Bill Text: NY A09259 | 2021-2022 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Requires post completion certifications to be completed, under penalty of perjury, that the MWBE performed the work, performed the services, or delivered the materials; requires that the division of minority and women's business development create an internet registry, and perform inspections of MWBEs to weed out fraud and abuse; requires that additional regulations be adopted related to revocations of certifications for felony convictions for fraudulently misrepresenting the status of an MWBE; permits a court to issue fines double the amount that should have been paid to an MWBE upon conviction for felony fraud related to the MWBE program.

Spectrum: Partisan Bill (Democrat 11-0)

Status: (Passed) 2022-10-06 - approval memo.18 [A09259 Detail]

Download: New_York-2021-A09259-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          9259

                   IN ASSEMBLY

                                    February 9, 2022
                                       ___________

        Introduced by M. of A. PEOPLES-STOKES, BICHOTTE HERMELYN, COOK, HYNDMAN,
          WALKER,  SEAWRIGHT  --  Multi-Sponsored by -- M. of A. GALEF, SIMON --
          read once and referred to the Committee on Governmental Operations

        AN ACT to amend the executive law and the state finance law, in relation
          to minority  and  women-owned  business  enterprises  post  completion
          certification,  duties  of  the director and creating the minority and
          women-owned business enterprise fund

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. The executive law is amended by adding a new section 314-a
     2  to read as follows:
     3    § 314-a. Post completion certification. The director, in collaboration
     4  with the division of minority and women's business development  and  the
     5  department  of  small  business  services,  shall  develop the following
     6  standardized certification forms that must be completed under penalty of
     7  perjury prior to the prime contractor being paid:
     8    1. certification from a representative of the  prime  contractor  that
     9  the  minority  or  women-owned business enterprise in fact performed the
    10  services or provided the materials that they were contracted to  perform
    11  or provide; and
    12    2.  certification from a representative of the minority or women-owned
    13  business enterprise that they in fact performed the services or provided
    14  the materials that they were contracted to perform or provide.
    15    § 2. Paragraphs (f) and (j) of subdivision 3 of  section  311  of  the
    16  executive law, as amended by chapter 96 of the laws of 2019, are amended
    17  and three new paragraphs (l), (m) and (n) are added to read as follows:
    18    (f)  to  prepare  and  update,  no  less than annually, a directory of
    19  certified minority and women-owned  business  enterprises  which  shall,
    20  wherever  practicable,  be  divided  into categories of labor, services,
    21  supplies, equipment, materials and recognized  construction  trades  and
    22  which  shall  indicate areas or locations of the state where such enter-
    23  prises are available to perform services, and to use this information to
    24  create an internet based, searchable, centralized state registry detail-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03040-03-2
        A. 9259                             2

     1  ing certifications, denials, waivers and all documents submitted  during
     2  the life of the contract;
     3    (j)  to  make  publicly available records of all waivers of compliance
     4  reported pursuant to paragraph (b) of subdivision six of  section  three
     5  hundred thirteen of this article on the division's website[.];
     6    (l) to perform inspections of minority or women-owned business's place
     7  of business, warehouse or storage facility to confirm the existence of a
     8  workforce, equipment and supplies;
     9    (m)  to perform inspections of financial records of minority or women-
    10  owned business enterprises to ensure such enterprises are in  compliance
    11  with applicable laws; and
    12    (n)  to  ensure  the  protection  of  individuals who report suspected
    13  violations of this article and applicable laws related to  minority  and
    14  women-owned business enterprises.
    15    §  3.  Paragraph  (j) of subdivision 3 of section 311 of the executive
    16  law, as amended by chapter 825 of the laws of 2021, is amended  to  read
    17  as follows:
    18    (j)  to  make  publicly available records of all waivers of compliance
    19  reported pursuant to paragraph (b) of subdivision six of  section  three
    20  hundred thirteen of this article on the division's website; [and]
    21    §  4. Subdivision 1 of section 314 of the executive law, as amended by
    22  chapter 96 of the laws of 2019, is amended to read as follows:
    23    1. The director shall promulgate rules and regulations  providing  for
    24  the  establishment  of a statewide certification program including rules
    25  and regulations governing the approval, denial or revocation of any such
    26  certification including revocations  for  convictions  for  fraudulently
    27  misrepresenting  the  status  of minority or women-owned business enter-
    28  prises. Such rules shall set forth the maximum personal net worth  of  a
    29  minority group member or woman who may be relied upon to certify a busi-
    30  ness  as  a  minority-owned  business enterprise or women-owned business
    31  enterprise with a  minimum  personal  net  worth  threshold  of  fifteen
    32  million  dollars,  and may thereafter establish different maximum levels
    33  of personal net worth for minority group members and women on an  indus-
    34  try-by-industry  basis  for such industries as the director shall deter-
    35  mine. Such regulations relating to the classification of  the  industry-
    36  by-industry  personal  net  worth  thresholds  above the fifteen million
    37  dollar threshold shall consider the personal net worth of the owners  of
    38  both  certified  and non-certified businesses, including but not limited
    39  to, prime contractors and subcontractors, as  well  as  any  such  other
    40  factors  needed to establish such thresholds. Such rules and regulations
    41  shall include, but not be limited to, such matters as may be required to
    42  ensure that the established procedures thereunder shall at least  be  in
    43  compliance  with  the code of fair procedure set forth in section seven-
    44  ty-three of the civil rights law, and consistent with the provisions  of
    45  article twenty-three-A of the correction law.
    46    §  5.  Section  316 of the executive law, as amended by chapter 175 of
    47  the laws of 2010, is amended to read as follows:
    48    § 316. Enforcement. 1. Upon receipt by the director of a complaint  by
    49  a  contracting agency that a contractor has violated the provisions of a
    50  state contract which have been included to comply with the provisions of
    51  this article or of a contractor that a contracting agency  has  violated
    52  such provisions or has failed or refused to issue a waiver where one has
    53  been  applied  for  pursuant to subdivision six of section three hundred
    54  thirteen of this article or has denied such  application,  the  director
    55  shall  attempt  to  resolve the matter giving rise to such complaint. If
    56  efforts to resolve such matter to the satisfaction of  all  parties  are
        A. 9259                             3

     1  unsuccessful, the director shall refer the matter, within thirty days of
     2  the  receipt  of the complaint, to the division's hearing officers. Upon
     3  conclusion of the administrative  hearing,  the  hearing  officer  shall
     4  submit  to  the  director  his  or  her  decision  regarding the alleged
     5  violation of the contract and recommendations regarding  the  imposition
     6  of  sanctions,  fines  or  penalties.  The  director, within ten days of
     7  receipt of the decision, shall file a determination of such  matter  and
     8  shall cause a copy of such determination along with a copy of this arti-
     9  cle to be served upon the contractor by personal service or by certified
    10  mail return receipt requested. The decision of the hearing officer shall
    11  be  final  and  may  only  be vacated or modified as provided in article
    12  seventy-eight of the civil practice law and rules  upon  an  application
    13  made  within the time provided by such article. The determination of the
    14  director as to the imposition of any fines, sanctions or penalties shall
    15  be reviewable pursuant to article seventy-eight of  the  civil  practice
    16  law and rules. The penalties imposed for any violation which is premised
    17  upon  either  a  fraudulent  or  intentional  misrepresentation  by  the
    18  contractor or the contractor's willful and intentional disregard of  the
    19  minority  and  women-owned  participation  requirement  included  in the
    20  contract may include a determination that the contractor shall be ineli-
    21  gible to submit a bid to any contracting agency or be awarded  any  such
    22  contract  for a period not to exceed one year following the final deter-
    23  mination; provided however, if a contractor has previously  been  deter-
    24  mined  to  be  ineligible  to submit a bid pursuant to this section, the
    25  penalties imposed for any subsequent violation, if such violation occurs
    26  within five years of the first violation, may  include  a  determination
    27  that the contractor shall be ineligible to submit a bid to any contract-
    28  ing  agency  or  be awarded any such contract for a period not to exceed
    29  five years following the final determination. The division  of  minority
    30  and  women's  business  development shall maintain a website listing all
    31  contractors that have been deemed ineligible to submit a bid pursuant to
    32  this section and the date after which each contractor shall  once  again
    33  become eligible to submit bids.
    34    2.  Any  fines,  or portion thereof, imposed pursuant to the foregoing
    35  subdivision, or imposed by a court of competent jurisdiction related  to
    36  convictions involving fraud related to this article or otherwise involv-
    37  ing  a  minority  or women-owned business enterprise, may be required by
    38  the entity imposing such fines to be paid to  the  minority  and  women-
    39  owned  business  enterprise fund established pursuant to section ninety-
    40  seven-k of the state finance law.
    41    § 6. The state finance law is amended by adding a new section 97-k  to
    42  read as follows:
    43    § 97-k. Minority and women-owned business enterprise fund. 1. There is
    44  hereby established in the joint custody of the state comptroller and the
    45  commissioner  of  taxation and finance a special fund to be known as the
    46  "minority and women-owned business enterprise fund".
    47    2. Such funds shall consist of all moneys appropriated for the purpose
    48  of such fund, all moneys transferred or paid to such  fund  pursuant  to
    49  law,  including  pursuant to section three hundred sixteen of the execu-
    50  tive law, and contributions consisting of grants,  including  grants  or
    51  other  financial assistance from any agency of government and all moneys
    52  required by the provisions of this section or any other law to  be  paid
    53  into or credited to this fund.
    54    3.  Monies  of  the  fund, following appropriation by the legislature,
    55  shall be expended to acquire software, employ personnel to audit, inves-
    56  tigate and prosecute minority and women-owned business enterprise  fraud
        A. 9259                             4

     1  and  to underwrite minority and women-owned business enterprise programs
     2  to assist minority and  women  business  enterprise  owners  to  develop
     3  sustainable businesses.
     4    §  7.  This act shall take effect immediately; provided, however, that
     5  the amendments to subdivision 3 of section 311 of the executive law made
     6  by section three of this act shall take effect on the same date  and  in
     7  the  same  manner as chapter 825 of the laws of 2021; provided, further,
     8  that the amendments to  article  15-A  of  the  executive  law  made  by
     9  sections one, two, three, four and five of this act shall not affect the
    10  repeal of such article and shall be deemed repealed therewith.