S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2496
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 17, 2025
                                ___________
 
 Introduced by M. of A. McDONALD, BURDICK, SIMON, HEVESI, GLICK, WOERNER,
   DeSTEFANO,  DAVILA,  REYES, BENDETT, HYNDMAN -- read once and referred
   to the Committee on Governmental Operations
 
 AN ACT to amend the state finance law, in relation to  preferred  source
   status  for  entities  that provide employment and services to certain
   persons

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 1 of section 162 of the state finance law, as
 added by chapter 83 of the laws of 1995, is amended to read as follows:
   1. Purpose. To advance special social  and  economic  goals,  selected
 providers  shall  have  preferred  source  status  for  the  purposes of
 procurement in accordance with the provisions of this section.  Procure-
 ment from  these  providers  shall  be  exempted  from  the  competitive
 procurement  provisions of section one hundred sixty-three of this arti-
 cle and other competitive procurement  statutes.  Such  exemption  shall
 apply  to  commodities  produced,  manufactured  or assembled, including
 those repackaged, ASSEMBLED OR FULFILLED to meet the form, function  and
 utility  required  by  state  agencies,  in New York state and, where so
 designated, services provided by those sources in accordance  with  this
 section.
   §  2. Paragraph d of subdivision 2 of section 162 of the state finance
 law, as amended by chapter 565 of the laws of 2022, is amended  to  read
 as follows:
   d.  Commodities and services produced by any qualified charitable non-
 profit-making agency for other disabled persons AND/OR  FORMERLY  INCAR-
 CERATED PERSONS approved for such purposes by the commissioner of educa-
 tion, or incorporated under the laws of this state and approved for such
 purposes by the commissioner of education;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02990-01-5
 A. 2496                             2
 
              

   §  2-a.  Paragraph  d  of  subdivision  2  of section 162 of the state
 finance law, as amended by chapter 501 of the laws of 2002,  is  amended
 to read as follows:
   d.  Commodities and services produced by any qualified charitable non-
 profit-making agency for other severely disabled persons AND/OR FORMERLY
 INCARCERATED PERSONS approved for such purposes by the  commissioner  of
 education, or incorporated under the laws of this state and approved for
 such purposes by the commissioner of education;
   § 3. Subparagraph (iii) of paragraph a of subdivision 4 of section 162
 of the state finance law, as amended by chapter 565 of the laws of 2022,
 is amended to read as follows:
   (iii) When commodities are available, in the form, function and utili-
 ty  required by, a state agency or political subdivision or public bene-
 fit corporation having their own purchasing agency, and such commodities
 are not available pursuant to subparagraphs (i) and (ii) of  this  para-
 graph,  said  commodities  shall then be purchased from a qualified non-
 profit-making agency for other disabled persons AND/OR  FORMERLY  INCAR-
 CERATED PERSONS, a qualified special employment program for mentally ill
 persons,  or  a  qualified  veterans'  entity;  provided,  however,  the
 preferred source shall perform fifty percent or more of the work;
   § 3-a. Subparagraph (iii) of paragraph a of subdivision 4  of  section
 162  of  the  state  finance  law, as added by chapter 83 of the laws of
 1995, is amended to read as follows:
   (iii) When commodities are available, in the form, function and utili-
 ty required by, a state agency or political subdivision or public  bene-
 fit corporation having their own purchasing agency, and such commodities
 are  not  available pursuant to subparagraphs (i) and (ii) of this para-
 graph, said commodities shall then be purchased from  a  qualified  non-
 profit-making agency for other severely disabled persons AND/OR FORMERLY
 INCARCERATED PERSONS, a qualified special employment program for mental-
 ly ill persons, or a qualified veterans' workshop;
   §  4. The opening paragraph of paragraph b of subdivision 4 of section
 162 of the state finance law, as amended by chapter 565 of the  laws  of
 2022, is amended to read as follows:
   When  services  are  available,  in  the  form,  function  and utility
 required by, a state agency or political subdivision or  public  benefit
 corporation  having their own purchasing agency, equal priority shall be
 accorded the services rendered and offered for sale  by  qualified  non-
 profit-making  agencies for the blind and those for [the] other disabled
 PERSONS AND/OR  FORMERLY  INCARCERATED  PERSONS,  by  qualified  special
 employment  programs for mentally ill persons and by qualified veterans'
 entities; provided, however, the preferred source  shall  perform  fifty
 percent or more of the work. In the case of services:
   §  4-a.  The  opening  paragraph  of  paragraph  b of subdivision 4 of
 section 162 of the state finance law, as added by chapter 83 of the laws
 of 1995,  is amended to read as follows:
   When services  are  available,  in  the  form,  function  and  utility
 required  by,  a state agency or political subdivision or public benefit
 corporation having their own purchasing agency, equal priority shall  be
 accorded  the  services  rendered and offered for sale by qualified non-
 profit-making agencies for the blind and those for [the] other  severely
 disabled  PERSONS  AND/OR  FORMERLY  INCARCERATED  PERSONS, by qualified
 special employment programs for mentally ill persons  and  by  qualified
 veterans' workshops. In the case of services:
   § 5. Subdivision 6 of section 162 of the state finance law, as amended
 by chapter 565 of the laws of 2022, is amended to read as follows:
 A. 2496                             3
 
   6.  Prices  charged  by agencies for the blind, other disabled PERSONS
 AND/OR FORMERLY INCARCERATED PERSONS and veterans' entity.
   a.  Except  with respect to the correctional industries program of the
 department of corrections and community supervision,  it  shall  be  the
 duty of the commissioner to determine, and from time to time review, the
 prices  of  all  commodities  and  to  approve the price of all services
 provided by preferred sources as specified in this  section  offered  to
 state  agencies,  political  subdivisions or public benefit corporations
 having their own purchasing office. The commissioner's price review  and
 approval shall not be required for any purchases below one hundred thou-
 sand dollars.
   b.  In  determining  and  revising  the  prices of such commodities or
 services, consideration shall be given to the reasonable costs of labor,
 materials and overhead necessarily incurred by  such  preferred  sources
 under  efficient  methods  of  procurement,  production, performance and
 administration; however, the prices of such products and services  shall
 be  as  close to prevailing market price as practicable, but in no event
 greater than fifteen percent above the prevailing market prices for  the
 same or equivalent commodities or services.
   c.  Such qualified charitable non-profit-making agencies for the blind
 and other disabled PERSONS AND/OR FORMERLY INCARCERATED PERSONS may make
 purchases of materials, equipment or supplies, except printed  material,
 from centralized contracts for commodities in accordance with the condi-
 tions set by the office of general services; provided that the qualified
 charitable  non-profit-making  agency  for  the  blind or other disabled
 PERSONS AND/OR FORMERLY INCARCERATED PERSONS shall accept sole responsi-
 bility for any payment due the vendor.
   d. Such qualified charitable non-profit-making agencies for the  blind
 and other disabled PERSONS AND/OR FORMERLY INCARCERATED PERSONS may make
 purchases of materials, equipment and supplies directly from the correc-
 tional   industries   program   administered   by  the  commissioner  of
 corrections and community supervision, subject to such rules as  may  be
 established  from  time to time pursuant to the correction law; provided
 that the qualified charitable non-profit-making agency for the blind  or
 other disabled PERSONS AND/OR FORMERLY INCARCERATED PERSONS shall accept
 sole  responsibility  for  any payment due the department of corrections
 and community supervision.
   e. The commissioner of the office  of  children  and  family  services
 shall  appoint  the  New  York  state commission for the blind, or other
 non-profit-making agency, other than the agency representing [the] other
 disabled PERSONS AND/OR FORMERLY INCARCERATED PERSONS, to facilitate the
 distribution of  orders  among  qualified  non-profit-making  charitable
 agencies  for  the  blind.  The  state  commissioner  of education shall
 appoint a non-profit-making agency, other than the  agency  representing
 the  blind,  to  facilitate  the  distribution of orders among qualified
 non-profit-making charitable agencies for [the] other  disabled  PERSONS
 AND/OR  FORMERLY  INCARCERATED  PERSONS  and the veterans' entities. The
 state commissioner of mental health shall facilitate the distribution of
 orders among qualified special employment programs operated or  approved
 by the office of mental health serving mentally ill persons.
   f.  The  commissioner  may  request  the  state comptroller to conduct
 audits and examinations to be made of all records, books and data of any
 agency for the blind or [the] other  disabled  PERSONS  AND/OR  FORMERLY
 INCARCERATED  PERSONS,  any  special employment program for mentally ill
 persons or any veterans' entity qualified under this section  to  deter-
 mine  the  costs  of  manufacture  or  the rendering of services and the
 A. 2496                             4
 
 manner and efficiency of production and administration of such agency or
 special employment program or veterans'  entity  with  relation  to  any
 product or services purchased by a state agency or political subdivision
 or  public  benefit corporation and to furnish the results of such audit
 and examination to the commissioner for such action as [he or  she]  THE
 COMMISSIONER may deem appropriate under this section.
   § 6. This act shall take effect immediately; provided, however, that:
   (a)  the  amendment  to paragraph d of subdivision 2 of section 162 of
 the state finance law made by section two of this act shall  be  subject
 to  the expiration and reversion of such paragraph pursuant to section 4
 of chapter 565 of the laws of 2022, as amended, when upon such date  the
 provisions of section two-a of this act shall take effect;
   (b)  the amendment to subparagraph (iii) of paragraph a of subdivision
 4 of section 162 of the state finance law made by section three of  this
 act  shall  be  subject to the expiration and reversion of such subpara-
 graph pursuant to section 4 of chapter 565  of  the  laws  of  2022,  as
 amended,  when  upon such date the provisions of section three-a of this
 act shall take effect; and
   (c) the amendments to the opening paragraph of paragraph b of subdivi-
 sion 4 of section 162 of the state finance law made by section  four  of
 this  act shall be subject to the expiration and reversion of such para-
 graph pursuant to section 4 of chapter 565  of  the  laws  of  2022,  as
 amended,  when  upon  such date the provisions of section four-a of this
 act shall take effect.