S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7787
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 15, 2023
                                ___________
 
 Introduced  by M. of A. SIMON -- read once and referred to the Committee
   on Governmental Operations
 
 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,  paragraph (g) of subdivision 3 as amended by section 1 of part BB
 of chapter 59 of the laws of 2006, paragraphs (h) and (i) of subdivision
 3 as amended and paragraph (k) of subdivision 3 as added by chapter  825
 of  the laws of 2021, paragraphs (f) and (j) of subdivision 3 as amended
 and paragraphs (l), (m) and (n) of subdivision 3 as added by chapter 567
 of the laws of 2022, subdivision 4 as amended by chapter 361 of the laws
 of 2009 and the opening paragraph of subdivision 4 as amended and  para-
 graph (d-1) of subdivision 3 and paragraphs (d) and (e) of subdivision 4
 as  added  by  chapter  96  of  the laws of 2019, 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;

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07382-01-3
 A. 7787                             2
              

 
   (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-
 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  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 TO CERTIFIED MINORITY OR WOMEN-OWNED  BUSINESS  ENTER-
 PRISES,  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;
   (d-1) to require all contracting state agencies to develop a four-year
 growth  plan  to  determine  a means of promoting and increasing partic-
 ipation by [minority-owned] MINORITY  and  women-owned  business  enter-
 prises  with  respect  to  state  contracts and subcontracts. Every four
 years,  beginning  September  fifteenth,  two  thousand   twenty,   each
 contracting state agency shall submit a four-year growth plan as part of
 its  annual  report  to the governor and legislature pursuant to section
 one hundred sixty-four of this chapter[.];
   (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 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, 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;
 A. 7787                             3
 
   (E-1) 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;
   (f) to prepare and update, [no less than annually,] QUARTERLY a direc-
 tory 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 enterprises are available to perform  services,  and  to  use  this
 information  to  create an internet based, searchable, centralized state
 registry detailing certifications, waivers, and all documents  submitted
 pertaining  to  certification  or denial of certification, or compliance
 with goals for utilization of minority and women-owned  business  enter-
 prises;
   (g)  to  appoint independent hearing officers who by contract or terms
 of employment shall  preside  over  adjudicatory  hearings  pursuant  to
 section  three  hundred  fourteen of this article for the office and who
 are assigned no other work by the office;
   (h) notwithstanding the provisions of section two  hundred  ninety-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 para-
 graph (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;
   (i) to streamline the state certification process  to  accept  federal
 and municipal corporation certifications;
   (j)  to  make  publicly available records of all waivers of compliance
 reported pursuant to paragraph (b) of subdivision six of  section  three
 hundred thirteen of this article on the division's website;
   (k)  to  work in conjunction with the industrial commissioner pursuant
 to paragraph (j) of subdivision one of section eight hundred  eleven  of
 the  labor  law  to  assist  contractors  in  identifying minority group
 members and women who are  participating  in  apprenticeship  agreements
 under article twenty-three of the labor law[.];
   (l) to perform inspections of minority or women-owned business's place
 of business, warehouse or storage facility to confirm the existence of a
 workforce, equipment and supplies;
   (m)  to perform inspections of financial records of minority or women-
 owned business enterprises to ensure such enterprises are in  compliance
 with applicable laws; and
   (n)  to  ensure  the  protection  of  individuals who report suspected
 violations of this article and applicable laws related to  minority  and
 women-owned business enterprises.
   4.  The director 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, managerial and
 financial, and general business assistance; training; marketing;  organ-
 ization  and personnel skill development; project management assistance;
 technology assistance; bond  and  insurance  education  assistance;  and
 other  business  development  assistance.  The director shall maintain a
 toll-free number at the department of economic development to be used to
 answer questions concerning the MWBE certification process. In addition,
 A. 7787                             4
 
 the director [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[.];
   (d) conduct outreach events, training workshops, seminars,  and  other
 such  educational  programs throughout the state, including all regional
 offices, to state agencies, external stakeholders, and  the  public,  to
 promote  awareness  and utilization of minority and women-owned business
 enterprises; and
   (e) identify and establish mentorship opportunities and other business
 development programs to increase capacity and better prepare  MWBEs  for
 bidding  on  contracts with state agencies upon successful completion of
 the mentorship  opportunity.  Such  mentorship  opportunities  shall  be
 intended  to  ensure  that  mentor  and  mentee are connected based on a
 commercially useful function.
   § 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.
   § 3. Subdivisions 2-a, 3 and paragraph (a) of subdivision 5 of section
 313  of the executive law, as amended by chapter 96 of the laws of 2019,
 are amended to read as follows:
   2-a. The director shall promulgate rules  and  regulations  that  will
 accomplish the following:
   (a)  provide for the certification and decertification of minority and
 women-owned business enterprises for all agencies through a single proc-
 ess that meets applicable requirements;
   (b) require that each contract solicitation document accompanying each
 solicitation set forth the expected degree of minority  and  women-owned
 business enterprise participation based, in part, on:
   (i)  the  potential  subcontract  opportunities available in the prime
 procurement contract;
 A. 7787                             5
 
   (ii) the availability, as contained within  the  study,  of  certified
 minority  and  women-owned business enterprises to respond competitively
 to the potential subcontract opportunities as  reflected  in  the  divi-
 sion's  directory  of certified minority and women-owned business enter-
 prises; and
   (iii) the findings of the disparity study;
   (c)  require  that  each  agency  provide  a current list of certified
 minority business enterprises to each prospective contractor  or  direct
 them  to  the division's directory of certified minority and women-owned
 business enterprises for such purpose;
   (d) allow a contractor that is a certified  [minority-owned]  MINORITY
 or  women-owned  business enterprise to use the work it performs to meet
 requirements for use of certified [minority-owned]  MINORITY  or  women-
 owned business enterprises as subcontractors;
   (e)  establish  criteria  for  agencies to credit the participation of
 minority and women-owned business enterprises towards the achievement of
 the minority and women-owned business enterprise participation goals  on
 a  state  contract based on the commercially useful function provided by
 each minority and women-owned business enterprise on the contract;
   (f) provide for joint ventures, which a bidder may count toward  meet-
 ing its minority and women-owned business enterprise participation;
   (g)  consistent  with  subdivision  six  of  this section, provide for
 circumstances under  which  an  agency  may  waive  obligations  of  the
 contractor  relating  to  minority  and  women-owned business enterprise
 participation;
   (h) require that an agency verify that minority and women-owned  busi-
 ness  enterprises  listed in a successful bid are actually participating
 to the extent listed in the project for which the bid was submitted;
   (i) provide for the collection of  statistical  data  by  each  agency
 concerning  actual  minority and women-owned business enterprise partic-
 ipation;
   (j) require each agency to consult the most  current  disparity  study
 when  calculating  agency-wide and contract specific participation goals
 pursuant to this article; [and]
   (K)  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; AND
   Such rules shall set forth the maximum personal net worth of a minori-
 ty group member or woman who may be relied upon to certify a business as
 a minority-owned business enterprise or women-owned business enterprise,
 and may establish different maximum levels of  personal  net  worth  for
 minority  group  members  and women on an industry-by-industry basis for
 such industries as the director shall determine. Such regulations relat-
 ing to the classification of the industry-by-industry personal net worth
 thresholds above the fifteen million dollar threshold shall consider the
 personal net worth of the owners of  both  certified  and  non-certified
 businesses,  including but not limited to, prime contractors and subcon-
 tractors, as well as any such other factors  needed  to  establish  such
 thresholds. The provisions of the regulations pertaining to personal net
 worth  shall,  to the extent practicable, be implemented by June thirti-
 eth, two thousand twenty and shall consider  adjustments  for  inflation
 annually on January first of the previous year according to the consumer
 price index.
   3.  Solely for the purpose of providing the opportunity for meaningful
 participation by  certified  businesses  in  the  performance  of  state
 A. 7787                             6
 
 contracts  as  provided  in  this section, state contracts shall include
 leases of real property by a state agency to a lessee where:  the  terms
 of  such  leases  provide for the construction, demolition, replacement,
 major  repair or renovation of real property and improvements thereon by
 such lessee; and the cost of such construction, demolition, replacement,
 major repair or renovation of real  property  and  improvements  thereon
 shall  exceed  the  sum  of one hundred thousand dollars. Reports to the
 director pursuant to section three hundred fifteen of this article shall
 include activities with respect to all such state contracts. Contracting
 agencies shall include or require to be included with respect  to  state
 contracts  for  the  acquisition, construction, demolition, 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, includ-
 ing, but not limited to: (a) provisions requiring contractors to make  a
 good faith effort to solicit active participation by enterprises identi-
 fied in the directory of certified businesses; (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 article; and (c)
 requiring the contractor to include the provisions set  forth  in  para-
 graphs  (a) and (b) of this subdivision 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 in a good faith effort to achieve the  maxi-
 mum  feasible  participation  by  minority and [women owned] WOMEN-OWNED
 business enterprises adopted pursuant to  this  article  and  the  regu-
 lations  of  the  director.  Such rules and regulations: shall require a
 contractor to submit a utilization plan [after bids are opened]  AT  THE
 TIME 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 six of
 this section on the website of the contracting agency; 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 relating to the opera-
 tion 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 partic-
 ipation  requirements  pursuant  to  subdivisions  six and seven of this
 section; shall allow a contractor to file a complaint with the  director
 pursuant to subdivision eight 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 nine of this
 section in the event a contractor is failing or  has  failed  to  comply
 A. 7787                             7

 with  the  minority  and  women-owned  business enterprise participation
 requirements set forth in the state contract where no  waiver  has  been
 granted.
   §  4.  Subdivisions  1  and  3 of section 315 of the executive law, as
 amended by chapter 96 of the laws  of  2019,  are  amended  to  read  as
 follows:
   1.  Each  contracting agency shall be responsible for monitoring state
 contracts under its jurisdiction, and recommending matters to the office
 respecting non-compliance with the provisions of this  article  so  that
 the  office  [may]  SHALL take such action as [is appropriate] STATED IN
 SUBDIVISION FOUR OF SECTION THREE HUNDRED SIXTEEN OF THIS ARTICLE.  EACH
 CONTRACTING  AGENCY  SHALL HAVE THE RIGHT TO RECOMMEND THAT THE DIRECTOR
 IMPOSE A SANCTION, PENALTY, OR FINE FOR  THREE  OR  MORE  VIOLATIONS  OF
 SECTION THREE HUNDRED SIXTEEN OF THIS ARTICLE, to ensure compliance with
 the  provisions of this article, the rules and regulations of the direc-
 tor issued hereunder and the contractual provisions required pursuant 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 article.
   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  no  later  than May fifteenth of every year and shall include
 such information as is necessary for the director to  determine  whether
 the contracting agency and any contractor to the contracting agency have
 complied  with  the purposes of this article, including, without limita-
 tion, a summary of all waivers of the requirements of  subdivisions  six
 and  seven  of section three hundred thirteen of this article allowed by
 the contracting agency during the period covered by the report,  includ-
 ing  a  description of the basis of the waiver request and the rationale
 for granting any such waiver and any instances  in  which  the  contract
 agency has deemed a contractor to have committed a violation pursuant to
 section three hundred sixteen of this article and such other information
 as  the  director  shall require. Each agency shall also include in such
 annual report whether or not it has been required to prepare a  remedial
 plan,  and,  if  so,  the  plan  and  the extent to which the agency has
 complied with each element of the plan.]  (A)  EACH  CONTRACTING  AGENCY
 SHALL  PREPARE  A QUARTERLY REPORT AND SUBMIT COPIES TO THE COMMISSIONER
 OF ECONOMIC DEVELOPMENT, THE COMMISSIONER OF GENERAL SERVICES,  AND  THE
 DIRECTOR  AS  TO  THE  LEVEL OF MINORITY AND WOMEN-OWNED BUSINESS ENTER-
 PRISES 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 SUCH 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 MINOR-
 ITY OR WOMEN-OWNED BUSINESS ENTERPRISES, AND THE  MAXIMUM  AMOUNT  OBLI-
 GATED  PURSUANT TO SUCH 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  EMPLOY-
 MENT GOALS REQUIRED BY THE CONTRACTS HAVE BEEN GRANTED;
 A. 7787                             8
 
   (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.
   (C)  WITHIN  THIRTY  DAYS  AFTER  COMPLETION,  A COPY OF THE QUARTERLY
 MINORITY 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.
   (D) 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:
   (I) THAT THE FAILURE TO FILE A REPORT AS REQUIRED IS  A  VIOLATION  OF
 THIS  SECTION, OR IN CASE OF AN INSUFFICIENT REPORT, THE MANNER IN WHICH
 THE REPORT SUBMITTED IS DEFICIENT;
   (II) THAT THE CONTRACTING AGENCY HAS THIRTY DAYS TO COMPLY  WITH  THIS
 SECTION  OR  PROVIDE AN ADEQUATE WRITTEN EXPLANATION TO THE COMMISSIONER
 OF ECONOMIC DEVELOPMENT, THE COMMISSIONER OF GENERAL  SERVICES  AND  THE
 DIRECTOR  OF  THE  CONTRACTING  AGENCY'S  REASONS  FOR  THE INABILITY TO
 COMPLY; AND
   (III) THAT THE  CONTRACTING  AGENCY'S  CONTINUED  FAILURE  TO  PROVIDE
 EITHER  THE REQUIRED REPORT OR AN ADEQUATE EXPLANATION WILL RESULT IN AN
 INDEPENDENT AUDIT OF THE CONTRACTING AGENCY, THE COST OF WHICH SHALL  BE
 BORNE BY THE CONTRACTING AGENCY.
   §  5.  Section  316 of the executive law, as amended by chapter 567 of
 the laws of 2022, is amended to read as follows:
   § 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  six of section three hundred thirteen of this
 article or has denied such application, the director  shall  attempt  to
 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 division's hearing officers.  Upon  conclusion  of
 the  administrative  hearing,  the  hearing  officer shall submit to the
 A. 7787                             9
 
 director his or her decision regarding  the  alleged  violation  of  the
 contract  and  recommendations  regarding  the  imposition of sanctions,
 fines or penalties. The director, within ten  days  of  receipt  of  the
 decision,  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  contractor  by  personal service or by certified mail
 return receipt requested. The decision of the hearing officer  shall  be
 final  and may only be vacated or modified as provided in article seven-
 ty-eight of the civil practice law and rules upon  an  application  made
 within  the  time  provided  by  such  article. The determination of the
 director as to the imposition of any fines, sanctions or penalties shall
 be reviewable pursuant to article seventy-eight of  the  civil  practice
 law and rules. The penalties imposed for any violation which is premised
 upon  either  a  fraudulent  or  intentional  misrepresentation  by  the
 contractor or the contractor's willful and intentional disregard of  the
 minority  and  women-owned  participation  requirement  included  in the
 contract may include a determination that the contractor shall be ineli-
 gible to submit a bid to any contracting agency or be awarded  any  such
 contract  for a period not to exceed one year following the final deter-
 mination; provided however, if a contractor has previously  been  deter-
 mined  to  be  ineligible  to submit a bid pursuant to this section, the
 penalties imposed for any subsequent violation, if such violation occurs
 within five years of the first violation, may  include  a  determination
 that the contractor shall be ineligible to submit a bid to any contract-
 ing  agency  or  be awarded any such contract for a period not to exceed
 five years following the final determination. The division  of  minority
 and  women's  business  development shall maintain a website listing all
 contractors that have been deemed ineligible to submit a bid pursuant to
 this section and the date after which each contractor shall  once  again
 become eligible to submit bids.
   [2.] 3. Any fines, or portion thereof, imposed pursuant to the forego-
 ing subdivision, or imposed by a court of competent jurisdiction related
 to  convictions  involving  fraud  related  to this article or otherwise
 involving a minority or women-owned business enterprise, may be required
 by the entity imposing such fines to be paid to the minority and  women-
 owned  business  enterprise fund established pursuant to section ninety-
 seven-k of the state finance law.
   4. THE DIRECTOR SHALL IMPOSE A SANCTION, PENALTY, OR FINE ON ANY INDI-
 VIDUAL OR ENTITY THAT HAS THREE OR MORE VIOLATIONS OF THIS ARTICLE WITH-
 IN FIVE YEARS. SUCH FINE SHALL BE PAID BY  SUCH  INDIVIDUAL  OR  ENTITY.
 NOTWITHSTANDING  THE  PROVISIONS  OF  SUBDIVISION THREE OF THIS SECTION,
 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.
   §  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
 A. 7787                            10
 
 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
 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.
   §  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
 A. 7787                            11

 estimate, pay not to exceed seventy-five per centum of the amount of the
 retained percentage.
   §  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:
   § 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:
   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:
   §  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 TERMS  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, TECHNOL-
 OGY 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.
   §  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 be deemed repealed therewith.