What's happening
This bill expedites state payments to minority, women, veteran, and disabled-owned businesses and strengthens diversity requirements in state procurement and employment.
Why it matters
Accelerates critical cash flow for underrepresented businesses. By requiring state agencies to pay minority, women, service-disabled veteran, and certain disabled-owned businesses within 15 days (rather than the standard 30), the bill aims to help these enterprises manage cash flow, reduce financial risk, and remain competitive, especially since late payments can be a major barrier to small and disadvantaged businesses.
Broadens the scope of diversity requirements. The bill expands diversity and inclusion mandates in state contracting and employment to include not just women- and minority-owned businesses, but also service-disabled veteran-owned businesses and “preferred sources” (such as agencies for the blind and disabled), potentially opening up more opportunities for a wider array of historically marginalized groups.
Strengthens oversight and accountability. By expanding the responsibilities of the state’s Chief Diversity Officer and requiring annual compliance plans across multiple agencies (including those overseeing veteran and disability programs), the legislation aims to institutionalize diversity practices and ensure agencies are held accountable for meeting inclusion goals.
Creates a more unified and enforceable diversity policy. The bill harmonizes language and requirements across various existing laws (including those covering public employment, procurement, and business development), potentially reducing loopholes, increasing consistency, and making it easier for businesses and advocates to understand and utilize state diversity programs.
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Who cares
Headline styles
Boost Diversity in State Contracts
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
3 Co-sponsors
History
- Referred to finance
- Referred to finance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Expand Diversity in State Contracts
In Assembly Committee · Governmental Operations · Sponsor Clyde Vanel
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5490
2019-2020 Regular Sessions
IN SENATE
May 2, 2019
Introduced by Sens. COMRIE, ORTT -- read twice and ordered printed, and when printed to be committed to the Committee on Finance
AN ACT to amend the state finance law and the executive law, in relation to the comprehensive diversity in procurement and employment act of
2019
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "comprehensive diversity in procurement and employment act of 2019".
§ 2. Subdivisions 1 and 9 of section 162 of the state finance law, as added by chapter 83 of the laws of 1995, are 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. Procurement from these providers shall be exempted from the competitive procurement provisions of section one hundred sixty-three of this article and other competitive procurement statutes. Such exemption shall apply to commodities produced, manufactured or assembled, including those repackaged to meet the form, function and utility required by state agencies, public authorities, commissions, public benefit corporations, political subdivisions, or municipal corporations in New York state and, where so designated, services provided by those sources in accordance with this section.
9. Payments to agencies for the blind, other severely disabled and veterans' workshops. The required payment date shall be fifteen calendar days, excluding legal holidays, after receipt of an invoice for the amount of the contract payment due; except when:
(a) the state comptroller in the course of his or her audit determines that there is reasonable cause to believe that payment may not properly be due, in whole or in part;
(b) in accordance with specific statutory or contractual provisions, payment must be preceded by an inspection period or by an audit to determine the resources applied or used by a contractor in fulfilling the terms of the contract;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01312-01-9
S. 5490 2
(c) the necessary state government appropriation required to authorize payment has yet to be enacted;
(d) the cash balance of the fund or sub-fund from which the payment is to be made is insufficient to finance the payment;
(e) a proper invoice must be examined by the federal government prior to payment; or
(f) the goods or property have not been delivered or the services have not been rendered by the contractor in compliance with the terms or conditions of the contract.
The required payment date shall be fifteen calendar days, excluding legal holidays, after such conditions described in paragraphs (a) through (f) of this subdivision have been satisfied or rectified, and provided further that all reasonable and practicable efforts shall be taken to satisfy or rectify such conditions as soon as possible.
10. The provisions of this section shall supersede inconsistent provisions of any general, special or local law, or the provisions of any charter.
§ 3. Subdivisions 2 and 3 of section 179-f of the state finance law, subdivision 2 as amended by chapter 36 of the laws of 2016, subdivision 3 as amended by chapter 568 of the laws of 2015, are amended, and three new subdivisions 7, 8 and 9 are added to read as follows:
2. The required payment date shall be thirty calendar days, excluding legal holidays, provided, however, that for a small business, preferred source, service disabled veteran-owned business, or minority and womenowned business enterprise the required payment date shall be fifteen calendar days, excluding legal holidays, absent a showing by the contracting agency of circumstances beyond its control, provided that the small business submits its invoice electronically, in conformance with the policies and procedures of the accounting and financial management system of state government and identifies that it is seeking expedited payment as a small business, or in the case of final payments on highway construction contracts seventy-five calendar days, excluding legal holidays, after receipt of an invoice for the amount of the contract payment due; except when:
(a) the state comptroller in the course of his or her audit determines that there is reasonable cause to believe that payment may not properly be due, in whole or in part;
(b) in accordance with specific statutory or contractual provisions, payment must be preceded by an inspection period or by an audit to determine the resources applied or used by a contractor in fulfilling the terms of the contract;
(c) the necessary state government appropriation required to authorize payment has yet to be enacted;
(d) [a proper invoice must be examined by the federal government prior to payment;
(e)] the goods or property have not been delivered or the services have not been rendered by the contractor in compliance with the terms or conditions of the contract;
[(f)] (e) the required payment date is modified in accordance with subdivision three of this section; or
[(g)] (f) in the case of final payments on highway construction contracts the commissioner of transportation determines that the contractor has failed to properly submit the necessary documents and other submissions prescribed by the contract specifications and requirements, by the provisions of subdivision eight of section thirty-eight of the highway law, and by all other applicable state and federal laws in
S. 5490 3
order to enable the department of transportation to process the final payment properly and expeditiously.
Any time taken to satisfy or rectify any of the types of conditions described in paragraphs (a) through [(e)] (d) or [(g)] (f) of this subdivision shall extend the required payment date by an equal period of time, provided, however, that for small businesses, preferred sources, service disabled veteran-owned businesses, or minority and women-owned business enterprises, the required payment date shall be fifteen calendar days, excluding legal holidays, after such conditions have been satisfied or rectified, and provided further that all reasonable and practicable efforts shall be taken to satisfy or rectify such conditions as soon as possible.
3. Each state agency shall have fifteen calendar days after receipt of an invoice by the state agency at its designated payment office, or in the case of an invoice received from a small business, preferred source, service disabled veteran-owned business, or minority and women-owned business enterprise, seven calendar days, to notify the contractor of (a) defects in the delivered goods, property, or services, (b) defects in the invoice, or (c) suspected improprieties of any kind; and the existence of such defects or improprieties shall prevent the commencement of the time period specified in subdivision two of this section. When a state agency fails to notify a contractor of such defects or suspected improprieties within fifteen calendar days, or seven calendar days if such contractor is a small business, preferred source, service disabled veteran-owned business, or minority and women-owned business enterprise, of receiving the invoice, the number of days allowed for payment of the corrected proper invoice will be reduced by the number of days between the fifteenth day, or seventh day if payment of such proper invoice is for a small business, preferred source, service disabled veteran-owned business, or minority and women-owned business enterprise, and the day that notification was transmitted to the contractor. If the state agency, in such situations, fails to provide reasonable grounds for its contention that a defect or impropriety exists, the required payment date shall be calculated from the date of receipt of an invoice.
7. As used in this section, "preferred source" shall mean a qualified charitable not-for-profit agency for the blind approved for such purposes by the commissioner of the office of children and family services, any special employment program serving mentally ill persons which is operated by facilities within the office of mental health and is approved for such purposes by the commissioner of mental health, a qualified charitable not-for-profit agency for other severely disabled 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, or a qualified charitable not-for-profit workshop for veterans 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.
8. As used in this section, "certified service disabled veteran-owned business enterprise" shall have the same meaning as set forth in article seventeen-B of the executive law.
9. As used in this section, "minority and women-owned business enterprise" shall have the same meaning as set forth in article fifteen-A of the executive law.
§ 4. Section 4-a of the executive law, as added by chapter 175 of the laws of 2010, is amended to read as follows:
S. 5490 4
§ 4-a. Chief diversity officer. A chief diversity officer for the state shall be appointed by the governor and shall receive a salary to be fixed by the governor within the amount appropriated therefor. The chief diversity officer's responsibilities shall include the following:
1. Advise and assist the governor in formulating policies relating to workforce diversity including the use of preferred sources, service disabled veteran-owned business enterprises and minority and [women's] women-owned business enterprises;
2. Work with the director of the division of minority and women's business development and the division service disabled veteran's business development to prepare an annual plan for ensuring full compliance with [article fifteen-a] articles fifteen-A and seventeen-B of [the executive law] this chapter and article eleven of the state finance law by state agencies and the use of diversity practices and preferred sources by such agencies and public authorities;
3. Work with the commissioner of the office of children and family services to prepare an annual plan for ensuring full compliance with section one hundred sixty-two of the state finance law by state agencies;
4. Work with the director of the office of general services and the division of service disabled veterans' business development to prepare an annual plan for ensuring full compliance with the service-disabled veteran-owned business act by state agencies;
5. Advise the governor and the agencies regarding any measures necessary to ensure full compliance with [article fifteen-a] articles fifteen-A and seventeen-B of this chapter and article eleven of the state finance law in connection with the use of diversity and service disabled veterans practices and preferred source plans by such agencies and by state public authorities;
[4.] 6. Serve as a member of the state procurement council established under section one hundred sixty-one of the state finance law;
[5.] 7. Serve as the governor's liaison with organizations representing minority and women-owned business enterprises, preferred sources and service disabled veteran-owned business enterprises and other organizations related to diversity in the state workforce and in state contracting;
[6.] 8. Serve as the governor's liaison to the small business advisory council for issues related to the creation of a diverse workforce and state procurement practices relating to minority and women-owned business enterprises, preferred sources and service disabled veteran-owned business enterprises;
[7.] 9. Review and consult with the director of minority and women's business development [regarding policies], the director of the division of service disabled veterans' business development and the commissioner of the office of children and family services relating to minority and women-owned business [enterprise] enterprises, service disabled veteran-owned business enterprises and preferred sources contract specialists at state agencies; and
[8.] 10. Engage in other actions assigned to him or her by the governor relating to diversity in hiring or promotion of the state workforce and in encouraging diversity practices and compliance with [article fifteen-a] articles fifteen-A and seventeen-B of this chapter and article eleven of the state finance law in procurement.
§ 5. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the state finance law and the execu- tive law, in relation to the comprehensive diversity in procurement and employment act of 2019
Purpose or general idea of bill
Relates to comprehensive diversity in procurement and employment act of 2019.
Summary of provisions
Section 1 under section 162 of the state finance law would state that payments to agencies for the blind or other severely disabled and veter- ans' workshops shall be fifteen days after receipt of an invoice with certain requirements.
Read the full memo (1,159 words)
Section 2 under subdivision 2 and 3 of section 179-f of the state finance law would state that payments to agencies for preferred source, service disabled veteran-owned business, or minority and women owned business enterprises.
Section 3 amends the executive law to expand the responsibility of the chief diversity officer to also include preferred source and disabled veteran-owned business enterprises.
Section 4 is the effective date.
Justification
New York State has historically been a leader in inclusion and the fight for full participation of all segments of society in our economy and communities. Many specific initiatives in New York have resulted in real progress in certain areas. Despite the best efforts of legislative bodies, economic development officials, and program staff at various levels of government, diverse segments of New York's population continue to struggle to find meaningful employment, even in good economic times. People who are blind or legally blind, people with severe disabilities, and veterans returning from service are among those who strive for full inclusion and upward mobility through employment. Statistics show there is much more to do to make the American Dream a reality for these segments of our society. By turning the tide, we will not only improve the lives of New Yorkers, but create new taxpayers in communities across the state. New York has always been among the first to take on the fight for these men and women. The Preferred Source law, enacted in 1948, was an innovative statute to advance special social and economic goals. But the law hasn't been updated for more than 20 years. A comprehensive strategy to increase employment opportunities for people who are blind or severely disabled through greater utilization of the Preferred Source Program will harness the true buying power of the public sector to create new taxpayers. The current Preferred Source statute requires state agencies, public benefit corporations including most public authorities), municipalities, and school districts to purchase commod- ities and services from Preferred Sources first, if the Preferred Source offering meets the entity's needs for "form, function, and utility." Preferred Source offerings and pricing are pre-approved by the Office of General Services (OGS), eliminating the need for resource- and time-in- tensive competitive bidding processes. New York State has three Preferred Source organizations: New York State Preferred Source Program for New Yorkers Who Are Blind (NYSPSP), NYS Industries for the Disabled (NYSID), and the NYS Department of Correctional Services, Division of Industries (Corcraft). Employment opportunities for people who are blind or disabled are supported by the purchase of goods and services the public sector needs to operate, such as office, safety and medical supplies; mops and brooms and cleaning solutions; janitorial and laundry services; and call center, document imaging and transcription services. The Comprehensive Diversity in Procurement and Employment Act of 2019 will improve the Preferred Source program by mandating timely payments to Preferred Source agencies, as well as Minority and Women-owned Busi- ness Enterprises (MWBE) and Service Disabled Veteran-owned Businesses (SDVOB). This reform will eliminate the frequent problem of long-overdue payments from New York State to MWBE, SDVOB and non-profit entities producing goods and services and employing New Yorkers who are blind or disabled. On average, 60 percent of these businesses receive payment for their invoices to the public more than 30 calendar days from the invoice date. Improving upon legislation signed into law in 2017 for a small group of vendors, this section will expand the definition of entities required to receive timely payments to include economically vulnerable groups, and require payment in no more than fifteen calendar days, excluding legal holidays, after receipt of an invoice for the amount of the contract payment due. The bill also will expand the jurisdiction of New York State Chief Diversity and Compliance Officers to include intra-agency compliance with the Preferred Source and SDVOB programs to encourage full and equal participation in public sector business oppor- tunities across the state. Statistics indicate a significantly higher rate of unemployment among these segments of the population - in some cases approaching 70 percent - an alarming statistic considering overall unemployment in New York is less than 5 percent. Diversity refers not only to race and gender; it includes other groups who face barriers to full and equal participation in the workforce and our communities. This legislation expands the Chief Diversity Officer's scope to include popu- lations economically vulnerable due to legal blind- ness or other severe disability. Embracing these thousands of New Yorkers previously left behind will have a positive, permanent impact on state and local econo- mies and lessen the burden on critical social service programs. While OGS and the Office of Children and Family Services (OCFS) have made great strides with existing resources, New York needs to broaden the scope of the office of the Chief Diversity Officer and empower compli- ance officers to engage more meaningfully in their agencies to achieve full diversity. Because it utilizes Compliance Officers already employed in state agencies, this proposal has no fiscal impact. More fully embracing the intent and potential of existing state procurement programs designed to create employment and economic opportunities will spur greater economic independence for New Yorkers who have historically faced barriers to full and equal participation in the workforce. As a result, more of them will earn and spend wages in their communities across the state, thereby increasing personal income and sales tax receipts. It is important to note that private business cannot be desig- nated as preferred source, although there are currently many small busi- nesses, including MWBEs and SDVOBs across the state, that partner with a Preferred Source. In fact, Preferred Source entities currently partner with MWBEs and SDVOBs across New York. From a cleaning solutions company on Long Island, to a lighting company in Manhattan, an apparel company in Brooklyn, and a medical supply company in the Mohawk Valley, Preferred Source entities, MBEs and SDVOBs not only operate in New York, they thrive. But more can be done. State law should reflect our shared commitment to expanding economic opportunity for all New Yorkers, both through private-sector businesses and non-profit entities. If enacted, the Comprehensive Diversity in Procurement and Employment Act of 2019 will remove barriers and foster greater understanding and utilization of these similar, but nuanced, procurement programs.
Prior legislative history
Senate Bill 8425 of 2018.
Fiscal implications for state and local governments
To be determined.
Effective date
Effective immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.