NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6729
SPONSOR: Bichotte Hermelyn TITLE OF BILL:
An act to amend the executive law, in relation to criteria for certif-
ication by the division of minority and women's business development of
minority and women-owned business enterprise status; and to repeal
subdivision 19 of section 310 of such law relating to the definition of
personal net worth
PURPOSE:
The purpose of this bill is to redefine the criteria for certified
minority and women-owned business enterprise (MWSE) by eliminating the
unnecessary Personal Net Worth Threshold substituting another limiting
factor with contract values awarded of sixty million dollars within a
period of time (3 consecutive years) and by changing the definition of
Small business as it pertains to size pursuant to the United States
Small Business Administration Size Standards
SUMMARY OF PROVISIONS:
Section 1: subdivision 2-a and Section 2 subdivision 7-e and 20 of the
bill amends section 314 of the executive law by Eliminating the personal
net worth, limiting factor with contract values awarded of sixty million
dollars within a period of time (3 consecutive years) and by changing
the definition of Small business as it pertain to size pursuant to the
United States Small Business Administration Size Standards
Section 2 is the effective date
JUSTIFICATION:
This bill intends to address the limitation imposed on minority and
women-owned business enterprise (MWBE) from growing and entering
projects due to unnecessary "personal net worth" that was included in
2010 program.
New York State has demonstrated the highest strict scrutiny standard
with a comprehensive disparity study abiding by the Supreme Court Ruling
in Croson v. Richmond.
An MWBE business in the program should not be defined as an individual
personal net worth. 19 other states and New York City with MWBE programs
do not have a personal net worth, which has not compromised the program.
This bill will replace the net worth cap with another limiting factor
that has worked in New York City which is to limit the contract value
awards to sixty million within a 3 consecutive period.
LEGISLATIVE HISTORY:
2019-20: A6223; referred to governmental operations
2017-18: A9977A; Recommitted to government operations with amendments
FISCAL IMPLICATIONS:
None.
STATE OF NEW YORK
________________________________________________________________________
6729
2021-2022 Regular Sessions
IN ASSEMBLY
March 29, 2021
___________
Introduced by M. of A. BICHOTTE HERMELYN -- read once and referred to
the Committee on Governmental Operations
AN ACT to amend the executive law, in relation to criteria for certif-
ication by the division of minority and women's business development
of minority and women-owned business enterprise status; and to repeal
subdivision 19 of section 310 of such law relating to the definition
of personal net worth
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (a) of subdivision 2-a of section 314 of the
2 executive law, as amended by chapter 96 of the laws of 2019, is amended
3 to read as follows:
4 (a) The director shall establish a procedure enabling the office to
5 accept New York municipal corporation certification verification for
6 minority and women-owned business enterprise applicants in lieu of
7 requiring the applicant to complete the state certification process. The
8 director shall promulgate rules and regulations to set forth criteria
9 for the acceptance of municipal corporation certification. All eligible
10 municipal corporation certifications shall require business enterprises
11 seeking certification to meet the following standards:
12 (i) have at least fifty-one percent ownership by a minority or a
13 women-owned enterprise and be owned by United States citizens or perma-
14 nent resident aliens;
15 (ii) be an enterprise in which the minority and/or women-ownership
16 interest is real, substantial and continuing;
17 (iii) be an enterprise in which the minority and/or women-ownership
18 has and exercises the authority to control independently the day-to-day
19 business decisions of the enterprise;
20 (iv) be an enterprise authorized to do business in this state;
21 (v) be subject to a physical site inspection to verify the fifty-one
22 percent ownership requirement;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07092-01-1
A. 6729 2
1 (vi) be owned by an individual or individuals, whose ownership,
2 control and operation are relied upon for certification[, with a
3 personal net worth that does not exceed fifteen million dollars and such
4 other amount as the director shall set forth in regulations, as adjusted
5 annually for inflation according to the consumer price index] and that
6 has been awarded contracts by one or more agencies within the past three
7 years where the total city funding received by the enterprise from the
8 expense and capital budgets for such contracts was equal to or greater
9 than sixty million dollars, exclusive of any payments made to subcon-
10 tractors, and whose size has exceeded the size standards established for
11 its industry by the United States small business administration for
12 three years; and
13 (vii) be an enterprise that is a small business pursuant to subdivi-
14 sion twenty of section three hundred ten of this article.
15 § 2. Paragraph (e) of subdivision 7, paragraph (e) of subdivision 15
16 and subdivision 20 of section 310 of the executive law, paragraph (e) of
17 subdivision 7 and paragraph (e) of subdivision 15 as amended by chapter
18 96 of the laws of 2019 and subdivision 20 as added by chapter 175 of the
19 laws of 2010, are amended to read as follows:
20 (e) an enterprise owned by an individual or individuals, whose owner-
21 ship, control and operation are relied upon for certification[, with a
22 personal net worth that does not exceed fifteen million dollars, and
23 such other amount as the director shall set forth in regulations, as
24 adjusted annually on the first of January for inflation according to the
25 consumer price index of the previous year] and that has been awarded
26 contracts by one or more agencies within the past three years where the
27 total state funding received by the enterprise from the expense and
28 capital budgets for such contracts was equal to or greater than sixty
29 million dollars, exclusive of any payments made to subcontractors, and
30 whose size has exceeded the size and standards established for its
31 industry by the United States small business administration for three
32 years; and
33 (e) an enterprise owned by an individual or individuals, whose owner-
34 ship, control and operation are relied upon for certification[, with a
35 personal net worth that does not exceed fifteen million dollars, and
36 such other amount as the director shall set forth in regulations, as
37 adjusted annually on the first of January for inflation according to the
38 consumer price index of the previous year] and that has been awarded
39 contracts by one or more agencies within the past three years where
40 the total state funding received by the enterprise from the expense and
41 capital budgets for such contracts was equal to or greater than sixty
42 million dollars, exclusive of any payments made to subcontractors, and
43 whose size has exceeded the size standards established for its industry
44 by the United States small business administration for three years;
45 and
46 20. "Small business" as used in this section, unless otherwise indi-
47 cated, shall mean a business which has a significant business presence
48 in the state, is independently owned and operated, not dominant in its
49 field and [employs, based on its industry, a certain number of persons
50 as determined by the director, but not to exceed three hundred, taking
51 into consideration factors which include, but are not limited to, feder-
52 al small business administration standards] whose size does not exceed
53 the size standards established by the United States small business
54 administration for its industry pursuant to 13 CFR part 121 and any
55 amendments thereto. The director may issue regulations on the
56 construction of the terms in this definition.
A. 6729 3
1 § 3. Subdivision 19 of section 310 of the executive law is REPEALED.
2 § 4. This act shall take effect on the ninetieth day after it shall
3 have become a law; provided, however, that the amendments to article
4 15-A of the executive law made by sections one and two of this act shall
5 not affect the expiration of such article and shall be deemed to expire
6 therewith.
