BILL NUMBER: S8477
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the economic development law, in relation to additional
duties and reporting requirements of the advisory panel on employee-
owned enterprises; and to amend chapter 435 of the laws of 2017, amend-
ing the economic development law relating to establishing an advisory
panel on employee-owned enterprises within the division of small busi-
ness services, in relation to the effectiveness thereof
 
PURPOSE OR GENERAL IDEA OF BILL:
To require that the advisory panel on employee-owned enterprises examine
and report on the barriers for such businesses to certify for and
participate in the state MWBE program, strategies to reduce those barri-
ers, and identify ways to encourage minority and women-owned businesses
to consider employee-ownership as part of their business succession
planning.
 
SUMMARY OF PROVISIONS:
Section 1 requires the advisory panel to evaluate and include in its
report the barriers to MWBE certification and participation in state
agency contracts for employee-owned enterprises, identify changes to
state law and Article 15-a that could reduce these barriers, and identi-
fy and recommend strategies that the director of the division on minori-
ty and women's business development could take to aid these businesses
in navigating the certification process. It would also require the panel
to identify and recommend strategies to promote the employee ownership
model to minority and women- owned businesses as part of their
succession planning.
Section 2 extends the reporting deadline for the panel's findings to
June 13, 2025 and requires the report to be sent to the chair of the
select majority task force on minority and women-owned business enter-
prises and the director of the division of minority and women's business
development.
Section 3 extends the date that the provisions establishing the advisory
panel and its duties expire by a year to October 1, 2025.
Section 4 sets the effective date.
 
JUSTIFICATION:
A study recently found that 45 percent of small businesses lack a
succession plan. One version of a succession plan that is often over-
looked is moving toward an employee ownership model, which has been
proven to lead to higher wages, better benefits, and more job stability
for employees. This bill would require the advisory panel to identify
and recommend strategies to better highlight employee ownership as an
option for the many minority and women-owned businesses that lack a
clear succession plan.
However, transitioning to this ownership model or maintaining employee-
ownership may be difficult for businesses that wish to certify or recer-
tify with the state MWBE program, as various certification requirements
in Article 15-a assume one business owner or a small group with finan-
cial and strategic control. This bill would require the advisory panel
to examine changes to state law and Article-15a that may benefit employ-
ee-owned enterprises in the certification process and as they look to
participate in state agency contracts. It would also require the advi-
sory panel identify ways the director of the division on minority and
women's business development could aid employee-owned enterprises in
certification and participation in the state's MWBE program.
The advisory panel on employee-owned enterprises has repeatedly received
an extension on their reporting deadline. This bill provides another
extension, with the condition that the panel closely examine and report
on issues related to the employee-ownership model for minority and
women-owned businesses in addition to their other statutory require-
ments.
 
PRIOR LEGISLATIVE HISTORY:
New Bill
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act will take effect immediately; provided that the amendments to
subdivisions 4 and 5 of section 139 of the economic development law made
by sections one and two of this act shall not affect the repeal of such
section and shall be deemed repealed therewith.

Statutes affected:
S8477: 139 economic development law, 139(5) economic development law