises  listed in a successful bid are actually participating

    46  to the extent listed in the project for which the bid was submitted;
    47    (h) provide for the collection of  statistical  data  by  each  agency
    48  concerning  actual  minority and women-owned business enterprise partic-
    49  ipation; and
    50    (i) require each agency to consult the most  current  disparity  study
    51  when  calculating  agency-wide and contract specific participation goals
    52  pursuant to this article.
    53    3. Solely for the purpose of providing the opportunity for  meaningful
    54  participation  by  certified  businesses  in  the  performance  of state
    55  contracts as provided in this section,  state  contracts  shall  include
    56  leases  of  real property by a state agency to a lessee where: the terms

        S. 8314                             8
 
     1  of such leases provide for the  construction,  demolition,  replacement,
     2  major  repair or renovation of real property and improvements thereon by
     3  such lessee; and the cost of such construction, demolition, replacement,
     4  major  repair  or  renovation  of real property and improvements thereon
     5  shall exceed the sum of one hundred thousand  dollars.  Reports  to  the
     6  director pursuant to section three hundred fifteen of this article shall
     7  include activities with respect to all such state contracts. Contracting
     8  agencies  shall  include or require to be included with respect to state
     9  contracts for the acquisition,  construction,  demolition,  replacement,
    10  major  repair  or  renovation of real property and improvements thereon,

    11  such provisions as may be necessary to effectuate the provisions of this
    12  section in every bid specification and state  contract,  including,  but
    13  not  limited  to:  (a)  provisions  requiring contractors to make a good
    14  faith effort to solicit active participation by  enterprises  identified
    15  in  the  directory  of  certified businesses provided to the contracting
    16  agency by the office; (b) requiring the parties to agree as a  condition
    17  of entering into such contract, to be bound by the provisions of section
    18  three  hundred sixteen of this article; and (c) requiring the contractor
    19  to include the provisions set forth in paragraphs (a) and (b) [above] of
    20  this subdivision in every subcontract in a manner  that  the  provisions
    21  will  be  binding  upon each subcontractor as to work in connection with

    22  such contract. Provided, however, that no such provisions shall be bind-
    23  ing upon contractors or subcontractors in the performance of work or the
    24  provision of services that are unrelated, separate or distinct from  the
    25  state  contract  as  expressed by its terms, and nothing in this section
    26  shall authorize the director or any contracting  agency  to  impose  any
    27  requirement  on  a  contractor or subcontractor except with respect to a
    28  state contract.
    29    [3.] 4. In the implementation of this section, the contracting  agency
    30  shall  (a)  consult  the  findings  contained within the disparity study
    31  evidencing relevant industry specific availability  of  certified  busi-
    32  nesses;
    33    (b)  implement  a program that will enable the agency to evaluate each

    34  contract to determine the appropriateness of the goal pursuant to subdi-
    35  vision one of this section;
    36    (c) consider  where  practicable,  the  severability  of  construction
    37  projects and other bundled contracts; and
    38    (d)  consider  compliance  with  the  requirements  of any federal law
    39  concerning opportunities for minority and  women-owned  business  enter-
    40  prises  which  effectuates  the purpose of this section. The contracting
    41  agency shall determine whether the imposition of the requirements of any
    42  such law duplicate or conflict with the provisions hereof  and  if  such
    43  duplication  or  conflict exists, the contracting agency shall waive the
    44  applicability of this section to  the  extent  of  such  duplication  or
    45  conflict.

    46    [4.]  5. (a) Contracting agencies shall administer the rules and regu-
    47  lations promulgated by the director in a good faith  effort  to  [ensure
    48  compliance  with the provisions of this section] meet the maximum feasi-
    49  ble portion of the agency's goals adopted pursuant to this  article  and
    50  the  regulations  of  the  director.   Such rules and regulations: shall
    51  require a contractor to submit a utilization plan after bids are opened,
    52  when bids are required, but prior to the  award  of  a  state  contract;
    53  shall  require  the  contracting  agency  to review the utilization plan
    54  submitted by the contractor and to post the  utilization  plan  and  any
    55  waivers  of compliance issued pursuant to subdivision [five] six of this

    56  section on the website of the contracting  agency  within  a  reasonable
        S. 8314                             9
 
     1  period  of  time  as  established  by  the  director;  shall require the
     2  contracting agency to notify the contractor in writing within  a  period
     3  of  time  specified  by the director as to any deficiencies contained in
     4  the contractor's utilization plan; shall require remedy thereof within a
     5  period  of  time specified by the director; shall require the contractor
     6  to submit periodic compliance reports  relating  to  the  operation  and
     7  implementation  of  any  utilization plan; shall not allow any automatic
     8  waivers but shall allow a contractor to apply for  a  partial  or  total
     9  waiver of the minority and women-owned business enterprise participation

    10  requirements  pursuant  to subdivisions [five and] six and seven of this
    11  section; shall allow a contractor to file a complaint with the  director
    12  pursuant  to  subdivision  [seven]  eight of this section in the event a
    13  contracting agency has failed or refused to issue a waiver of the minor-
    14  ity and women-owned business enterprise  participation  requirements  or
    15  has  denied  such  request  for  a waiver; and shall allow a contracting
    16  agency to file a complaint with the  director  pursuant  to  subdivision
    17  [eight] nine of this section in the event a contractor is failing or has
    18  failed  to  comply with the minority and women-owned business enterprise
    19  participation requirements set forth in  the  state  contract  where  no
    20  waiver has been granted.

    21    (b) The rules and regulations promulgated pursuant to this subdivision
    22  regarding  a  utilization plan shall provide that where enterprises have
    23  been identified within a utilization plan, a contractor  shall  attempt,
    24  in  good  faith, to utilize such enterprise at least to the extent indi-
    25  cated. A contracting agency may require a contractor to indicate, within
    26  a utilization plan, what measures and procedures he or  she  intends  to
    27  take to comply with the provisions of this article, but may not require,
    28  as  a  condition  of  award  of,  or  compliance with, a contract that a
    29  contractor  utilize  a  particular  enterprise  in  performance  of  the
    30  contract.
    31    (c) Without limiting other grounds for the disqualification of bids or
    32  proposals  on  the basis of non-responsibility, a contracting agency may
    33  disqualify the bid or proposal of a contractor as being  non-responsible

    34  for  failure  to  remedy notified deficiencies contained in the contrac-
    35  tor's utilization plan within a period of time specified in  regulations
    36  promulgated  by  the director after receiving notification of such defi-
    37  ciencies from the contracting agency. Where failure to remedy any  noti-
    38  fied  deficiency  in  the utilization plan is a ground for disqualifica-
    39  tion, that issue and all other grounds  for  disqualification  shall  be
    40  stated in writing by the contracting agency. Where the contracting agen-
    41  cy states that a failure to remedy any notified deficiency in the utili-
    42  zation  plan  is  a  ground for disqualification the contractor shall be
    43  entitled to an  administrative  hearing,  on  a  record,  involving  all
    44  grounds  stated  by  the  contracting  agency.  Such  hearing  shall  be
    45  conducted by the appropriate authority  of  the  contracting  agency  to

    46  review  the  determination  of  disqualification. A final administrative
    47  determination made following such  hearing  shall  be  reviewable  in  a
    48  proceeding  commenced  under article seventy-eight of the civil practice
    49  law and rules, provided that such proceeding is commenced within  thirty
    50  days  of  the  notice  given  by certified mail return receipt requested
    51  rendering such final administrative determination. Such proceeding shall
    52  be commenced in the supreme court, appellate division, third  department
    53  and  such  proceeding  shall  be  preferred  over all other civil causes
    54  except election causes, and shall be heard and determined in  preference
    55  to  all  other  civil business pending therein, except election matters,
    56  irrespective of position on the calendar. Appeals taken to the court  of
        S. 8314                            10
 

     1  appeals  of  the  state of New York shall be subject to the same prefer-
     2  ence.
     3    [5.]  6. Where it appears that a contractor cannot, after a good faith
     4  effort, comply with the minority  and  women-owned  business  enterprise
     5  participation  requirements  set forth in a particular state contract, a
     6  contractor may file a written application with  the  contracting  agency
     7  requesting  a partial or total waiver of such requirements setting forth
     8  the reasons for such contractor's inability to meet any or  all  of  the
     9  participation  requirements  together with an explanation of the efforts
    10  undertaken by the contractor to obtain the required minority and  women-
    11  owned  business enterprise participation. In implementing the provisions
    12  of this section, the contracting agency shall consider  the  number  and

    13  types  of  minority  and women-owned business enterprises located in the
    14  region in which the state contract is to be performed, the total  dollar
    15  value  of  the state contract, the scope of work to be performed and the
    16  project size and term. If, based on such considerations, the contracting
    17  agency determines there is not a reasonable availability of  contractors
    18  on  the  list of certified business to furnish services for the project,
    19  it shall issue a waiver of compliance to the contractor. In making  such
    20  determination,  the  contracting  agency shall first consider the avail-
    21  ability of other business enterprises located in the  region  and  shall
    22  thereafter  consider  the  financial ability of minority and women-owned
    23  businesses located outside the region in which the  contract  is  to  be
    24  performed to perform the state contract.

    25    [6.]  7.  For purposes of determining a contractor's good faith effort
    26  to comply with the requirements of this section or to be entitled  to  a
    27  waiver therefrom the contracting agency shall consider:
    28    (a)  whether  the  contractor  has  advertised  in general circulation
    29  media, trade association publications, and minority-focus and  women-fo-
    30  cus  media  and, in such event, (i) whether or not certified minority or
    31  women-owned businesses which  have  been  solicited  by  the  contractor
    32  exhibited  interest  in submitting proposals for a particular project by
    33  attending a pre-bid conference; and
    34    (ii) whether certified businesses which have  been  solicited  by  the
    35  contractor have responded in a timely fashion to the contractor's solic-
    36  itations  for timely competitive bid quotations prior to the contracting
    37  agency's bid date; and

    38    (b) whether there has been written notification to appropriate  certi-
    39  fied  businesses  that  appear  in the directory of certified businesses
    40  prepared pursuant to paragraph (f) of subdivision three of section three
    41  hundred eleven of this article; and
    42    (c) whether the contractor can reasonably structure the amount of work
    43  to be performed under subcontracts in order to increase  the  likelihood
    44  of participation by certified businesses.
    45    [7.]  8.  In  the  event that a contracting agency fails or refuses to
    46  issue a waiver to a contractor as requested  within  twenty  days  after
    47  having  made  application therefor pursuant to subdivision [five] six of
    48  this section or if the contracting agency denies  such  application,  in
    49  whole  or in part, the contractor may file a complaint with the director

    50  pursuant to section three hundred sixteen of this article setting  forth
    51  the  facts  and  circumstances giving rise to the contractor's complaint
    52  together with a demand for relief. The contractor shall serve a copy  of
    53  such  complaint  upon  the  contracting agency by personal service or by
    54  certified mail, return receipt requested. The contracting  agency  shall
    55  be afforded an opportunity to respond to such complaint in writing.
        S. 8314                            11
 
     1    [8.]  9.  If,  after  the  review of a contractor's minority and women
     2  owned business utilization plan  or  review  of  a  periodic  compliance
     3  report  and  after  such  contractor has been afforded an opportunity to
     4  respond to a notice of deficiency issued by the  contracting  agency  in

     5  connection  therewith, it appears that a contractor is failing or refus-
     6  ing to comply with the minority and women-owned  business  participation
     7  requirements as set forth in the state contract and where no waiver from
     8  such  requirements  has  been granted, the contracting agency may file a
     9  written complaint with the director pursuant to  section  three  hundred
    10  sixteen of this article setting forth the facts and circumstances giving
    11  rise  to  the  contracting agency's complaint together with a demand for
    12  relief.  The contracting agency shall serve a  copy  of  such  complaint
    13  upon  the  contractor  by  personal service or by certified mail, return
    14  receipt requested. The contractor shall be afforded  an  opportunity  to
    15  respond to such complaint in writing.
    16    §  6.  The  executive  law is amended by adding a new section 313-a to
    17  read as follows:

    18    § 313-a. Diversity practices of state contractors. The director  shall
    19  promulgate  rules  and regulations setting forth measures and procedures
    20  to require all contracting agencies,  where  practicable,  feasible  and
    21  appropriate, to assess the diversity practices of contractors submitting
    22  bids or proposals in connection with the award of a state contract. Such
    23  rules  and regulations shall take into account: the nature of the labor,
    24  services, supplies, equipment or materials being procured by  the  state
    25  agency;  the method of procurement required to be used by a state agency
    26  to award the contract and minority and women-owned business  utilization
    27  plans required to be submitted pursuant to sections three hundred twelve

    28  and  three  hundred  thirteen of this article; and such other factors as
    29  the director deems appropriate or necessary  to  promote  the  award  of
    30  state  contracts  to contractors having sound diversity practices.  Such
    31  assessment shall not in any way permit the automatic rejection of a  bid
    32  or procurement contract proposal based on lack of adherence to diversity
    33  practices.   Each bid or proposal shall be analyzed on an individual per
    34  bid or per proposal basis  with  the  contractor's  diversity  practices
    35  considered  as  only  a part of a wider consideration of several factors
    36  when deciding to award or decline to award  a  bid  or  proposal.    The
    37  director shall develop the rules and regulations required hereunder only

    38  after  consultation  with  the  state procurement council established by
    39  section one hundred sixty-one of the state finance law.
    40    § 7. Subdivision 3 of section 315 of the executive law,  as  added  by
    41  chapter 261 of the laws of 1988, is amended and four new subdivisions 4,
    42  5, 6 and 7 are added to read as follows:
    43    3.  Each  contracting agency shall report to the director with respect
    44  to activities undertaken to promote employment of minority group members
    45  and women and promote and increase participation by certified businesses
    46  with respect to state contracts and subcontracts. Such reports shall  be
    47  submitted  periodically,  but  not  less  frequently  than  annually, as
    48  required by the director, and  shall  include  such  information  as  is
    49  necessary  for  the director to determine whether the contracting agency

    50  and contractor have complied with the purposes of this article,  includ-
    51  ing, without limitation, a summary of all waivers of the requirements of
    52  subdivisions  six  and  seven  of section three hundred thirteen of this
    53  article allowed by the contracting agency during the period  covered  by
    54  the  report,  including a description of the basis of the waiver request
    55  and the rationale for granting any such waiver.  Each agency shall  also
    56  include  in  such  annual  report whether or not it has been required to
        S. 8314                            12
 
     1  prepare a remedial plan, and, if so, the plan and the  extent  to  which
     2  the agency has complied with each element of the plan.

     3    4.  The  division  of  minority and women's business development shall
     4  issue an annual report which: (a) summarizes  the  report  submitted  by
     5  each  contracting  agency pursuant to subdivision three of this section;
     6  (b) contains such comparative or other information as the director deems
     7  appropriate, including but not  limited  to  goals  compared  to  actual
     8  participation  of minority and women-owned business enterprises in state
     9  contracting, to evaluate the effectiveness of the activities  undertaken
    10  by  each  such  contracting agency to promote increased participation by
    11  certified minority or  women-owned  businesses  with  respect  to  state
    12  contracts and subcontracts; (c) contains a summary of all waivers of the

    13  requirements  of  subdivisions  six  and  seven of section three hundred
    14  thirteen of this article allowed by each contracting agency  during  the
    15  period  covered  by  the report, including a description of the basis of
    16  the waiver request and the contracting agency's rationale  for  granting
    17  any such waiver; (d) describes any efforts to create a database or other
    18  information storage and retrieval system containing information relevant
    19  to  contracting  with minority and women-owned business enterprises; and
    20  (e) contains a summary of (i) all determinations of violations  of  this
    21  article  by  a contractor or a contracting agency made during the period
    22  covered by the annual report pursuant to section three hundred sixteen-a

    23  of this article and (ii) the penalties or sanctions, if any, assessed in
    24  connection with such determinations and the rationale for such penalties
    25  or sanctions.  Copies of the annual report  shall  be  provided  to  the
    26  commissioner,  the governor, the comptroller, the temporary president of
    27  the senate, the speaker of the assembly,  the  minority  leader  of  the
    28  senate, the minority leader of the assembly and shall also be made wide-
    29  ly  available  to  the  public via, among other things, publication on a
    30  website maintained by the division  of  minority  and  women's  business
    31  development.
    32    5. Each agency shall include in its  annual report to the governor and
    33  legislature  pursuant to section one hundred sixty-four of the executive

    34  law its annual goals for contracts with minority-owned  and  women-owned
    35  business  enterprises,  the number of actual contracts issued to minori-
    36  ty-owned and women-owned business enterprises;  and  a  summary  of  all
    37  waivers  of  the  requirements  of subdivisions six and seven of section
    38  three hundred thirteen of this article allowed by the  reporting  agency
    39  during  the  preceding year, including a description of the basis of the
    40  waiver request and the rationale for granting such waiver.  Each  agency
    41  shall  also  include  in  such  annual report whether or not it has been
    42  required to prepare a remedial plan, and, if so, the plan and the extent
    43  to which the agency has complied with each element of the plan.

    44    6. Each contracting agency that substantially fails to meet the  goals
    45  supported by the disparity study, as defined by regulation of the direc-
    46  tor,  shall be required to submit to the director a remedial action plan
    47  to remedy such failure.
    48    7. If it is determined by the director that any agency has  failed  to
    49  act  in  good  faith  to implement the remedial action plan, pursuant to
    50  subdivision six of this section within  one  year,  the  director  shall
    51  provide written notice of such a finding, which shall be publicly avail-
    52  able, and direct implementation of remedial actions to:
    53    (a) assure that sufficient and effective solicitation efforts to women
    54  and minority-owned business enterprises are being made by said agency;

        S. 8314                            13
 
     1    (b)  divide  contract  requirements,  when economically feasible, into
     2  quantities that will expand the participation  of  women  and  minority-
     3  owned business enterprises;
     4    (c) eliminate extended experience or capitalization requirements, when
     5  programmatically  and  economically  feasible,  that will expand partic-
     6  ipation by women and minority-owned business enterprises;
     7    (d) identify specific proposed contracts as particularly attractive or
     8  appropriate for  participation  by  women  and  minority-owned  business
     9  enterprises  with such identification to result from and be coupled with
    10  the efforts of paragraphs (a), (b), and (c) of this subdivision; and

    11    (e) upon a finding by the director that an agency has failed  to  take
    12  affirmative measures to implement the remedial plan and to follow any of
    13  the  remedial  actions  set forth by the director, and in the absence of
    14  any objective progress towards the agency's goals, require some  or  all
    15  of  the  agency's procurement, for a specified period of time, be placed
    16  under the direction and control of another agency or agencies.
    17    § 8. Subdivision 2-a of section 314 of the executive law, as added  by
    18  section  2  of  part BB of chapter 59 of the laws of 2006, is amended to
    19  read as follows:
    20    2-a. (a) The director shall establish a procedure enabling the  office
    21  to  accept New York municipal corporation certification verification for
    22  minority and women-owned  business  enterprise  applicants  in  lieu  of

    23  requiring the applicant to complete the state certification process. The
    24  director  shall  promulgate  rules and regulations to set forth criteria
    25  for the acceptance of municipal corporation certification. All  eligible
    26  municipal  corporation certifications shall require business enterprises
    27  seeking certification to meet the following standards:
    28    (i) have at least fifty-one percent  ownership  by  a  minority  or  a
    29  women-owned  enterprise and be owned by United States citizens or perma-
    30  nent resident aliens;
    31    (ii) be an enterprise in which  the  minority  and/or  women-ownership
    32  interest is real, substantial and continuing;
    33    (iii)  be  an  enterprise in which the minority and/or women-ownership
    34  has and exercises the authority to control independently the  day-to-day
    35  business decisions of the enterprise;

    36    (iv) be an enterprise authorized to do business in this state; [and]
    37    (v)  be  subject to a physical site inspection to verify the fifty-one
    38  percent ownership requirement[.];
    39    (vi) be owned  by  an  individual  or  individuals,  whose  ownership,
    40  control and operation are relied upon for certification, with a personal
    41  net  worth  that  does  not  exceed  three million five hundred thousand
    42  dollars, as adjusted annually for inflation according  to  the  consumer
    43  price index; and
    44    (vii)  be  an enterprise that is a small business pursuant to subdivi-
    45  sion twenty of section three hundred ten of this article.
    46    (b) The director shall work with all municipal corporations that  have
    47  a  municipal  minority  and  women-owned  business enterprise program to

    48  develop standards to accept state certification to  meet  the  municipal
    49  corporation  minority  and women-owned business enterprise certification
    50  standards.
    51    (c) The director shall establish a procedure enabling the division  to
    52  accept  federal  certification verification for minority and women-owned
    53  business enterprise applicants, provided  said  standards  comport  with
    54  those  required  by the state minority and women-owned business program,
    55  in lieu of requiring the applicant to complete the  state  certification
        S. 8314                            14
 
     1  process.  The  director  shall  promulgate  rules and regulations to set
     2  forth criteria for the acceptance of federal certification.
     3    §  9. Section 316 of the executive law, as added by chapter 261 of the
     4  laws of 1988, is amended to read as follows:

     5    § 316. Enforcement. Upon receipt by the director of a complaint  by  a
     6  contracting  agency  that  a contractor has violated the provisions of a
     7  state contract which have been included to comply with the provisions of
     8  this article or of a contractor that a contracting agency  has  violated
     9  such provisions or has failed or refused to issue a waiver where one has
    10  been  applied  for  pursuant  to subdivision [five] six of section three
    11  hundred thirteen of this article or has  denied  such  application,  the
    12  director  shall  attempt  to  resolve  the  matter  giving  rise to such
    13  complaint. If efforts to resolve such matter to the satisfaction of  all
    14  parties  are  unsuccessful,  the director shall refer the matter, within
    15  thirty days of the receipt of the  complaint,  to  the  [American  Arbi-

    16  tration Association for proceeding thereon] division's hearing officers.
    17  Upon conclusion of the [arbitration proceedings] administrative hearing,
    18  the [arbitrator] hearing officer shall submit to the director his or her
    19  [award]  decision  regarding  the  alleged violation of the contract and
    20  recommendations regarding the imposition of sanctions, fines  or  penal-
    21  ties.  [The  director shall either:  (a) adopt the recommendation of the
    22  arbitrator; or (b) determine  that  no  sanctions,  fines  or  penalties
    23  should  be  imposed; or (c) modify the recommendation of the arbitrator,
    24  provided that such modification  shall  not  expand  upon  any  sanction
    25  recommended  or  impose  any new sanction, or increase the amount of any

    26  recommended fine or penalty.] The director, within ten days  of  receipt
    27  of  the  [arbitrator's award and recommendations] decision, shall file a
    28  determination of such matter and shall cause a  copy  of  such  determi-
    29  nation along with a copy of this article to be served upon the [respond-
    30  ent]  contractor by personal service or by certified mail return receipt
    31  requested. The [award] decision  of  the  [arbitrator]  hearing  officer
    32  shall  be final and may only be vacated or modified as provided in arti-
    33  cle [seventy-five] seventy-eight of the civil  practice  law  and  rules
    34  upon  an  application made within the time provided by [section seventy-

    35  five hundred eleven of the civil practice law and rules]  such  article.
    36  The  determination  of  the  director as to the imposition of any fines,
    37  sanctions or penalties shall be reviewable pursuant to article  seventy-
    38  eight of the civil practice law and rules. The penalties imposed for any
    39  violation  which  is  premised  upon  either a fraudulent or intentional
    40  misrepresentation by the contractor  or  the  contractor's  willful  and
    41  intentional  disregard  of  the  minority  and women-owned participation
    42  requirement included in the contract may include  a  determination  that
    43  the  contractor  shall  be ineligible to submit a bid to any contracting
    44  agency or be awarded any such contract for a period not  to  exceed  one

    45  year  following the final determination; provided however, if a contrac-
    46  tor has previously been determined to be  ineligible  to  submit  a  bid
    47  pursuant  to  this  section,  the  penalties  imposed for any subsequent
    48  violation, if such violation occurs  within  five  years  of  the  first
    49  violation,  may  include  a  determination  that the contractor shall be
    50  ineligible to submit a bid to any contracting agency or be  awarded  any
    51  such  contract for a period not to exceed five years following the final
    52  determination. The division of minority and women's business development
    53  shall maintain a website listing all contractors that have  been  deemed
    54  ineligible  to  submit a bid pursuant to this section and the date after

    55  which each contractor shall once again become eligible to submit bids.
        S. 8314                            15
 
     1    § 10. The executive law is amended by adding a new  section  316-a  to
     2  read as follows:
     3    §  316-a.  Prohibitions  in  contracts;  violations. Every contracting
     4  agency shall include  a  provision  in  its  state  contracts  expressly
     5  providing  that  any contractor who willfully and intentionally fails to
     6  comply with the minority and women-owned participation  requirements  of
     7  this  article as set forth in such state contract shall be liable to the
     8  contracting agency for liquidated or other appropriate damages and shall
     9  provide for other appropriate remedies on  account  of  such  breach.  A

    10  contracting  agency  that  elects  to  proceed  against a contractor for
    11  breach of contract as provided in this section shall be  precluded  from
    12  seeking  enforcement  pursuant  to section three hundred sixteen of this
    13  article; provided however, that the contracting agency shall  include  a
    14  summary  of  all enforcement actions undertaken pursuant to this section
    15  in its annual report submitted pursuant to subdivision three of  section
    16  three hundred fifteen of this article.
    17    §  11.  Severability.  If  any clause, sentence, paragraph, section or
    18  part of this act shall be adjudged by any court of  competent  jurisdic-
    19  tion to be invalid, the judgment shall not affect, impair, or invalidate
    20  the  remainder  thereof,  but  shall be confined in its operation to the

    21  clause, sentence, paragraph,  section  or  part  of  this  act  directly
    22  involved  in  the  controversy  in  which  the  judgment shall have been
    23  rendered.
    24    § 12. The state financial system is authorized and directed to  assist
    25  the  director of the office of minority and women's business development
    26  in the implementation of this act.
    27    § 13.  The opening  paragraph of subdivision (h)  of  section  121  of
    28  chapter  261  of  the  laws  of 1988, amending the state finance law and
    29  other laws relating to the New York state infrastructure trust fund,  as
    30  amended  by  chapter  628  of  the  laws  of 2003, is amended to read as
    31  follows:
    32    The provisions of section sixty-two  through  sixty-six  of  this  act
    33  shall  expire on December thirty-first, two thousand [eighteen] sixteen,
    34  except that:

    35    § 14. This act shall take effect on the ninetieth day after  it  shall
    36  have become a law; provided however, that the amendments to article 15-A
    37  of  the  executive  law  made  by  sections two, four, five, six, seven,
    38  eight, nine, and ten of this act shall not affect the expiration of such
    39  article and shall be deemed to expire therewith; provided, further  that
    40  the  director  of the division of minority and women's business develop-
    41  ment shall be authorized to commence  the  rulemaking  process  required
    42  pursuant  to  sections  five  and six of this act prior to the effective
    43  date of this act; and provided further that any minority business enter-
    44  prise and women's business enterprise certified prior to  the  effective
    45  date  of  this  section  shall  not  be  subject  to  any  certification
    46  restriction provided for in this act until  such  time  as  the  certif-

    47  ication is renewed.