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March 20, 2020

NYS Division of Minority and Women's Business Development Announces Proposed Regulations for Enterprise Certification and Appeal Processes

On March 4, the NYS Department of Economic Development, Division of Minority and Women’s Business Development announced proposed rulemaking that affects the certification and appeal procedures surrounding certification as a minority- or women-owned business enterprise (MWBE). A few of the proposed regulations simply clarify existing regulation criteria such as:

  1. The division may consider documentary evidence when assessing a minority or woman owner’s capital contribution.
  2. The minority or woman owner must be competent in the industry, make operational decisions, and devote time to the operation of the business. This may include the extent to which the minority or woman owner has licensing or academic credentials relevant to the industry their business operates in.
  3. The minority or woman owner must have the power to control the business, be the highest ranking officer, and represent themselves as the principal of the business to the public.

These proposed regulations simply codify the interpretations that the division has been assessing MWBE certification applications by in recent years.

However, the proposed regulations also set long-awaited time limits for the division to respond to MWBE applications. Specifically, the proposed rulemaking proposes to require the division to notify applicants of the completeness of their application within 21 days of receipt. This initial review will identify any deficiencies in the application, and, at this point, the division may request additional documents. The applicant would then have 20 days to submit additional documents, or their application may be rejected. Once an application is complete, the division would have 45 days to render a decision on the MWBE certification application. This proposal drastically speeds up the MWBE review process that, for some recent applications, has been two years or more.

The final proposal focuses again on accelerating MWBE appeal procedures. Once an appeal record is closed––meaning after both the applicant and the division have submitted appeal briefs––or after the in-person hearing, the hearing officer has 60 days to submit its recommended order. The division director then has 30 days to submit a final order. This proposed rulemaking does not address the length of time the applicant or the division would have to submit a written appeal brief, which is still governed by 5 NYCRR § 145.1(k), placing the burden on the hearing officer to fix a time for filing documents.

If you have any questions regarding the content in this alert, please contact Anneliese Aliasso, associate, at aaliasso@barclaydamon.com; David Burch, partner, at dburch@barclaydamon.com; or another member of the firm’s Commercial Litigation Practice Area.

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