S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7654

                            I N  S E N A T E

                             April 29, 2010
                               ___________

Introduced  by  Sen.  MONTGOMERY  -- read twice and ordered printed, and
  when printed to be committed to the Committee on Finance

AN ACT to amend the executive  law,  in  relation  to  participation  by
  minority  group  members  and  women  with  respect  to  certain state
  contracts; and to amend the state finance law, in relation  to  estab-
  lishing  a  mentor-protege  program  for small and minority and women-
  owned business concerns and in relation  to  performance  and  payment
  bond requirements

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions 3 and 4 of section 311 of the  executive  law,
subdivision  3  as  added by chapter 261 of the laws of 1988, paragraphs
(d) and (e) of subdivision 3 as amended by chapter 55  of  the  laws  of
1992,  paragraphs  (g) and (h) of subdivision 3 as amended and paragraph
(i) of subdivision 3 as added by section 1 of part BB of chapter  59  of
the laws of 2006 and subdivision 4 as amended by chapter 361 of the laws
of 2009, are amended to read as follows:
  3. The director shall have the following powers and duties:
  (a)  to  encourage and assist contracting agencies in their efforts to
increase participation by minority and women-owned business  enterprises
on  state  contracts and subcontracts so as to facilitate the award of a
fair share of such contracts to them AND TO PROVIDE  ON  THE  DIVISION'S
WEBSITE  A  LIST  OF  EACH CONTRACTING AGENCY'S MINORITY AND WOMEN-OWNED
BUSINESS ENTERPRISES CERTIFICATION OUTREACH SEMINARS;
  (b) to develop standardized forms and reporting documents necessary to
implement this article;
  (c) to conduct educational OUTREACH programs TO ENCOURAGE THE  CERTIF-
ICATION OF MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES consistent with
the purposes of this article;
  (d) to review [periodically] QUARTERLY the practices and procedures of
each  contracting  agency with respect to compliance with the provisions
of this article, and  to  require  them  to  file  [periodic]  QUARTERLY
reports  with  the division of minority and women's business development
as to the level of minority and women-owned business enterprises partic-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD03888-04-0

S. 7654                             2

ipation in the awarding of  agency  contracts  for  goods  and  services
INCLUDING  BUT  NOT  LIMITED TO THE NUMBER OF STATE CONTRACTS AWARDED TO
CERTIFIED MINORITY-OWNED OR WOMEN-OWNED BUSINESS ENTERPRISES, THE  MAXI-
MUM  DOLLAR  AMOUNT  OBLIGATED  PURSUANT TO ALL THOSE CONTRACTS, AND THE
TOTAL EXPENDITURES MADE PURSUANT TO ALL SUCH CONTRACTS;  THE  NUMBER  OF
STATE  CONTRACTS  AWARDED  TO CERTIFIED MINORITY OR WOMEN-OWNED BUSINESS
ENTERPRISES, THE MAXIMUM DOLLAR AMOUNT OBLIGATED PURSUANT TO  ALL  THOSE
CONTRACTS,  AND  THE  TOTAL  EXPENDITURES  MADE  PURSUANT  TO  ALL  SUCH
CONTRACTS; THE NUMBER OF STATE CONTRACTS AWARDED WHICH INCLUDE A  UTILI-
ZATION   PLAN  FOR  BUSINESS  PARTICIPATION  BY  CERTIFIED  MINORITY  OR
WOMEN-OWNED BUSINESS ENTERPRISES, THE MAXIMUM AMOUNT OBLIGATED  PURSUANT
TO THOSE CONTRACTS, AND THE TOTAL EXPENDITURES MADE PURSUANT TO ALL SUCH
CONTRACTS; THE NUMBER OF STATE CONTRACTS AWARDED UPON WHICH A WAIVER WAS
GRANTED  FROM GOALS REQUIRED BY THE CONTRACTS FOR BUSINESS PARTICIPATION
BY CERTIFIED MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES, AND THE MAXI-
MUM AMOUNT OBLIGATED PURSUANT TO THOSE CONTRACTS; THE  NUMBER  OF  STATE
CONTRACTS  AWARDED WHICH REQUIRED GOALS FOR EMPLOYMENT OF MINORITY GROUP
MEMBERS AND WOMEN; AND THE NUMBER OF STATE CONTRACTS AWARDED  FOR  WHICH
WAIVERS OF EMPLOYMENT GOALS REQUIRED BY THE CONTRACTS HAVE BEEN GRANTED;
  (e)  on  January first of each year report to the governor, THE TEMPO-
RARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, THE  MINORITY
LEADERS  OF  THE  SENATE  AND  THE ASSEMBLY, and the chairpersons of the
senate finance and assembly ways and means  committees  on  the  [level]
ACTUAL  VERSUS  PROJECTED  LEVELS  of  minority and women-owned business
enterprises participating in each agency's contracts  for  goods  [and],
services  AND  CONSTRUCTION,  INCLUDING BUT NOT LIMITED TO THE NUMBER OF
STATE CONTRACTS AWARDED TO CERTIFIED MINORITY-OWNED OR WOMEN-OWNED BUSI-
NESS ENTERPRISES, THE MAXIMUM DOLLAR AMOUNT OBLIGATED  PURSUANT  TO  ALL
THOSE  CONTRACTS,  AND  THE TOTAL EXPENDITURES MADE PURSUANT TO ALL SUCH
CONTRACTS, and on activities of the office and effort by each  contract-
ing  agency  to  promote employment of minority group members and women,
and to promote and increase participation by certified  businesses  with
respect  to  state  contracts  and  subcontracts so as to facilitate the
award of a fair share of state contracts to such businesses.  The  comp-
troller  shall  assist  the  division  in  collecting information on the
participation of certified business for each  contracting  agency.  Such
report  may  recommend  new  activities  and  programs to effectuate the
purposes of this article;
  (f) THE DIRECTOR SHALL LIST IN THE DIVISION'S ANNUAL REPORT THE  NAMES
OF  NON-COMPLIANT  AGENCIES  AND  THE  EXTENT  OF THEIR NONCOMPLIANCE IN
SUBMITTING ITS QUARTERLY MINORITY AND  WOMEN-OWNED  BUSINESS  ENTERPRISE
UTILIZATION REPORTS; AND, SHALL IMPLEMENT A MASTER LIST OF ALL THE STATE
AGENCIES  REQUIRED TO FILE QUARTERLY COMPLIANCE REPORTS AND SHALL ATTACH
SUCH LIST TO THE DIVISION'S ANNUAL REPORT.
  (G) to prepare and update  [periodically]  QUARTERLY  a  directory  of
certified  minority  and  women-owned  business enterprises which shall,
wherever practicable, be divided into  categories  of  labor,  services,
supplies,  equipment,  materials  and recognized construction trades and
which shall indicate areas or locations of the state where  such  enter-
prises are available to perform services, AND TO USE THIS INFORMATION TO
CREATE AN INTERNET BASED, CENTRALIZED STATE REGISTRY TO ENABLE APPROPRI-
ATE  STATE  CERTIFIED  MINORITY  AND WOMEN-OWNED BUSINESS ENTERPRISES TO
ACCESS CONTRACT AND SUBCONTRACT OPPORTUNITIES;
  [(g)] (H) to appoint independent hearing officers who by  contract  or
terms of employment shall preside over adjudicatory hearings pursuant to

S. 7654                             3

section  three  hundred  fourteen of this article for the office and who
are assigned no other work by the office;
  [(h)]  (I) notwithstanding the provisions of section two hundred nine-
ty-six of this chapter, to file a complaint pursuant to  the  provisions
of  section  two hundred ninety-seven of this chapter where the director
has knowledge that a contractor may  have  violated  the  provisions  of
paragraph  (a),  (b)  or  (c)  of subdivision one of section two hundred
ninety-six of this chapter where such violation is  unrelated,  separate
or distinct from the state contract as expressed by its terms; and
  [(i)]  (J)  to  streamline  the  state certification process to accept
federal and municipal corporation certifications.
  4. The director [may] SHALL  provide  assistance  to,  and  facilitate
access to programs serving certified businesses as well as applicants to
ensure  that such businesses benefit, as needed, from technical, manage-
rial and financial, and general business assistance;  training;  market-
ing;  organization  and  personnel skill development; project management
assistance; technology assistance; bond and insurance education  assist-
ance; and other business development assistance. In addition, the direc-
tor [may] SHALL, either independently or in conjunction with other state
agencies:
  (a)  develop  a  clearinghouse of information on programs and services
provided by entities that may assist such businesses;
  (b) review bonding and paperwork requirements imposed  by  contracting
agencies that may unnecessarily impede the ability of such businesses to
compete; and
  (c)  seek to maximize utilization by minority and women-owned business
enterprises of available federal resources including but not limited  to
federal grants, loans, loan guarantees, surety bonding guarantees, tech-
nical  assistance,  and programs and services of the federal small busi-
ness administration.
  S 2. Subdivision 5 of section 312 of the executive law,  as  added  by
chapter 261 of the laws of 1988, is amended to read as follows:
  5.  The director shall promulgate rules and regulations to ensure that
contractors and subcontractors undertake programs of affirmative  action
and equal employment opportunity as required by this section. Such rules
and regulations as they pertain to any particular agency shall be devel-
oped  after consultation with contracting agencies. Such rules and regu-
lations [may] SHALL require a contractor, after notice in a  bid  solic-
itation,  to  submit  an equal employment opportunity program [after bid
opening and prior to the award of any contract] AT  THE  TIME  BIDS  ARE
SUBMITTED,  and  [may]  SHALL require the contractor or subcontractor to
submit compliance reports relating to the  contractor's  or  subcontrac-
tor's  operation  and implementation of any equal employment opportunity
program in effect as of the date the contract is executed. The contract-
ing agency [may recommend to the director that] SHALL HAVE THE RIGHT  TO
RECOMMEND  THAT  the  director  take appropriate action according to the
procedures set forth in section three hundred sixteen  of  this  article
against  the  contractor for noncompliance with the requirements of this
section. The contracting agency  shall  be  responsible  for  monitoring
compliance with this section.
  S  3.  Subdivisions  1  and  2  and  paragraph (a) of subdivision 4 of
section 313 of the executive law, subdivisions 1 and 2 as added by chap-
ter 261 of the laws of 1988  and  paragraph  (a)  of  subdivision  4  as
amended  by  chapter  429  of  the  laws of 2009, are amended to read as
follows:

S. 7654                             4

  1. The director shall promulgate rules and  regulations  that  provide
measures  and  procedures  to  ensure that certified businesses shall be
given the opportunity for [meaningful] INCREASED  participation  in  the
performance of state contracts and to identify those state contracts for
which  certified  businesses  may best bid to actively and affirmatively
promote and assist their  participation  in  the  performance  of  state
contracts  so  as  to  facilitate  the  award  of  a fair share of state
contracts to such businesses AND ENCOURAGE JOINT VENTURES, PARTNERSHIPS,
AND MENTOR-PROTEGE RELATIONSHIPS  AS  DEFINED  IN  SECTION  ONE  HUNDRED
FORTY-SEVEN  OF  THE  STATE  FINANCE  LAW, BETWEEN PRIME CONTRACTORS AND
MINORITY AND WOMEN-OWNED BUSINESS ENTERPRISES.   Such  rules  and  regu-
lations  as  they  pertain  to  any particular agency shall be developed
after  consultation  with  the  contracting  agency.  Nothing   in   the
provisions  of  this  article shall be construed to limit the ability of
any certified business to bid on any contract.
  2. Contracting agencies shall include or require to be  included  with
respect  to  state  contracts for the acquisition, construction, demoli-
tion, replacement, major repair  or  renovation  of  real  property  and
improvements  thereon,  such  provisions  as [may] SHALL be necessary to
effectuate the provisions of this section in every bid specification and
state contract, including, but not limited to: (a) provisions  requiring
contractors  to make a good faith effort to solicit active participation
by enterprises identified  in  the  directory  of  certified  businesses
provided  to  the  contracting  agency  by the office; (b) requiring the
parties to agree as a condition of entering into such  contract,  to  be
bound  by  the provisions of section three hundred sixteen of this arti-
cle; and (c) requiring the contractor  to  include  the  provisions  set
forth  in  paragraphs (a) and (b) above in every subcontract in a manner
that the provisions will be binding upon each subcontractor as  to  work
in  connection  with  such  contract.  Provided,  however,  that no such
provisions shall be binding upon contractors or  subcontractors  in  the
performance  of  work  or  the provision of services that are unrelated,
separate or distinct from the state contract as expressed by its  terms,
and  nothing  in  this  section  shall  authorize  the  director  or any
contracting agency to impose any requirement on a contractor or  subcon-
tractor except with respect to a state contract.
  (a)  Contracting  agencies  shall administer the rules and regulations
promulgated by the director to ensure compliance with the provisions  of
this  section. Such rules and regulations: shall require a contractor to
submit a utilization plan [after bids are opened] AT THE TIME  THE  BIDS
ARE  SUBMITTED,  when  bids  are  required[, but prior to the award of a
state contract]; shall require the  contracting  agency  to  review  the
utilization plan submitted by the contractor and to post the utilization
plan  and  any waivers of compliance issued pursuant to subdivision five
of this section on the  website  of  the  contracting  agency  within  a
reasonable  period of time as established by the director; shall require
the contracting agency to notify the  contractor  in  writing  within  a
period  of  time  specified  by  the  director  as  to  any deficiencies
contained in the contractor's utilization  plan;  shall  require  remedy
thereof within a period of time specified by the director; shall require
the  contractor to submit [periodic] QUARTERLY compliance reports relat-
ing to the operation and implementation of any utilization  plan;  shall
NOT  ALLOW  ANY AUTOMATIC WAIVERS, BUT SHALL allow a contractor to apply
for a partial or total waiver of the minority and  women-owned  business
enterprise  participation requirements pursuant to subdivisions five and
six of this section; shall allow a contractor to file a  complaint  with

S. 7654                             5

the  director pursuant to subdivision seven of this section in the event
a contracting agency has failed or refused to  issue  a  waiver  of  the
minority  and women-owned business enterprise participation requirements
or  has  denied such request for a waiver; and shall allow a contracting
agency to file a complaint with the  director  pursuant  to  subdivision
eight of this section in the event a contractor is failing or has failed
to  comply with the minority and women-owned business enterprise partic-
ipation requirements set forth in the state contract where no waiver has
been granted.
  S 4. Section 315 of the executive law, as added by chapter 261 of  the
laws of 1988, is amended to read as follows:
  S 315. Responsibilities  of  contracting agencies. 1. Each contracting
agency shall be responsible for monitoring  state  contracts  under  its
jurisdiction, and recommending matters to the office respecting non-com-
pliance  with  the  provisions  of this article so that the office [may]
SHALL take such action as [is appropriate] STATED IN  SUBDIVISION  THREE
OF SECTION THREE HUNDRED SIXTEEN OF THIS ARTICLE. EACH CONTRACTING AGEN-
CY  SHALL  HAVE  THE RIGHT TO RECOMMEND THAT THE DIRECTOR IMPOSE A SANC-
TION, PENALTY, OR FINE FOR THREE OR MORE VIOLATIONS OF  SUBDIVISION  ONE
OF  SECTION  THREE HUNDRED SIXTEEN OF THIS ARTICLE, to insure compliance
with the provisions of this article, the rules and  regulations  of  the
director issued hereunder and the contractual provisions required pursu-
ant  to  this  article.  All  contracting agencies shall comply with the
rules and regulations of the office and are directed to  cooperate  with
the  office and to furnish to the office such information and assistance
as may be required in the performance of its functions under this  arti-
cle.
  2.  Each  contracting  agency  shall  provide to prospective bidders a
current copy of the directory of certified businesses, and a copy of the
regulations required pursuant to sections three hundred twelve and three
hundred thirteen of this article at  the  time  bids  or  proposals  are
solicited.
  3.  [Each contracting agency shall report to the director with respect
to activities undertaken to promote employment of minority group members
and women and promote and increase participation by certified businesses
with respect to state contracts and subcontracts. Such reports shall  be
submitted  periodically  as  required by the director.] EACH CONTRACTING
AGENCY WHEN NOTIFYING A CONTRACTOR OF A WINNING  BID  AWARD  SHALL  ALSO
NOTIFY  ANY MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES AFFILIATED WITH
SUCH CONTRACTOR, PER THE CONTRACTOR'S  SUBMITTED  UTILIZATION  PLAN,  OF
SUCH CONTRACTOR'S RECEIPT OF THE WINNING BID AWARD.
  4.  (A)  EACH  CONTRACTING AGENCY SHALL PREPARE A QUARTERLY REPORT AND
SUBMIT COPIES TO THE COMMISSIONER OF ECONOMIC DEVELOPMENT,  THE  COMMIS-
SIONER OF GENERAL SERVICES, AND THE DIRECTOR AS TO THE LEVEL OF MINORITY
AND  WOMEN-OWNED  BUSINESS  ENTERPRISES PARTICIPATION IN THE AWARDING OF
AGENCY CONTRACTS FOR GOODS AND SERVICES, INCLUDING BUT NOT  LIMITED  TO,
THE   NUMBER  OF  STATE  CONTRACTS  AWARDED  TO  CERTIFIED  MINORITY  OR
WOMEN-OWNED BUSINESS ENTERPRISES; THE MAXIMUM  DOLLAR  AMOUNT  OBLIGATED
PURSUANT  TO ALL THOSE CONTRACTS, AND THE TOTAL EXPENDITURES MADE PURSU-
ANT TO ALL SUCH CONTRACTS; THE NUMBER OF STATE CONTRACTS  AWARDED  WHICH
INCLUDE  A  UTILIZATION  PLAN  FOR  BUSINESS  PARTICIPATION BY CERTIFIED
MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES, THE MAXIMUM  AMOUNT  OBLI-
GATED  PURSUANT  TO  THOSE  CONTRACTS,  AND  THE TOTAL EXPENDITURES MADE
PURSUANT TO ALL SUCH CONTRACTS; THE NUMBER OF  STATE  CONTRACTS  AWARDED
UPON WHICH A WAIVER WAS GRANTED FROM GOALS REQUIRED BY THE CONTRACTS FOR
BUSINESS  PARTICIPATION  BY  CERTIFIED  MINORITY OR WOMEN-OWNED BUSINESS

S. 7654                             6

ENTERPRISES,  AND  THE  MAXIMUM  AMOUNT  OBLIGATED  PURSUANT  TO   THOSE
CONTRACTS;  THE  NUMBER  OF STATE CONTRACTS AWARDED WHICH REQUIRED GOALS
FOR EMPLOYMENT OF MINORITY GROUP MEMBERS AND WOMEN; AND  THE  NUMBER  OF
STATE  CONTRACTS  AWARDED FOR WHICH WAIVERS OF EMPLOYMENT GOALS REQUIRED
BY THE CONTRACTS HAVE BEEN GRANTED;
  (B) IN ADDITION, EACH CONTRACTING AGENCY SHALL BE RESPONSIBLE FOR  THE
COST  OF  AN  INDEPENDENT  AUDIT  RESULTING  FROM  THE AGENCY'S REPEATED
VIOLATIONS OF THIS SECTION.
  5. WITHIN THIRTY DAYS AFTER COMPLETION, A COPY OF THE QUARTERLY MINOR-
ITY AND WOMEN-OWNED BUSINESS ENTERPRISE REPORT SHALL BE  TRANSMITTED  TO
THE  COMMISSIONER  OF  ECONOMIC DEVELOPMENT, THE COMMISSIONER OF GENERAL
SERVICES, AND THE DIRECTOR. A CONTRACTING AGENCY, WHICH HAS NOT LET MORE
THAN TWO MILLION DOLLARS IN SERVICE AND/OR CONSTRUCTION CONTRACTS WITHIN
THE APPLICABLE PERIOD MAY APPLY TO THE COMMISSIONER OF ECONOMIC DEVELOP-
MENT, AND THE DIRECTOR FOR A WAIVER OF THE REQUIRED ANNUAL  REPORT.  THE
WAIVER  APPLICATION  SHALL  BE  MADE ON SUCH FORM AS THE COMMISSIONER OF
ECONOMIC DEVELOPMENT AND THE DIRECTOR MAY PRESCRIBE.
  6. IF A  CONTRACTING  AGENCY  SHALL  FAIL  TO  FILE  OR  SUBSTANTIALLY
COMPLETE,  AS DETERMINED BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT AND
THE DIRECTOR, THE REPORT REQUIRED BY THIS SECTION,  THE  DIRECTOR  SHALL
PROVIDE  NOTICE  TO  THE  CONTRACTING AGENCY. THE NOTICE SHALL STATE THE
FOLLOWING:
  (A) THAT THE FAILURE TO FILE A REPORT AS REQUIRED IS  A  VIOLATION  OF
THIS  SECTION,  OR  IN THE CASE OF AN INSUFFICIENT REPORT, THE MANNER IN
WHICH THE REPORT SUBMITTED IS DEFICIENT;
  (B) THAT THE CONTRACTING AGENCY HAS THIRTY DAYS TO  COMPLY  WITH  THIS
SECTION  OR  PROVIDE AN ADEQUATE WRITTEN EXPLANATION TO THE COMMISSIONER
OF ECONOMIC DEVELOPMENT AND THE COMMISSIONER OF GENERAL SERVICES AND THE
DIRECTOR OF THE  CONTRACTING  AGENCY'S  REASONS  FOR  THE  INABILITY  TO
COMPLY; AND
  (C)  THAT THE CONTRACTING AGENCY'S CONTINUED FAILURE TO PROVIDE EITHER
THE REQUIRED REPORT OR AN ADEQUATE EXPLANATION WILL RESULT IN  AN  INDE-
PENDENT  AUDIT  OF  THE  CONTRACTING  AGENCY, THE COST OF WHICH SHALL BE
BORNE BY THE CONTRACTING AGENCY.
  S 5. Section 316 of the executive law, as added by chapter 261 of  the
laws of 1988, is amended to read as follows:
  S  316.  [Enforcement]  VIOLATIONS AND ENFORCEMENT.   1. IT SHALL BE A
VIOLATION FOR ANY PERSON OR ENTITY TO:
  (A) INTENTIONALLY USE OR ACQUIRE AN MWBE NAME THROUGH DECEIT OR  OTHER
DISHONEST MEANS IN ORDER TO NEGOTIATE A LOWER BID FROM A NON-MWBE.
  (B)  SUBMIT  TO  THE  DEPARTMENT OF ECONOMIC DEVELOPMENT, DOCUMENTS OR
OTHER MATERIAL AS EVIDENCE OF A GOOD FAITH EFFORT  TO  COMPLY  WITH  THE
PROVISIONS  OF  THIS  ARTICLE  WITHOUT, IN FACT, HAVING ENTERED INTO ANY
CONTRACT, AGREEMENT, SUBCONTRACT, OR SUB-AGREEMENT WITH AN MWBE FOR  THE
USE  OR  PURCHASE OF SUCH BUSINESS ENTERPRISE'S GOODS OR SERVICES IN THE
PERFORMANCE OF THE AWARDED STATE CONTRACT.
  (C) FAIL TO PROVIDE AN  MWBE  WITH  SUFFICIENT  INFORMATION  OR  OTHER
REQUIRED  SUPPORTING  DOCUMENTATION  IN  ORDER FOR THE MWBE TO PREPARE A
PROPER BID.
  2. Upon receipt by the director of a complaint by a contracting agency
that a contractor has violated the provisions of a state contract  which
have been included to comply with the provisions of this article or of a
contractor that a contracting agency has violated such provisions or has
failed  or  refused  to  issue  a  waiver where one has been applied for
pursuant to subdivision five of section three hundred thirteen  of  this
article  or  has  denied such application, the director shall attempt to

S. 7654                             7

resolve the matter giving rise to such complaint. If efforts to  resolve
such  matter  to  the  satisfaction of all parties are unsuccessful, the
director shall refer the matter, within thirty days of  the  receipt  of
the  complaint,  to  the American Arbitration Association for proceeding
thereon. Upon conclusion of the arbitration proceedings, the  arbitrator
shall  submit  to  the  director  his or her award regarding the alleged
violation of the contract and recommendations regarding  the  imposition
of  sanctions, fines or penalties. The director shall either:  (a) adopt
the recommendation of the arbitrator; or (b)  determine  that  no  sanc-
tions, fines or penalties should be imposed; or (c) modify the recommen-
dation  of  the  arbitrator,  provided  that such modification shall not
expand upon any sanction recommended or  impose  any  new  sanction,  or
increase  the  amount  of any recommended fine or penalty. The director,
within ten days of receipt of the  arbitrator's  award  and  recommenda-
tions,  shall file a determination of such matter and shall cause a copy
of such determination along with a copy of this  article  to  be  served
upon  the  respondent  by  personal  service or by certified mail return
receipt requested. The award of the arbitrator shall be  final  and  may
only  be  vacated or modified as provided in article seventy-five of the
civil practice law and rules upon an application made  within  the  time
provided  by  section  seventy-five hundred eleven of the civil practice
law and rules. The determination of the director as to the imposition of
any fines, sanctions or penalties shall be reviewable pursuant to  arti-
cle seventy-eight of the civil practice law and rules.
  3.    THE  DIRECTOR  SHALL  IMPOSE A SANCTION, PENALTY, OR FINE ON ANY
INDIVIDUAL OR ENTITY THAT HAS THREE OR MORE VIOLATIONS OF  THIS  ARTICLE
WITHIN FIVE YEARS. SUCH FINE SHALL BE PAID BY SUCH INDIVIDUAL OR ENTITY.
SUCH  FINE SHALL BE REMITTED AND DEPOSITED INTO A FUND, TO BE MANAGED BY
THE COMMISSIONER OF ECONOMIC DEVELOPMENT.  SUCH FUNDS SHALL BE  USED  TO
SUBSIDIZE  THE  FACILITATION  OF  THE  PROVISIONS OF THIS ARTICLE. OTHER
SANCTIONS SHALL INCLUDE BARRING SUCH ENTITY OR INDIVIDUAL FROM CONTRACT-
ING WITH SUCH AGENCY FOR A PERIOD NOT TO EXCEED FIVE YEARS.
  S 6. Subdivision 1 of section 137 of the state finance law,  as  sepa-
rately amended by section 17 of part MM of chapter 57 and by chapter 619
of the laws of 2008, is amended to read as follows:
  1. In addition to other bond or bonds, if any, required by law for the
completion  of  a  work specified in a contract for the prosecution of a
public improvement for the state of New York a municipal corporation,  a
public benefit corporation or a commission appointed pursuant to law, or
in the absence of any such requirement, the comptroller may or the other
appropriate  official, respectively, shall nevertheless require prior to
the approval of any such contract a bond guaranteeing prompt payment  of
moneys  due to all persons furnishing labor or materials to the contrac-
tor or any subcontractors in the prosecution of the work provided for in
such contract. Whenever a municipal corporation issues a permit  subject
to  compliance  with  section  two hundred twenty of the labor law, such
permittee or its contractor or subcontractors furnishing  workers  shall
post a payment bond subject to this section. Provided, however, that all
performance  bonds  and payment bonds may, at the discretion of the head
of the state agency, public benefit corporation or commission, or his or
her designee, be dispensed with for the completion of a  work  specified
in  a contract for the prosecution of a public improvement for the state
of New York for which bids are solicited where the aggregate  amount  of
the  contract  is  under one hundred FIFTY thousand dollars and provided
further, that in a case where the contract is not subject to the  multi-
ple  contract  award  requirements of section one hundred thirty-five of

S. 7654                             8

this article, such requirements may be dispensed with where the head  of
the  state  agency, public benefit corporation or commission finds it to
be in the public interest and where the aggregate amount of the contract
awarded  or to be awarded is less than two hundred thousand dollars. THE
HEAD OF THE STATE AGENCY, PUBLIC BENEFIT CORPORATION OR  COMMISSION,  OR
HIS  OR HER DESIGNEE, SHALL ADJUST THE AGGREGATE CONTRACT AMOUNTS LISTED
IN THIS SUBDIVISION EVERY YEAR TO ACCOUNT FOR INCREASES IN THE COSTS  OF
CONSTRUCTION.  ADVERTISEMENTS  FOR BIDS SHALL PROVIDE INFORMATION ON THE
REQUIREMENTS FOR, OR DISPENSATION OF,  PERFORMANCE  AND  PAYMENT  BONDS.
Provided  further, that in a case where a performance or payment bond is
dispensed with, twenty per centum may be  retained  from  each  progress
payment  or  estimate  until the entire contract work has been completed
and accepted, at which time the head of the state agency, public benefit
corporation or commission shall, pending the payment of the final  esti-
mate,  pay  not  to  exceed seventy-five per centum of the amount of the
retained percentage.
  S 7. Subdivision 4 of section 139-f  of  the  state  finance  law,  as
amended  by  chapter  83  of  the  laws  of  1995, is amended to read as
follows:
  4. Notwithstanding any other provision of this section or  other  law,
requirements  for the furnishing of a performance bond or a payment bond
may be dispensed with at the discretion of the head of the state  agency
or  corporation,  or  his  or  her designee, where the public owner is a
state agency or corporation  described  in  subdivision  one-a  of  this
section  and  the  aggregate  amount  of  the  contract awarded or to be
awarded is under fifty  thousand  dollars  and,  in  a  case  where  the
contract  is  not subject to the multiple contract award requirements of
section one hundred thirty-five of this article, such  requirements  may
be  dispensed  with  where  the  head of the state agency or corporation
finds it to be in the public interest and where the aggregate amount  of
the contract awarded or to be awarded is under [two] THREE hundred thou-
sand  dollars.  THE HEAD OF THE STATE AGENCY, PUBLIC BENEFIT CORPORATION
OR COMMISSION, OR HIS  OR  HER  DESIGNEE,  SHALL  ADJUST  THE  AGGREGATE
CONTRACT  AMOUNTS  LISTED  IN THIS SUBDIVISION EVERY YEAR TO ACCOUNT FOR
INCREASES IN THE COSTS OF CONSTRUCTION. ADVERTISEMENTS  FOR  BIDS  SHALL
PROVIDE  INFORMATION  ON  THE  REQUIREMENTS  FOR,  OR  DISPENSATION  OF,
PERFORMANCE AND PAYMENT BONDS. Provided further, that in a case where  a
performance  or payment bond is dispensed with, twenty per centum may be
retained from  each  progress  payment  or  estimate  until  the  entire
contract work has been completed and accepted, at which time the head of
the  state agency or corporation shall, pending the payment of the final
estimate, pay not to exceed seventy-five per centum of the amount of the
retained percentage.
  S 8. The opening paragraph of section 139-g of the state finance  law,
as  amended  by  chapter  636 of the laws of 2003, is amended to read as
follows:
  In every state agency, department and authority  which  has  let  more
than two million dollars in service and construction contracts AND STATE
ASSISTED PROJECT CONTRACTS in the prior fiscal year, the chief executive
officer  of  that agency, department or authority shall, with respect to
those contracts AND STATE ASSISTED PROJECT CONTRACTS let by his  OR  HER
agency, department or authority:
  S  9. The opening paragraph of subdivision (b) of section 139-g of the
state finance law, as amended by chapter 636 of the  laws  of  2003,  is
amended to read as follows:

S. 7654                             9

  identify  all  small-business  and  certified women and minority-owned
business concerns which, in the judgment of the chief executive  officer
of  that agency, department or authority, can bid on those contracts AND
STATE ASSISTED PROJECT CONTRACTS which are usually and  customarily  let
by  that  agency,  department  or  authority, OR IN WHICH THAT AUTHORITY
PROVIDES A GRANT OR LOAN OR TAX  EXEMPT  FINANCING,  with  a  reasonable
expectation  of  success.  Such chief executive officers shall carry out
the provisions of this subdivision:
  S 10.  Section 139-g of the state finance law is amended by  adding  a
new subdivision (e) to read as follows:
  (E)  FOR  THE PURPOSES OF THIS SECTION, THE FOLLOWING WORDS SHALL HAVE
THE FOLLOWING MEANINGS:
  (I) "STATE ASSISTED PROJECT CONTRACT" SHALL MEAN ANY WRITTEN AGREEMENT
ARISING OUT OF A  STATE  ASSISTED  HOUSING  PROJECT  OR  STATE  ASSISTED
ECONOMIC  DEVELOPMENT PROJECT OR STATE ASSISTED HIGHER EDUCATION PROJECT
OR STATE ASSISTED HOSPITAL OR HEALTH CARE FACILITY  PROJECT,  FOR  WHICH
THE  TOTAL  PROJECT  COST  EXCEEDS TWO MILLION DOLLARS AND FOR WHICH THE
PROJECT OWNER IS COMMITTED TO SPEND OR DOES EXPEND FUNDS FOR THE  ACQUI-
SITION,  CONSTRUCTION,  DEMOLITION,  REPLACEMENT, MAJOR REPAIR, OR RENO-
VATION OF REAL PROPERTY AND IMPROVEMENTS THEREON FOR SUCH PROJECT.
  (II) "STATE ASSISTED HOUSING PROJECT" SHALL MEAN THOSE PROJECTS  WHICH
RECEIVE  FROM  THE  NEW  YORK  STATE  HOUSING  FINANCE AGENCY TAX-EXEMPT
FINANCING FOR ALL OR PART OF THE TOTAL PROJECT COST.
  (III) "STATE ASSISTED ECONOMIC DEVELOPMENT PROJECT" SHALL  MEAN  THOSE
PROJECTS WHICH RECEIVE FROM THE NEW YORK FOUNDATION OF SCIENCE TECHNOLO-
GY  AND INNOVATION, OR THE URBAN DEVELOPMENT CORPORATION AND ITS SUBSID-
IARIES A GRANT OR LOAN OR TAX-EXEMPT FINANCING FOR ALL OR  PART  OF  THE
TOTAL PROJECT COST.
  (IV)  "STATE  ASSISTED  HIGHER  EDUCATION  PROJECT"  SHALL  MEAN THOSE
PROJECTS WHICH RECEIVE FROM THE DORMITORY AUTHORITY OF THE STATE OF  NEW
YORK  A  GRANT  OR  LOAN  OR TAX-EXEMPT FINANCING FOR ALL OR PART OF THE
TOTAL PROJECT COST.
  (V) "STATE ASSISTED HOSPITAL OR HEALTH CARE  FACILITY  PROJECT"  SHALL
MEAN  THOSE  PROJECTS  WHICH RECEIVE FROM THE DORMITORY AUTHORITY OF THE
STATE OF NEW YORK A GRANT OR LOAN OR TAX-EXEMPT  FINANCING  FOR  ALL  OR
PART OF THE TOTAL PROJECT COST.
  S  11.  This  act shall take effect immediately, provided however, the
amendments to article 15-A of the executive law made  by  sections  one,
two, three, four and five of this act shall not affect the expiration of
such article and shall expire therewith.