Governor Hochul Signs Legislative Package to Strengthen New York's Nation-leading Minority- and Women-owned Business Enterprise Program

October 6, 2022

Legislation (A.9259-A/S.3390-A) Helps Prevent Fraud and Abuse within the Minority-and Women-Owned Business Enterprise (MWBE) Program and Creates a Framework for a Fund To Investigate and Audit Fraud

Legislation (A.6420/S.571) Allows Businesses To Use MWBE Development and Lending Program Funds to Refinance Existing Debts

Legislation (A.10459/S.9351) Allows New York City To Award Contracts Up to $1 Million to MWBEs Without a Formal Competitive Process

Also Announces New York's MWBE Utilization Rate is Highest in the Nation with Nearly $3 Billion in State Contracts Awarded to MWBEs

Annual Report Available Here

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Governor Kathy Hochul today signed a legislative package that will strengthen New York's nation-leading program to support Minority- and Women-Owned Business Enterprises. The Governor signed the new legislation in conjunction with the State's 12th Annual MWBE forum, which runs through October 7. The Governor also announced that New York State has surpassed its goal for MWBE utilization on New York State contracts with a utilization rate of 30.64 percent during the 2022 Fiscal Year, the highest MWBE utilization rate in the country for the second year in a row. Nearly $3 billion in State contracts were awarded to MWBE firms during the 2022 Fiscal Year, and nearly $24 billion in State contracts have been awarded to MWBEs since 2011. The bill signing, in addition to the steady increase in New York's MWBE utilization rate, underscore Governor Hochul's commitment to supporting MWBEs and being a champion for greater economic opportunity statewide.

"New York draws strength from its diversity, and it is a priority for my administration to ensure that economic opportunities are inclusive and equitable across the state," Governor Hochul said. "For two years in a row, our nation leading MWBE utilization rate highlights our commitment to providing the necessary tools and resources so that everyone is able to forge pathways to economic success. The continuation of New York's strong MWBE utilization rate demonstrates the State's commitment to championing greater equality of economic opportunities for MWBEs."

"Thanks to Governor Hochul's leadership, New York has exceeded our utilization goal for the second year in a row and we will continue to help break down barriers and expand opportunities for MWBEs across the State," said Lieutenant Governor Delgado. "New York is committed to providing critical resources for Minority- and Women-Owned businesses to help them succeed because our economy is strongest when it is diverse, accessible, and inclusive."

Legislation (A.9259-A/S.3390-A) will prevent fraud and abuse within the MWBE Program and creates a framework for a fund that will investigate and audit misconduct within the Program. A 2014 report by the New York State Supreme Court Grand Jury revealed that over $10 million intended for honest MWBE had instead gone to fraudulent non-MWBEs, cheating legitimate MWBEs out of contracts. This legislation will ensure the integrity of the program by creating a state MWBE registry, increasing fines for fraud, and establishing a MWBE fund to investigate misconduct.

State Senator Jamaal Bailey said, "I believe in the power of Minority-and Women-Owned Businesses to close wealth gaps, diversify our economy, and create a prosperous future for our communities throughout the state. Senate Bill S3390, establishes safeguards for the Minority- and Women-Owned Business Enterprise Program to prevent fraud and abuse. This bill will strengthen the Minority and Women-Owned Business Enterprise fund and ensure the fund is running fairly and its opportunities remain accessible to these enterprises in New York. I want to thank Governor Kathy Hochul, Senate Majority Leader Andrea Stewart-Cousins, Speaker Carl Heastie, Assembly sponsor Majority Leader Crystal Peoples-Stokes, and my colleagues in both houses for supporting this legislation to open doors for entrepreneurs who are women and people of color throughout the state."

Assembly Majority Leader Crystal D. Peoples-Stokes said, "I am proud of New York State's nation-leading MWBE utilization rate. Ensuring the integrity of the MWBE Program is of utmost importance, and I commend Governor Hochul for signing this legislation that will help minimize MWBE fraud, provide increased transparency, and afford opportunities for certified MWBEs."

Legislation (A.6420/S.571) will allow businesses to use funds from the Minority- and Women-Owned Business Development and Lending Program to refinance existing debt. For many business owners, commercial credit cards are the first and only means to access credit, which often means high interest rates on debt. Allowing businesses to refinance that debt under one of the State's existing micro-loan programs could reduce interest payments to as little as $1,200, saving the business nearly $3,000 a year.

State Senator James Sanders Jr. said, "These bills signed by the Governor will promote and strengthen Minority- and Women-Owned Business Enterprises by increasing opportunities for them to grow. As we transition into a post-COVID era, the New York economy will greatly benefit by robust MWBEs contributing to job creation and economic growth."

Assemblymember Rodneyse Bichotte Hermelyn said, "I'm honored to see my two sponsored bills (A.6420/S.571) and (A.10459/S.9351) which expand opportunities for MWBEs become law. By permitting businesses to use MWBE development and lending programs to refinance existing debts and by allowing NYC to award contracts up to $1M to MWBEs without a formal competitive process, we are taking two monumental steps towards equality for MWBEs and breaking barriers that allow them to get their fair share of the economic pie. I thank Governor Hochul and the State Legislature for passing a legislative package that will give MWBEs the opportunities they need and deserve to succeed fairly. Now, MWBEs will not be hindered by refinancing issues and competitive process barriers that they shouldered an unfair burden with. The latest data show that New York is leading the nation in its MWBE utilization rate, and that we are relentlessly committed to leveling the playing field and creating equal economic opportunity for all."

Legislation (A.10459/S.9351) will authorize the City of New York to increase award amounts to MBWEs for non-competitive contracts from $500,000 to $1 million. The City has undertaken many efforts to address such discrimination, including setting subcontractor participation goals for MWBEs, and previously, City agencies could contract MWBEs for contracts not exceeding $500,000 from MWBEs without a formal competitive process. The new law will allow the City to raise the procurement threshold to $1 million, which will improve access to capital for MWBEs seeking to enter into City contracts. This legislation was a city program bill that was advanced by New York City Mayor Eric Adams.

New York City Mayor Eric Adams said, "Today is a significant win for Minority- and Women-Owned Businesses in New York City, as well as Black and Brown communities across the state. By raising the discretionary threshold on city contracts for M/WBEs to $1 million, we are leveling the playing field for New Yorkers from diverse backgrounds — allowing us to build towards a more just and equitable future. Our M/WBEs have suffered through the pandemic from slow rates of business formation and employment growth, in addition to a severe uptick in business closures. Today, we are showing our M/WBEs that we have their back. I want to thank Governor Hochul for her commitment to MWBEs and our partners in the Legislature who helped us take this significant step to help drive our economic recovery, while addressing a generational challenge rooted in historic inequities."

The theme for the 12th Annual MWBE Forum is "Building an Equitable Future" which highlights New York State's support of MWBE firms to become more competitive in an ever-changing market. This year's hybrid forum offers in-person events and online sessions that bring together MWBEs, state agencies and authorities, prime contractors, and other strategic partners for informational and networking opportunities.

New York State Chief Diversity Officer Julissa Gutierrez said, "New York is building an equitable future for entrepreneurs who are women and people of color by leveling the playing field to ensure economic empowerment and contracting opportunities. Under Governor Hochul's leadership, we are leading the way in making our economy more inclusive and more robust, reflecting the remarkable diversity of New York State."

Empire State Development President, CEO and Commissioner Hope Knight said, "Under Governor Hochul's leadership, New York's commitment to equal opportunities for MWBEs is demonstrated through our MWBE utilization rate - which has exceeded our goal for two years in a row. We will continue to provide MWBEs with the resources they need to succeed and thrive in the Empire State."

Read the full press release here.