Enacts the New York state agency MWBE asset management and financial institution strategy

Summary of specific provisions

Amends section 136-b of the state finance law, as added by chapter 261 of the laws of 1988, to define "MWBE asset manager", "MWBE financial institution", "Minority group member", "MWBE", "State agency", as well as the authorities and commissions that will be affected by this legis- lation upon passage. Section 2 of chapter 261 would be added to provide that the Act only applies to such New York State Agencies that meet certain thresholds of asset management, brokerage commissions or other expenditures on financial or professional services in a fiscal year. It would also require such agencies and authorities to establish a MWBE asset management and financial institution strategy including reasonable goals for utilization of MWBE asset managers, MWBE financial insti- tutions, and MWBE financial and professional service firms. These provisions would be further subject to requirements that the business activity procured would be on terms that are consistent with the exist- ing practices of such New York State Agency, that goals set for use of MWBE firms would be subject to market availability and that hiring deci- sions would otherwise be consistent with the decision-maker's fiduciary obligations to the New York State Agency.

Nothing in this subdivision shall be deemed as requiring or permitting any state agency to take any action contrary to the fiduciary duty of the management of such state agency, law, or sound industry practices. As of one year after the passage of this act, the act shall apply to the state agencies and authorities identified therein, and the chief execu- tive officer and or managing body of such state agency shall develop and implement a plan to achieve the objectives set forth in this bill including a method to ensure MWBE firms are made aware of the opportu- nities made available through the program as well as requiring an annual public report, within sixty days of the end of each fiscal year, regard- ing investments, brokerage commissions paid, and expenditures for major financial and professional service categories with MWBE firms as compared to such investments, commissions and expenditures with all firms engaged by the State Agency.

Justification

In 2006, the New York State Department of Economic Development or "NYSDEC" commissioned a study to assist the state in evaluating whether the state's minority and women-owned business enterprise or MWBE initi- atives were still necessary to remedy discrimination in state contract- ing programs. On May 5, 2010, the study was presented to NYSDEC, members of the legislature and other stakeholders. The study's findings indi- cated that: (a) there is both statistical and anecdotal evidence of business discrimination against MWBEs in the private sector of the New York State market area; (b) there is evidence of discrimination against MWBEs in New York State market area in the small business credit market; (c) MWBEs in the state's market area report suffering business related discrimination in large numbers and with statistically significant greater frequency than non-MWBEs; and (d) in general, minorities and women reported that race- and gender-conscious contracting programs are needed to ensure full and fair access to government contracts because being certified created opportunities that otherwise would not have presented themselves.

New York State has historically held a competitive advantage as the center of the worldwide financial services industry. New York State financial service firms have been key providers of employment opportu- nities for New York residents and critical generators of tax revenue both for New York State and its local governments. As an economic devel- opment matter, fostering a strong financial services industry that includes meaningful participation by MWBE firms is an important objec- tive. In addition, the legislature anticipates that increasing state contracting opportunities and increasing capital access to underserved regions and to underserved groups such as minority and women-owned busi- ness enterprises, will increase employment opportunities for New York state residents.

Prior legislative history

None.

Fiscal implications

To be determined.

Effective date

This act shall take effect on the ninetieth day after it shall have become law.