Title 66: Department of Small Business Services

Chapter 3: Aviation

§ 3-01 Definitions.

The following words and phrases when used in this chapter shall for the purpose of this chapter have the meanings respectively ascribed to them as follows:

Aircraft. “Aircraft” shall mean and include any and all contrivances or devices that are used or intended to be used for the navigation of or flight in air or space, including but not limited to airplanes, helicopters, lighter-than-air craft, gliders, seaplanes and amphibians.

Airport. “Airport” shall mean any area of land or water, except John F. Kennedy International Airport and LaGuardia Airport which are under the jurisdiction of the Port Authority of New York and New Jersey, that is used or intended to be used for the landing and takeoff of aircraft, and includes any buildings and facilities.

Applicant. “Applicant” shall mean any individual, entity, party, firm, partnership, co-partnership, corporation, association or company (including any assignee, receiver, trustee or similar representative thereof), society, government agency, public authority, or any state or political subdivision thereof.

Armed Forces. “Armed Forces” shall mean the Army, Navy, Air Force, Marine Corps, and Coast Guard of the United States of America including their regular and reserve components and members.

Auto-rotation. “Auto-rotation” shall mean a rotorcraft flight condition in which the lifting rotor is driven entirely by action of the air when the rotorcraft is in motion.

Balloon. “Balloon” shall mean a lighter-than-air aircraft that is not engine driven.

Commissioner. “Commissioner” shall mean the Commissioner of the New York City Department of Business Services or his duly authorized representative.

Department. “Department” shall mean the New York City Department of Business Services.

External load. “External load” shall mean a load that is carried, or extends outside of, the aircraft fuselage.

Fixed base operation. “Fixed base operation” shall mean an operation conducted by a person having the right to furnish services including, but not limited to, storage and/or tiedown of aircraft, repair and/or maintenance of aircraft, aircraft charter, rental and/or lease and the sale of aviation fuels and other petroleum products.

Glider. “Glider” shall mean a heavier-than-air aircraft, that is supported in flight by the dynamic reaction of the air against its lifting surfaces and whose free flight does not depend principally on an engine.

Helicopter. “Helicopter” shall mean a rotorcraft that, for its horizontal motion, depends principally on its engine-driven rotors.

Heliport. “Heliport” shall mean an area of land, water, or structure used, or intended to be used, for the landing and take off of helicopters.

Jet aircraft. “Jet aircraft” shall mean and include any and all craft which are not propeller driven and which accomplish motion entirely as a direct reaction of the thrust of any engine.

Kite. “Kite” shall mean a framework, covered with paper, cloth, metal, or other material, intended to be flown at the end of a rope or cable, and having as its only support the force of the wind moving past its surfaces.

Parachute. “Parachute” shall mean a device used or intended to be used to retard the fall of a body or object through the air.

Person. “Person” shall mean any individual, party, trustee, firm, partnership, corporation, joint stock association, company, society, government agency, public authority, or any state or political subdivision thereof.

Rotorcraft. “Rotorcraft” shall mean a heavier-than-air aircraft that depends principally for its support in flight on the lift generated by one or more rotors.

Seaplane. “Seaplane” shall mean any aircraft designed to maneuver on water, and shall include amphibious aircraft.

Seaplane base. “Seaplane base” shall mean any waterfront property which provides, or is intended to provide, docking and/or ramp facilities for seaplanes, and shall include any additional appurtenances thereto.

Staging area. “Staging area” shall mean that geographic location which may be used for the storage, assemblage or gathering of any item of equipment which is intended to be lifted by helicopter.

Vehicle. “Vehicle” shall mean and include automobiles, trucks, buses, motorcycles, limited use vehicles, bicycles, horse drawn vehicles and any other device in or upon which any person or property is or may be transported, carried or drawn upon land, except aircraft.

§ 3-02 Use and Occupancy of Airports, Aircraft Landing Sites, Seaplane Bases, Heliports and Marginal Streets.

Use or occupancy, for any purpose, including the conduct, operation or maintenance of any commercial business, soliciting, peddling, selling or offering for sale merchandise or commodities of any kind, or services, or the holding of any public meeting, on any airport, aircraft landing site, seaplane base, heliport, or marginal street, owned by the City of New York is prohibited except by written permission of the Commissioner.

§ 3-03 Smoking.

Smoking, possessing or throwing away lighted material or tobacco is prohibited. No person shall smoke, possess or throw away any lighted material or a lighted match, cigar or cigarette while in or upon any airport, aircraft landing site, seaplane base, or heliport or any building or appurtenance thereto, whether owned by the City of New York or privately owned, or while on board any aircraft berthed, moored or located at any such airport, aircraft landing site, seaplane base or heliport; except that the Commissioner and the Fire Commissioner of the City of New York may designate portions of any of the aforementioned structures or locations where smoking may be permitted and may prescribe the types and locations of containers or receptacles into which lighted material and a lighted match, cigar or cigarette shall be deposited.

§ 3-04 Airports.

(a) No airport located within the limits of the City of New York, whether for public or private use, shall be maintained or operated unless the owner or operator shall have procured from the Department a license or permit allowing such maintenance and operation.
  1. Any person seeking to maintain or operate an airport shall file an application with the Department at its office, 110 William Street, 3rd floor, New York, N.Y. 10038. Such application shall be in writing and sworn to by or on behalf of the owner or operator.
  2. The application shall be subject to investigation and report by the Director of Aviation of the Department.
  3. The application for a license or permit must show:

   (1) The elevation, location, dimensions and exterior boundaries of the proposed airport, the location, dimensions and height of any and all structures or vertical projections above the general contour of the proposed airport, all as contained in a survey, as of the date of the application, by a licensed City surveyor.

   (2) The location, nature and height of any structure or vertical projection within two miles from such exterior boundaries, the presence of which would constitute an obstruction to safe aerial ingress to or egress from the airport.

   (3) That the surface of the airport intended for the takeoff, landing and taxiing of aircraft is firm and suitable.

   (4) The markings, each constructed and painted so as to be readily discernible from the air at a minimum height of 3,000 feet, to be in conformity with Federal Aviation Administration standards.

   (5) That the location of the proposed airport, and the volume, character and direction of the traffic thereat will not endanger the lives and property of persons operating aircraft on or near existing airports and of occupants of land in their vicinity, nor tend to destroy or impair the utility of such airports and the investment therein; and that, in relation to existing airports, the proposed airport conforms to all spacing requirements and safety standards of applicable Federal and State laws and regulations.

   (6) An application for a license or permit covering night maintenance and operation must show the number, location, type and power of lights in conformity with Federal Aviation Administration standards.

  1. The applicant must have in force upon the granting of a license or permit, liability insurance in an amount to be set by the Commissioner with the City of New York as an additional insured.
  2. The Commissioner may issue a license or permit to operate the proposed airport if, in addition to the items specified in subdivision (d) above, such airport will not be detrimental to the public safety and will be in the public interest. Such license may be limited by appropriate conditions as to type of aircraft, time and method of operation, standards of maintenance, keeping of records and safety and security precautions and such other terms and conditions as may be necessary or desirable to insure the public safety and interest and the safety of those engaging in aeronautical activities.
  3. Such license or permit shall be effective for one year from the date of issuance thereof, unless sooner revoked or suspended by the Commissioner for cause shown.
  4. No license or permit shall be revoked by the Commissioner except after a hearing upon 48 hours notice to the licensee. The Commissioner shall have the power in his discretion, to suspend such license or permit pending such hearing and determination.
  5. Each license or permit issued hereunder may be renewed annually upon application by the licensee or permittee. Such application must set forth that the airport and the operation thereof conforms to the minimum requirements set forth in the original application for the license or permit granted and complies with the regulations promulgated by the Commissioner subsequent to the date of the original license or permit.
  6. The fee for the issuance of such annual license or permit shall be $250.00, and the fee for the renewal thereof shall be $150.00.
  7. Any change in the airport or operation thereof which would affect the safe operation thereof, shall be reported immediately by the licensee or permittee in writing to the Commissioner.
  8. The failure on the part of the licensee or permittee to comply with any of the rules set forth in this chapter or hereafter adopted by the Commissioner, shall constitute sufficient cause for revocation of such license or permit. Licensee or permittee must keep accurate written records of all landings and departures, report of which must be made on a monthly basis to the Department.
  9. The City, by or through its employees, agents, representatives, or contractors, shall have the right at all times to enter upon the airport for the purpose of inspecting and/or observing the performance by the licensee or permittee of his obligations and duties.
  10. No heliport in the City of New York shall conduct operations between the hours of 11 p.m. and 7 a.m. unless a waiver has been obtained from the Commissioner or the Commissioner’s designee. In granting such a waiver, the Commissioner shall take into account the health, safety and welfare of the community.

§ 3-05 Seaplane Noise Control.

In order to afford better relief and protection to the public from unnecessary seaplane noise, all seaplanes must taxi to a point at least 700 feet from the nearest shoreline before beginning a takeoff run or applying power in excess of that required for safe taxiing.

§ 3-06 Helicopter External Load Operations.

(a) It shall be unlawful for any person, firm, or corporation to use or permit the use of any helicopter or other aircraft within the confines of the City in connection with the construction, alteration, or installation of service equipment or material in or upon any building or structure or to conduct any other external load operation within the City of New York, without first obtaining a permit from the Department.
  1. Before an application for a permit will be approved by the Commissioner, applicant must meet the following requirements:

   (1) The staging area must:

      (i) Be of sufficient size and location as to permit helicopter landings and takeoffs without unduly creating an annoyance or safety hazard to persons or property in the area.

      (ii) Permit freedom of movement for cargo, equipment, helicopter, support personnel and vehicles within the confines of that area.

      (iii) Be capable of being sealed off from spectators, vehicles and pedestrians, without creating an attractive nuisance.

      (iv) Be free of obstructions to helicopter flight and be capable of providing reasonable control over dust and debris which may be generated by helicopter downwash. All operations and support personnel shall be provided with suitable protective garments, such as hearing protectors, construction helmets and goggles, as required by the Commissioner.

      (v) Provide safe approach and departure paths so that in case of an emergency, an autorotational landing may be made without endangering persons or property.

   (2) The discharge point must:

      (i) Meet all requirements of the Department of Buildings for the installation of service equipment.

      (ii) Comply with all Fire Department rules and regulations.

      (iii) Comply with all Bureau of Highway Operations rules and regulations concerning the closing of streets and highways which border the operation area.

      (iv) The top floors of the building structure intended as the discharge point must be evacuated of all non-essential personnel, except operations personnel, by order of the Commissioner, and all entrances and exits to the building or structure must be blocked or guarded in such a manner as to prevent their use by unauthorized personnel when the rotorcraft load combination is overhead.

      (v) The flight path of the rotorcraft with the external load combination may not pass over any structures, buildings or vehicles which are occupied by any persons not connected with the operation, except that the Commissioner shall in all instances, have the power to determine all safety requirements.

  1. Applicant shall conduct test flights with the various loads to be carried to determine:

   (1) That the weight of the rotorcraft load combination and location of center of gravity are within approved limits.

   (2) That the load is securely fastened and does not interfere with any emergency release devices.

   (3) That while hovering or on forward flight the load does not oscillate and is controllable during all phases of the operation.

   (4) Each flight operation must be conducted in such a manner that in an emergency, will allow the external load to be released and the aircraft landed without hazard to persons or property.

  1. Permit requirements:

   (1) The Commissioner shall in all instances be the final authority on all matters relating to the issuance of permits. Any permits granted under this subdivision (d) may be ordered modified, suspended or revoked by the Commissioner at his discretion for any good cause.

   (2) All provisions of laws and rules or regulations of any government agency may be deemed applicable by the Commissioner to insure the safety of persons or property in the air or on the ground in which case they must be complied with.

   (3) All applicable labor laws, rules and regulations shall be complied with for any operation.

   (4) Operations shall only be conducted during VFR conditions in the daytime. No operation will be approved during adverse or inclement weather, or if the wind exceeds 30 miles per hour or with a gust spread of no more than 15 miles per hour.

   (5) Each applicant must hold a valid Rotorcraft External Load Operator Certificate, or equivalent, issued by the FAA under Part 133, as amended or superseded by applicable Federal Aviation Regulations.

   (6) A violation of any rule or regulation of the FAA or any other Federal or State agency having jurisdiction over the subject matter of the operation shall be a violation of this chapter.

   (7) Each applicant must file his request on a form and in such manner as may be prescribed by the Commissioner.

   (8) Upon satisfactory fulfillment of all requirements, the Commissioner may issue a permit together with any restrictions or conditions he deems necessary.

   (9) Each applicant must have in force liability insurance in an amount to be determined by the Commissioner with the City of New York included as an additional insured.

  1. Applicant must permit any authorized representative of the Commissioner to conduct inspections or examinations in order to determine whether there has been sufficient compliance with applicable laws, rules and regulations.
  2. Each applicant shall prepare for the Commissioner’s approval a detailed diagram of the operations area and depict thereon

   (1) Optimum route of flight to the staging area for the purpose of noise abatement and avoidance of obstruction hazards.

   (2) Emergency landing area within autorotational range of any and approximate point of descent to landing.

   (3) Staging areas, pick-up and discharge points.

   (4) Streets, highways, and building exits and entrances which must be closed.

  1. No helicopter having fewer than two engines shall be permitted to conduct external load operations in the City.
  2. Safety.

   (1) Each applicant shall provide adequate fire protection during the operation which complies with Fire Department regulations and such other requirements as are set forth herein.

   (2) Each applicant shall provide adequate control communications and procedures for the operation.

   (3) Each applicant shall obtain all necessary approvals and permits as required by law.

      (i) Permit fee. The fee for the issuance of a permit for the takeoff and landing of aircraft used for the external transportation of material or equipment at a non airport location shall be $300.00.

§ 3-07 Helicopter Noise and Safety.

(a) To prevent unnecessary noise all takeoffs and landings at public use heliports in the City shall be made over water.
  1. Except where necessary for takeoff or landing or under Air Traffic Control clearance while operating in the New York Terminal Control Area, no person may operate a helicopter in the City of New York below the following altitudes:

   (1) An altitude allowing, if a power unit fails, an emergency landing in the waterways of the City.

   (2) An altitude of 1,000 feet above the highest obstacle or within a horizontal radius of 1,000 feet of the aircraft, except over open water.

§ 3-08 Landing and Takeoff at Other Than Licensed Heliports, Airports and Seaplane Bases.

(a) No aircraft shall land or takeoff within the limits of the City of New York except at licensed airports unless a permit allowing such operation has been obtained from the Commissioner.
  1. Any person may file an application in writing with the Department at its office, 110 William Street, 3rd floor, New York, New York, 10038.
  2. The application shall be subject to investigation and report by the Commissioner or his duly authorized representative.
  3. The application for a permit must show:

   (1) A plot map showing the location of the proposed operation.

   (2) Make, model and registration numbers of aircraft.

   (3) Name and qualifications of the pilot-in-command.

   (4) Permission of the property owner for the proposed operation.

   (5) Purpose of the operation.

  1. The applicant must have in force upon the granting of the permit, liability insurance in such amounts and upon such terms as deemed appropriate by the Commissioner and with the City of New York as additional insured.
  2. No materials or equipment shall be transported outside of the aircraft.
  3. The Commissioner may issue a permit for the proposed operation if, in the Commissioner’s judgment, the conduct of such operation will be in the public interest and not detrimental to public safety.
  4. The fee for the issuance of such permit shall be $200.00 and the fee for the renewal thereof shall be $135.00.

§ 3-09 Lighter-Than-Air and Glider Operation.

(a) No airship, balloon in free flight, or tethered balloon flight shall land or takeoff within the limits of the City unless a permit allowing such operation has been obtained from the Commissioner.
  1. No glider shall takeoff or land within the limits of the City unless a permit allowing such operation has been obtained from the Commissioner. No engine powered aircraft shall tow a glider into the air within the limits of the City unless such a permit allowing such operation has been obtained from the Commissioner.
  2. Any person seeking such a permit shall file an application with the Department at its office, 110 William Street, 3rd floor, New York, N.Y. 10038. Such application shall be in writing.
  3. The application shall be subject to investigation and report by the Director of Aviation of the Department.
  4. The application for a permit must show:

   (1) A plot map showing the location for the proposed operation.

   (2) Make, model and registration number of aircraft.

   (3) Name and qualifications of the pilot-in-command.

   (4) Permission of the property owner for the proposed operation.

   (5) Purpose of the operation.

  1. The applicant must have in force upon granting of the permit liability insurance in an amount to be set by the Commissioner with the City of New York included as an additional insured.
  2. The Commissioner may issue a permit for the proposed operation if, in such Commissioner’s judgment, the conduct of such operation will not be detrimental to the public safety and will be in the public interest.
  3. The fee for the issuance of such permit shall be $200.00, and the fee for the renewal thereof shall be $135.00.

§ 3-10 Unauthorized Takeoffs and/or Landings.

(a) It shall be unlawful for any person navigating an aircraft to take-off or land at any place within the limits of the City other than at places designated for this purpose by the Commissioner.
  1. The provisions provided for herein shall not apply to any aircraft which is operated under emergency conditions, nor are they intended to supplant the decisions of the pilot-in-command when such decisions relate directly to acts intended to safeguard the pilot, aircraft, or its passengers.

§ 3-11 Reports.

The owner or operator of any aircraft involved in an accident or incident within the limits of the City must, in addition to any Federal or State reporting requirements, file a report with the Commissioner within 24 hours of such occurrence.

§ 3-12 Penalties.

The failure on the part of the licensee or permittee to comply with any of the rules set forth in this chapter or hereafter adopted by the Commissioner, shall constitute sufficient cause for revocation of such license or permit.

Chapter 4: Fees

§ 4-01 Work Notice and Work Permit Fees.

(a) The six categories of fees charged by the Department of Business Services in connection with the issuance of work notices and work permits are:

   (1) New building fee. New building fee based on square footage;

   (2) Open area fee. Open area fee such as lumber yard container terminal, storage, etc., based upon square footage;

   (3) Miscellaneous fee. Miscellaneous fee for such work as plumbing, electrical, demolition, bulkheads, etc., based on cost;

   (4) Amendment fee. Amendment fee for any change or revision of a previously issued permit;

   (5) Fee for Change of Use. Fee for Change of Use involving no physical work; and

   (6) Special fees. Special fees for notarization of documents and photocopies.

  1. The fee schedule below lists each of these categories separately. One hundred percent of the fee is due at the time of filing a permit application and fees are not refundable. All applications must be accompanied by the full fee in order to be processed. A fee computation should be included with each application.

NYC DEPARTMENT OF BUSINESS SERVICES WORK NOTICE AND WORK PERMIT FEE SCHEDULE EFFECTIVE OCTOBER 1, 1986

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0 to 1,000 Square Feet $55.00
1,001 to 5,000 Square Feet $110.00
5,001 to 10,000 Square Feet $220.00
10,001 to 20,000 Square Feet $440.00
20,001 to 40,000 Square Feet $880.00
40,001 to 60,000 Square Feet $1,320.00
60,001 to 80,000 Square Feet $1,760.00
80,001 to 100,000 Square Feet $2,200.00
Add $440.00 for each additional 20,000 Square Feet or Part of  

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CATEGORY VI SPECIAL FEESThe department shall be entitled to charge the following fees:        
1. Acknowledgements (Notary)     per signature $0.25
  1. Certificate of Completion or Notice of Completion
    per copy $5.00
  1. Certificate of pending Violations
    per copy $35.00
  1. Preparing Copy of Record
       
  A)Preparing and certifying a copy of record or document other than a plan, certificate of completion, notice of completion or certificate of pending violationNote: A page to consist of one face of a card or record   first pageeach additional page $20.00$3.00
 
1.Photostat copy of a plan 18”x 24”or less per copy $15.00
    2.Photostat copy of a plan exceeding 18”x 24”for first section 18”x 24”each additional section 18”x 24”or less copy $15.00
    3.Extra photostat copies of plans each section 18”x 24” copy $3.00
   
  1. Places of Assembly
each copy $50.00

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§ 4-02 Contract Bid Fees.

Contract documents may be obtained at the Department of Business Services, 110 William Street, 3rd floor, New York, N.Y. 10038 at a cost of $45.00 each, which will not be refunded. Only cash (exact change only) or certified check, payable to the Comptroller of the City of New York will be accepted for the payment of each document.

Chapter 5: New York City Energy Cost Savings Program

Subchapter A: General Provisions

§ 5-01 Authority; Purpose.

(a)  These rules are promulgated pursuant to Local Law 54 of the Laws of 1985 of the City of New York, as amended, as authorized by Chapter 551 of the Laws of 1985 of the State of New York, as amended, to effectuate the purposes of the New York City Energy Cost Savings Program (the "Program").
  1. The purpose of the Program is to encourage industrial and commercial development, by encouraging businesses to relocate to targeted areas of the City and providing incentives to business already located in such areas to expand or improve their industrial and commercial space. The Program provides a reduction of certain energy costs related to the transmission and distribution of electricity and natural gas for a period of twelve (12) years, including reductions in the cost of energy services purchased from the New York City Public Utility Service.
  2. These rules set forth the requirements for applications, the standards and criteria to determine eligibility for reduced energy costs and the amount available for** reductions in energy costs, as well as procedures for review of determinations made in connection with the Program.

§ 5-02 Definitions.

As used in these rules, the following terms shall have the respective meanings set forth below:

Act. “Act means Chapter 6 of Title 22 of the Administrative Code of the City of New York, as enacted by Local Law 54 of the Laws of 1985 of the City of New York, as amended by Local Law 56 of the Laws of 1989 of the City of New York, Chapters 256 and 257 of the Laws of 1991, Chapter 154 of the Laws of 1999, Chapters 103 and 472 of the Laws of 2000, and Chapter 107 of the Laws of 2003 of the State of New York, as authorized by Chapter 551 of the Laws of 1985 of the State of New York, as amended by Chapters 59 and 825 of the Laws of 1986, Chapter 760 of the Laws of 1988, Chapters 256 and 257 of the Laws of 1991, Chapter 154 of the Laws of 1999, Chapters 103 and 472 of the Laws of 2000, and Chapter 107 of the Laws of 2003 of the State of New York.

Applicant. “Applicant” means any person applying individually or jointly for benefits under ECSP, or a holding company, parent corporation, or subsidiary or affiliated corporation so applying on behalf of any of the foregoing.

Application. “Application” means the application for a certificate of eligibility and shall include all supporting exhibits submitted, and statements made, by an applicant to the commissioner for the purpose of determining such applicant’s eligibility for benefits under ECSP.

Assessed value. “Assessed value” means the assessed value of the real property and buildings thereon as assessed for tax purposes during the tax year in which improvements to such real property and buildings thereon commenced, as required by and referred to in the Act and these rules.

Average monthly consumption. “Average monthly consumption” means, for each natural gas account, the average number of therms of natural gas consumed per month during the preceding twelve billing monthly or six bimonthly billing cycles.

Average monthly load factor. “Average monthly load factor” means, for each electric account, the average monthly load factor for the preceding 12-month period, determined once annually using the most recently available twelve months of load factor data.

Benefit period. “Benefit period” means the number of months a recipient is eligible to receive a special rebate, which period shall not exceed one hundred and forty-four (144) consecutive months, beginning on the effective date of the recipient’s certificate of eligibility.

Building. “Building” means articles, structures, substructures and superstructures erected upon, under, or above real property, or affixed thereto, and fixtures (other than trade fixtures) and other improvements erected or situated thereon.

Building permit. “Building permit” means a permit approving proposed construction work issued by the New York City Department of Buildings, DBS or other agency of the City authorized by law to receive and approve plans for construction work. A building permit shall include permits or a new building, alteration, foundation, plumbing, sign or equipment work and may, at the option of the applicant, include a permit for partial demolition or earthwork.

Category I on-site cogenerator. “Category I on-site cogenerator” shall mean an on-site cogenerator that produces electricity for an eligible energy user that was certified before July 1st, 2003.

Category II on-site cogenerator. “Category II on-site cogenerator” shall mean an on-site cogenerator, other than a clean on-site cogenerator, that was certified after June 30, 2003.

Certificate of eligibility. “Certificate of eligibility” means the document or documents issued by the commissioner evidencing the eligibility and qualification of an applicant to receive a special rebate. The certificate of eligibility shall include such information as is required pursuant to 66 RCNY § 5-42(b).

Charter. “Charter” means the New York City Charter, as amended.

City. “City” means The City of New York.

Clean on-site cogenerator. “Clean on-site cogenerator” shall mean an on-site cogenerator, the electricity generating facility of which has an emission rate for nitrous oxides of no more than three tenths of one pound per megawatthour. For purposes of determining the emissions of such electricity generating facility, the emissions for such facility shall be reduced by the amount of any nitrous oxide emissions by boiler plants and/or other generators located on the same site as the on-site cogenerator that were or will be avoided by virtue of the electricity generating facility’s production of thermal products used by an eligible energy user(s) for productive purposes.

Code. “Code” means the Administrative Code of the City of New York, as amended.

Commercial development pressure area. “Commercial development pressure area” means those areas of the City as set forth in subdivision (a) of § 22-601 of the code.

Commissioner. “Commissioner” means the Commissioner of DBS or his or her designee or his or her successor in function.

Competitive transition charge. “Competitive transition charge” means a charge that is regulated by the PSC, associated with charges for transmission and distribution, and designed to enable a utility to mitigate or recover its above-market costs of generating electricity.

Con Edison. “Con Edison” means the Consolidated Edison Company of New York, Inc.

DBS or DSBS. “DBS” or “DSBS” shall mean the New York City Department of Small Business Services, formerly known as the Department of Business Services, or its successor in function.

DOF. “DOF” means the New York City Department of Finance or its successor in function.

Discount. “Discount” means the amount of a reduction in a bill for energy services rendered to a vendor or NYCPUS by a utility, or to a vendor by NYCPUS, in accordance with the requirements of 66 RCNY § 5-15, equal to the special rebates made by such vendor or NYCPUS to eligible energy users, eligible owners or qualified eligible energy users.

ECSP or Program. “ECSP” or the “Program” means the Program described in the Act and these rules.

Effective date. “Effective date” means the effective date of a certificate of eligibility, which date is the first day of the first billing cycle after a certificate of eligibility is issued.

Eligible charges. “Eligible charges” mean charges for energy services, system benefits charges and competitive transition charges, including service discounts, by a utility determined in accordance with 66 RCNY § 5-13(a), to which charges the applicable percentages in 66 RCNY § 5-16 or 66 RCNY § 5-18 are applied to determine the amount of a special rebate.

Eligible energy user. “Eligible energy user” means any non-residential user of energy services, that purchases such energy services directly from a utility, a vendor, NYCPUS or an on-site cogenerator, and that satisfies the applicable criteria set forth in Subchapter B of these rules.

Eligible move-in area. “Eligible move-in area” means:

   (1) with respect to an applicant that relocates from (i) areas lying south of the center line of 96th Street in the Borough of Manhattan, or (ii) all areas outside of the City, to replacement premises, all areas within the City, except those areas lying south of the center line of 96th Street in the Borough of Manhattan;

   (2) with respect to an applicant that relocates from premises within a commercial development pressure area to replacement premises, all areas within the City except (i) those areas lying south of the center line of 96th Street in the Borough of Manhattan and (ii) commercial development pressure areas;

   (3) with respect to an applicant that occupies premises that meet the criteria of 66 RCNY § 5-12(b) (specially eligible premises), all areas within the City except those areas lying south of the center line of 96th Street in the Borough of Manhattan; and

   (4) with respect to an applicant that occupies premises that meet the criteria of 66 RCNY § 5-12(c) (manufacturing), those areas lying south of the center line of 96th Street in the Borough of Manhattan.

Eligible move-out area. “Eligible move-out area” means with respect to an applicant that relocates and occupies replacement premises:

   (1) areas lying south of the center line of 96th Street in the Borough of Manhattan;

   (2) all areas outside of the City; or

   (3) a commercial development pressure area.

Eligible on-site cogenerator charges. “Eligible on-site cogenerator charges” shall mean charges for energy services purchases from a utility related to the delivery of natural gas to a category II on-site cogenerator determined in accordance with 66 RCNY § 5-13(d).

Eligible owner. “Eligible owner” means an owner, manager or operator of a specially eligible premises that satisfies the applicable criteria of Subchapter B of these rules.

Eligible premises. “Eligible premises” mean those premises that are: (1) replacement premises; or (2) specially eligible premises.

Eligible public utility service charges. “Eligible public utility service charges” mean charges for energy services purchased from NYCPUS, determined in accordance with 66 RCNY § 5-13(b) of these rules, to which the applicable percentage in 66 RCNY § 5-16 or 66 RCNY § 5-18 are applied to determine the amount of a special rebate.

Employee. “Employee” shall mean any full-time or part-time employee (as provided herein) of an eligible energy user, an affiliate of an eligible energy user, and any contractor working exclusively at an eligible site for operations of an eligible energy user (or an affiliate of an eligible energy user) eligible to receive special rebates. The number of part-time employees and contractors shall be calculated by dividing (i) the number of hours worked by employees, other than full-time employees, and contractors at the eligible energy user’s eligible premises, during the applicable period; by (ii) the number of weeks in the applicable period; and then by (iii) 35 person-hours.

Energy conservation measures. “Energy conservation measures” shall have the meaning set forth in subdivision (p) of § 22-601 of the code.

Energy services. “Energy services” shall mean (i) the transportation of electric or natural gas commodity within the franchised service territory of a utility through such utility’s local transmission or distribution assets, (ii) metering of a user’s consumption, including meter reading, and (iii) billing services related to the preparation and collection of the user’s utility bill. Energy services shall not include the provision of gas or electric commodity, transmission-related functions for which charges are rendered by the New York Independent System Operator, nor shall they include transportation of gas or electric commodity to a utility system, except that gas pipeline services shall be considered energy services for purposes of calculating rebates for users eligible to receive rebates under 66 RCNY § 5-18(b)(5). Energy services shall not include transportation of natural gas to the extent the gas transported is used by a category I on-site cogenerator or a clean on-site cogenerator in the production of electricity that is eligible for special rebates under 66 RCNY § 5-14(f).

Energy services bill. “Energy services bill” means the statement of charges for energy services rendered to a recipient by: (i) a utility; (ii) a vendor; or (iii) NYCPUS.

FERC. “FERC” shall mean the Federal Energy Regulatory Commission.

Hotel. “Hotel” means a building or portion thereof that is regularly used and kept open as such for the lodging of guests including an apartment hotel, a motel, boarding house or club or any other facility whose principal use is residential accommodation, whether or not meals are served.

ICIP. “ICIP” means the New York City Industrial and Commercial Incentive Program as codified in Title 11, Chapter 247, Part 3 of the Code, as amended.

IDA. “IDA” means the New York City Industrial Development Agency established pursuant to § 850 of the General Municipal Law of the State of New York, as amended.

Keyspan. “Keyspan” means the Keyspan Energy Delivery New York.

LIPA. “LIPA” shall mean the Long Island Power Authority, or its subsidiary.

Manufacturing activity. “Manufacturing activity” means an activity involving the assembly of goods to create a different article or the processing, fabrication, or packaging of goods.

Monthly load factor. “Monthly load factor” means, for each electric account, the number determined by dividing (a) the account’s energy consumption, measured in kilowatt hours, for a monthly billing period, by (b) the peak electric demand, measured in kilowatts, for such billing period multiplied by the number of billing days in the period multiplied by 24 hours.

NYCPUS. “NYCPUS” means the New York City Public Utility Service established by Local Law No. 78 of 1982, codified in part as Title 22, Chapter 3 of the Code.

On-site cogenerator. A person, other than a utility, that owns an electric generating facility that simultaneously or sequentially produces electricity and useful thermal energy, provided that substantially all of such electricity shall be used by one or more eligible energy users that occupy the same site as such generating facility. An on-site cogenerator may be the same or a separate person as such eligible energy user.

Person. “Person” means any individual, partnership, association, corporation, limited liability company, estate or trust, and any combination of the foregoing.

Premises. “Premises” mean any building or portion thereof that, for purposes of these rules is, or has been, occupied in whole or in part by an applicant pursuant to a deed, contract of sale, lease or otherwise.

Public Service Commission or PSC. “Public Service Commission” or “PSC” means the Public Service Commission of the State of New York, created by and defined in § 2 of the Public Service Law of the State of New York.

Qualified eligible energy user. “Qualified eligible energy user” shall have the meaning ascribed to such term in subdivision (r) of § 22-601 of the code.

Real property. “Real property” means land and articles, structures, substructures and superstructures erected upon, under or above the land or affixed thereto and articles of equipment, as described by, and subject to assessment for taxation pursuant to subdivision (a), (b), (f) or (i) of § 102(12) of the Real Property Tax Law of the State of New York, but not including any incorporeal right, franchise or special franchise.

Recipient. “Recipient” means an applicant that has satisfied the eligibility criteria of Subchapter B of these rules and has been certified by the commissioner as: (1) an eligible energy user; (2) an eligible owner; (3) a qualified eligible energy user; or (4) a category I on-site cogenerator, a category II on-site cogenerator, or a clean on-site cogenerator.

Replacement premises. “Replacement premises” mean premises occupied by an applicant in replacement of previously occupied premises from which the applicant has relocated, provided the premises satisfy the criteria set forth in 66 RCNY § 5-12(a).

Retail vendor. “Retail vendor” means any applicant that:

   (1) is predominantly engaged in the sale, as defined in § 1101(b)(4) of the Tax Law of the State of New York, other than through the mail or by the telephone or other means of electronic communication, of tangible personal property to any person, for any purpose unrelated to the trade or business of such person; or

   (2) is predominantly engaged in selling services to persons which services generally involve the physical, mental and/or spiritual care of such persons for any purpose unrelated to the trade or business of such persons; or

   (3) is predominantly engaged in selling services to persons for any purpose which services generally involve the physical care of the personal property of such persons for any purpose unrelated to the trade or business of such persons; provided, however, where such sale of tangible personal property or services described herein is performed by only one or more operating units, divisions or subdivisions of the applicant, or at only one or more locations, only such operating units, divisions, or subdivisions, or such locations, shall come within the definition contained herein.

Service classification. “Service classification” means the classification used by a utility in its rate schedule that sets forth the particular rates charged for energy services that are applicable to particular kinds of customers.

Site visit. “Site visit” means an on-site inspection performed by or at the direction of DBS to determine the use of energy services or occupancy of certain buildings, real property or any portion of such building or real property.

Special rebate. “Special rebate” means the amount of reduction in an energy services bill rendered by a utility, a vendor or NYCPUS for energy services to an eligible energy user, a qualified eligible energy user, an eligible owner, or an agent of any of these, or a category I, II or clean on-site cogenerator, and calculated in accordance with the provisions set forth in 66 RCNY § 5-14.

Specially eligible premises. “Specially eligible premises” means non-residential premises that meet the requirements set forth in subdivision (i) of § 22-601 of the code and 66 RCNY § 5-12(b).

Survey. “Survey” means a study or report based on on-site field inspections, professional surveys by a licensed professional engineer, data collection or meter readings or other actions to determine the use, consumption and application of energy services or the occupancy of certain buildings or real property, or portions thereof.

Systems benefit charge. “Systems benefit charge” means a charge that is regulated by the PSC and that a utility is required to collect from its customers for the purposes of funding public benefit programs.

Targeted eligible premises. “Targeted eligible premises” shall have the meaning set forth in subdivision (s) of § 22-601 of the code.

UDC. “UDC” means the New York State Urban Development Corporation or any subsidiary thereof created and defined by § 6254 of the Unconsolidated Laws of the State of New York.

Utility. “Utility” means any provider of energy services within the City that is subject both to the jurisdiction and general supervision of the PSC and to a tax imposed pursuant to chapter 11 of title 11 of the code, and for purposes of this chapter 5, shall include LIPA, or its subsidiary, to the extent that LIPA provides energy services within the City of New York and makes payment to such City that is equivalent to the tax imposed on utilities pursuant to Chapter 11 of Title 11 of the code.

Utility credit. “Utility credit” means a credit to which a utility is entitled, in accordance with the rules promulgated by DOF, against the tax imposed under Chapter 11 of Title 11 of the code, and equal to the aggregate amount of all special rebates and/or discounts granted by such utility in accordance with the requirements of the Act and these rules.

Vendor. “Vendor” means a vendor of energy services, as defined in subdivision (k) of § 22-601 of the code, including any person, corporation or other entity not subject to the jurisdiction and general supervision of the PSC, that furnishes or sells energy services to an eligible energy user, eligible owner, qualified eligible energy user or an on-site cogenerator that is submetered as an incident to leasing, subleasing, licensing or otherwise permitting such user to rent or occupy premises of such vendor.

§ 5-03 Law Governing Applications.

Applications pending as of the effective date of these rules and applications filed subsequently shall be governed by these rules. Persons that have been certified as eligible for special rebates or discounts under provisions of law in effect before November 1, 2000, are not required to reapply in order to receive benefits under provisions of Chapter 472 of the Laws of 2000.

§ 5-04 Rules of Construction.

(a)  These rules shall be interpreted and enforced in accordance with the General Construction Law of the State of New York except where the context otherwise requires or a different rule is provided by these rules.
  1. These rules shall be construed consistently with the applicable state and local law cited in this Subchapter of these rules including any amendments thereto.
  2. Provisions of these rules that restate the Act and that do not provide rules or procedures for the exercise of regulatory authority shall not be construed as increasing or diminishing any rights or duties created by the Act, but may be used to assist in the interpretation of the Act.
  3. When the interpretation or application of a provision of these rules in a particular case is uncertain, the description of the purpose and objectives of ECSP set forth in 66 RCNY § 5-01 shall be used to assist in the interpretation and application of such provision.
  4. Reference to particular provisions of law in these rules shall be deemed to refer to such provisions as interpreted by the applicable decisions of Federal and New York State courts.

§ 5-05 Material Misrepresentations, Misstatements and Omissions.

(a)  An applicant's or recipient's refusal to provide factual information or to cooperate with the commissioner or his or her staff in the review of the facts and circumstances upon which a determination of eligibility or of continued eligibility is to be based shall constitute grounds for denial of an applicant's eligibility, or for suspension or revocation of a recipient's certificate of eligibility.
  1. The commissioner may deny an application for a certificate of eligibility if the application is found to contain material misrepresentations, misstatements or omissions.
  2. The commissioner may suspend or revoke a certificate of eligibility if a recipient is found to have made material misrepresentations or misstatements or omissions concerning the prior, current or future status of its continued eligibility under ECSP.
  3. Denial of an application for a certificate of eligibility or the suspension or revocation of a certificate of eligibility pursuant to the provisions of this Subchapter shall be subject to an opportunity to be heard pursuant to 66 RCNY §§ 5-45, 5-46 and 5-47.

§ 5-06 Actions of City Employees.

Employees and agents of the City whose duties require them to take actions in connection with ECSP shall perform such duties, subject to the lawful direction of their supervisors and appropriate public officers, in accordance with these rules. However, noncompliance by such employees or agents with the requirements of these rules shall not be deemed to void any obligation of, or to waive any requirement imposed on, an applicant or recipient, or to excuse any noncompliance by an applicant or recipient with the provisions hereof or of any law. Such noncompliance shall not create any right of relief from the City or its employees or agents in favor of any person adversely affected thereby.

§ 5-07 Separability.

If any provision of these rules or their application shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remaining provisions of these rules, but shall be confined in its operation to the provision thereof directly involved.

§ 5-08 Effective Date of Rules. [Repealed]

(a)  Only eligible energy users, eligible owners, qualified eligible energy users and on-site cogenerators, as described in, and to the extent permitted by, the Act and these rules are eligible for special rebates under ECSP.
  1. Eligible energy users, eligible owners, qualified eligible energy users and on-site cogenerators shall not include the following users of electricity and/or natural gas:

   (1) residential users;

   (2) government agencies;

   (3) public benefit corporations, or instrumentalities thereof;

   (4) hotels; and

   (5) retail vendors.

  1. An eligible energy user is an applicant or recipient that meets the criteria in paragraph (1) of this subdivision or is an eligible owner that meets the criteria in paragraph (2) of this subdivision:

   (1) Such applicant or recipient: (i) purchases energy services from a utility, vendor or NYCPUS; (ii) relocates to and occupies premises that qualify as replacement premises or occupies premises that are specially eligible premises or a portion of such premises; and (iii) otherwise complies with all requirements of the Act and these rules applicable to an eligible energy user or

   (2) Such applicant or recipient, referred to as an eligible owner, (i) purchases energy services from a utility or NYCPUS; (ii) owns, operates or manages real property and/or a building, which building and/or real property qualifies as a specially eligible premises; and (iii) otherwise complies with all requirements of the Act and these rules applicable to an eligible owner.

   (3) An applicant or recipient may, if all requirements are met, qualify as both (i) an eligible owner and (ii) an eligible energy user and/or qualified eligible energy user. In such cases, the applicant or recipient may be an eligible owner with respect to the specially eligible premises as a whole and therefore may be entitled to a special rebate applied against certain eligible charges with respect to common areas and/or equipment, as provided in 66 RCNY § 5-13(c). Such an applicant or recipient may also be an eligible energy user or qualified eligible energy user with respect to the premises it occupies within such specially eligible premises or targeted eligible premises, as the case may be, and therefore may be entitled to a special rebate applied against certain other eligible charges or eligible public utility charges with respect to such premises, as provided in these rules. Provided, however, that no portion of energy services used by such an applicant or recipient shall be the basis for more than one special rebate.

  1. A qualified eligible energy user is a recipient that: (i) has been certified as a qualified eligible energy user in accordance with the Act prior to November 1, 2000; (ii) purchases energy services from NYCPUS or a vendor that purchases such services from NYCPUS; and (iii) otherwise complies with all requirements of the Act and these rules applicable to a qualified eligible energy user.
  2. 1)  An on-site cogenerator is an applicant or recipient that: (i) meets the definition of a category I or category II on-site cogenerator or a clean on-site cogenerator in 66 RCNY § 5-02; (ii) purchases energy services relating to natural gas from a utility; (iii) otherwise complies with all requirements of the Act and these rules applicable to a category I or category II on-site cogenerator or a clean on-site cogenerator, respectively, and (iv) sells substantially all its electricity output to eligible energy users on the same site.

   (2) A category I or clean on-site cogenerator may, if all requirements are met, qualify as an eligible energy user with respect to charges for energy services that are not used in the production of electricity, including charges for the production of thermal product, provided, however, that no portion of energy services, or natural gas energy services in the case of a category I on-site cogenerator or a clean on-site cogenerator, used by such on-site cogenerator shall be the basis for more than one special rebate.

  1. Notwithstanding the foregoing provisions of this section, an occupant of replacement premises, specially eligible premises, or targeted eligible premises shall not be an eligible energy user or qualified eligible energy user unless:

      (i) the energy services used and electricity and natural gas consumed by such occupant at such premises are individually and accurately metered or submetered and billed so as to enable a determination of the occupant’s usage of and charges for energy services, natural gas and electricity; and

      (ii) for any occupant purchasing energy services, natural gas or electricity from a vendor, the price charged by such vendor shall be no higher than the price that the occupant would have been charged directly by a utility for energy services pursuant to the applicable tariffs of the PSC or FERC, provided that an additional fee, not exceeding 12% may be charged by such vendor; and

      (iii) such vendor shall separately state in each bill for such services, electricity and natural gas the price, charges and fees (if any) that are included in such bill and the amount of the special rebate made to such occupant or that no special rebate has been made.

§ 5-12 Premises.

(a)  Criteria for replacement premises.

   (1) In order for an applicant’s premises to qualify as replacement premises:

      (i) the applicant must take occupancy of such premises after May 3, 1985;

      (ii) the applicant must continue such occupancy while a special rebate is received;

      (iii) the premises must:

  1. be non-residential;
  2. be premises for which an applicant has entered into a written agreement to buy and/or lease after May 3, 1985;
  3. be located in an eligible move-in area;
  4. except as otherwise provided in subparagraph (E) of this paragraph, be premises with provisions to receive energy services either: (I) from a utility; (II) a vendor; or (III) NYCPUS; and
  5. if such premises receive electricity from an on-site cogenerator, such on-site cogenerator shall occupy the same site as such premises;

      (iv) the premises such applicant previously occupied must have been located in an eligible move-out area, and the applicant must have occupied such premises for a continuous period of twenty-four (24) months during the thirty (30) month period immediately preceding the applicant taking occupancy of its new premises.

   (2) An applicant’s new premises shall not be considered replacement premises if the new premises are occupied as the result of a merger of the applicant with or into any other person, firm or entity, or the acquisition, by the applicant, of all or substantially all of the capital stock or assets and properties of any other person, firm or entity, unless:

      (i) the new premises were formerly occupied by such other person, firm or entity;

      (ii) such other person, firm or entity: (i) had substantially ceased business operations at the new premises prior to occupancy by the applicant; and (ii) had either: (A) filed or acquiesced in the filing against it of a petition for any relief under any bankruptcy or similar law for the protection of debtors, prior to occupancy by the applicant; or (B) applied for or acquiesced in the appointment of a trustee or receiver for all or a substantial portion of its assets and properties, prior to occupancy by the applicant;

      (iii) the applicant transfers or relocates, from its previously occupied premises to the new premises, a substantial amount of personnel, and/or machinery or equipment, and/or other tangible assets, and/or executory contracts (contracts not yet performed in whole or in part, and which will be performed at the new premises); and

      (iv) the applicant conducts, at the new premises, the same type of business conducted at its previously occupied premises and/or a type of business reasonably related thereto or constituting a reasonable expansion or growth therefrom.

  1. Criteria for specially eligible premises.

   (1) Specially eligible premises shall meet the applicable requirements of subdivision (i) of § 22-601 of the code and:

      (i) the real property and/or building in which such premises are located shall be substantially improved by construction or renovation as described or identified in either:

  1. an ICIP pre-application or application filed by the owner, manager or operator of the real property and/or building; or
  2. an IDA application filed by such owner, operator or manager; or
  3. a lease for the real property submitted for approval to UDC or to the City in accordance with the applicable Charter provisions (provided that such lease need not describe or identify buildings located or to be located on such real property), whichever is applicable;

      (ii) the expenditures for such construction or renovation required by subdivision (i) of § 22-601 of the code shall occur either:

  1. subsequent to the filing of such final application or preliminary application with ICIP, and the issuance of a building permit, if required, for such construction or renovation; or
  2. subsequent to the receipt of an inducement resolution from IDA for the project described in such IDA application; or
  3. subsequent to the approval of the lease described in subparagraph (4) or (5) of subdivision (i) of § 22-601 of the code by UDC or by the City in accordance with the applicable Charter provisions;

      (iii) for applications made after the effective date of these rules, the expenditures made for such construction or renovation described in paragraph (1) of this subdivision (b) of this 66 RCNY § 5-12, must be in excess of ten percent (10%) of the assessed value of the real property and building in the tax year in which such construction or renovation commenced;

      (iv) the real property and building are located in an eligible move-in area;

      (v) the premises have provisions to receive energy services either: (I) directly from a utility; or (II) from a vendor; or (III) from NYCPUS;

      (vi) the applicant must take occupancy of such premises and continue in such occupancy while benefits are received;

      (vii) if such premises receive electricity from an on-site cogenerator, such on-site cogenerator shall occupy the same site as such premises; and

      (viii) if the applicant’s premises are contained in a newly constructed building, such building must meet the requirements of the New York State Energy Conservation Construction.

   (2) Notwithstanding the provisions set forth in subparagraph (A), paragraph (1) of this subdivision (b), an applicant that occupies premises within a building that would otherwise qualify as eligible to receive benefits under ICIP except that the real property on which such building is located is exempt from real property taxation, may be eligible as an occupant of premises within specially eligible premises, if all other applicable requirements of eligibility of this Subchapter B are met and such applicant receives a certification from DOF stating that the premises are within a building for which expenditures for improvements have been made in compliance with the applicable provisions of subdivision (i) of § 22-601 of the code and this paragraph (b).

  1. Special criteria applicable to manufacturing premises located in Manhattan below 96th Street. Non-residential premises contained in real property located in the area lying south of the center line of 96th Street in the Borough of Manhattan may qualify as specially eligible premises if the criteria in paragraph (4) of subdivision (i) of § 22-601 of the code and the provisions of subdivision (b) of this 66 RCNY § 5-12 for specially eligible premises are otherwise satisfied where such premises are used primarily for manufacturing activities, provided such premises shall be improved as a result of expenditures in an amount in excess of ten per centum of the assessed value of such real property attributable to such premises at which such real property was assessed for tax purposes for the tax year in which such improvements commenced.

§ 5-13 Charges.

(a)  Eligible charges.

   (1) Eligible charges are charges for energy services purchased by an eligible energy user, an eligible owner, or a qualified eligible energy user from a utility or from a vendor at a rate or rates established pursuant to an order or rule of the PSC or FERC, other than charges for the purchase of the commodity of natural gas or electricity, and shall include applicable rate reductions for economic development or similar purposes, and all taxes payable thereon and shall exclude charges in accordance with paragraph (2) of this subdivision (a).

   (2) Eligible charges shall not include the following charges:

      (i) any special charges on such bills relating to energy services, including, but not limited to, collection charges, late payment charges, excess distribution charges, or any additional fee charged by a vendor to an eligible energy user for energy services, as authorized by 66 RCNY § 5-11(f)(ii);

      (ii) charges for energy services that are resold; and

      (iii) charges for energy services used in the production of electricity or for heating the premises.

  1. Eligible public utility service charges.

   (1) Eligible public utility service charges are actual charges for energy services provided by a public utility service, including charges for public utility service administrative services, and shall include all taxes payable thereon, and shall exclude charges in accordance with paragraph (2) of this subdivision (b).

   (2) Eligible public utility service charges shall not include the following charges:

      (i) any special charges on such bills relating to energy services, including, but not limited to, collection charges, late payment charges, excess distribution charges, or any additional fee charged by a vendor to an eligible energy user or qualified eligible energy user for energy services, as authorized by 66 RCNY § 5-11(f)(ii);

      (ii) charges for such energy services that are resold; and

      (iii) charges for energy services used in the production of electricity or for heating the premises.

  1. Eligible charges for common areas in specially eligible premises.

   (1) With respect to an eligible owner that owns, operates or manages specially eligible premises or targeted eligible premises in which at least fifty percent (50%) of the square footage of such specially eligible premises is occupied by recipients, eligible charges or eligible public utility service charges shall include the following:

      (i) eligible charges or eligible public utility charges for any common areas within the specially eligible premises, including but not limited to, the elevators, roof, parking garages, lobby, and vestibules; and

      (ii) eligible charges or eligible public utility charges for the office space that is reasonably required for use by the eligible owner for the operation or management of the specially eligible premises, as determined by the commissioner, if applicable.

  1. Eligible on-site cogenerator charges.

   (1) Eligible on-site cogenerator charges are charges for energy services purchased by a category II on-site cogenerator from a utility related to the delivery of natural gas to such co-generator at rates established pursuant to an order or rule of the PSC or the FERC, and shall include applicable rate reductions for economic development or similar purposes, and all taxes payable thereon and shall exclude charges in accordance with paragraph (2) of this subdivision.

   (2) Eligible on-site cogenerator charges shall not include the following charges:

      (i) any special charges on such bills relating to energy services, including, but not limited to, collection charges, late payment charges, excess distribution charges, or any additional fee charged by a vendor to an eligible energy user for energy services, as authorized by 66 RCNY § 5-11(f)(ii);

      (ii) charges for energy services that are resold;

      (iii) charges for energy services used for heating the premises; and

      (iv) any charges that qualify as eligible charges and for which special rebates are provided under other provisions of ECSP.

  1. Determination of eligible charges, eligible public utility service charges, and eligible on-site cogenerator charges by the commissioner.

   (1) The commissioner shall base his or her determination of which charges are eligible charges, eligible public utility charges, or eligible on-site cogenerator charges based upon:

      (i) representations and/or certifications made by the applicant in its application to ECSP;

      (ii) a review of the applicant’s prior energy services bills;

      (iii) a site visit; and/or

      (iv) any other relevant factors relating to use and occupancy that is deemed by the commissioner to be relevant in making such a determination.

   (2) An eligible energy user, qualified eligible energy user, or category II on-site co-generator has the burden of demonstrating to the commissioner that charges for energy services are eligible charges, eligible public utility service charges, or eligible on-site cogenerator charges, respectively. If a determination of eligible charges, eligible public utility service charges, or eligible on-site cogenerator charges cannot be ascertained by the commissioner without a survey or the eligible energy user, qualified eligible energy user, or category II on-site cogenerator is not satisfied with the commissioner’s determination of such charges, such user may request that the commissioner cause a survey to be conducted by a licensed professional engineer satisfactory to DSBS at such user’s expense, of the applicant’s usage of energy services. Upon completion of the survey, the professional who prepares such survey shall submit the report, together with a certification as to the amount of eligible charges or eligible public utility service charges to the commissioner for his or her review.

   (3) The commissioner, after reviewing all relevant documentation submitted by the applicant, shall, in his or her sole discretion, determine those charges that constitute the eligible energy user’s, qualified eligible energy user’s, or category II on-site cogenerator’s eligible charges, eligible public utility service charges, or eligible on-site cogenerator charges to which a special rebate may be applied. If such user disagrees with the commissioner’s findings, such user may request an opportunity to be heard in accordance with 66 RCNY §§ 5-45, 5-46 and 5-47.

§ 5-14 Special Rebates.

(a) (1) A utility that sells energy services to an eligible energy user or eligible owner that applied for ECSP benefits after October 31, 2000, shall be required to make a special rebate to such user equal to the product of the applicable percentage specified for special rebates in the schedule contained in 66 RCNY § 5-16 and the eligible charges for such energy services.

   (2) A utility other than LIPA that sells energy services to an eligible energy user or eligible owner that applied for ECSP benefits prior to November 1, 2000 shall be required to make a special rebate to such user equal to the product of the applicable percentage specified for special rebates in the schedule contained in § 5-18 of these rules and the eligible charges for such energy services.

   (3) A utility that sells energy services to a category II on-site cogenerator shall be required to make a special rebate to such cogenerator equal to the product of the applicable percentage specified for special rebates in the schedule contained in 66 RCNY § 5-16 and the eligible on-site cogenerator charges for such energy services.

  1. Where, pursuant to a written agreement between NYCPUS and the power authority of the state of New York, NYCPUS sells energy services to an eligible energy user or eligible owner that has been individually approved by such power authority and certified as an eligible energy user or eligible owner pursuant to § 22-602(c) of the Code prior to November 1, 2000, NYCPUS shall make such special rebate to such user in the amount or amounts derived by calculating the full amount of the special rebate to which such eligible energy user or eligible owner would have been entitled pursuant to the schedule contained in 66 RCNY § 5-18 for eligible charges relating to the purchase of such energy services had such user purchased such energy services directly from the utility, and subtracting from such full amount the difference between the eligible charges relating to the purchase of such energy services had such eligible energy user or eligible owner purchased the energy services directly from the utility and the eligible public utility service charges relating to the purchase of such energy services actually charged to such eligible energy user by NYCPUS for actual purchases of energy services from NYCPUS; except that (i) in no event shall the amount of such special rebate exceed the amount of the special rebate to which such eligible energy user would have been entitled pursuant to the schedule contained in 66 RCNY § 5-18 had such eligible energy user or eligible owner purchased the energy services directly from the utility at the price charged by such utility, and (ii) for any monthly billing period where the calculation of such special rebate results in a negative number, the amount of such special rebate shall be deemed to be zero.
  2. 1)  Where, pursuant to a written agreement between NYCPUS and the power authority of the state of New York, NYCPUS sells energy services to an eligible energy user or eligible owner that has been individually approved by such power authority, has applied for ECSP benefits after October 31, 2000, NYCPUS shall make such special rebate in the amount of the product of the applicable percentage for special rebates specified in the schedule contained in 66 RCNY § 5-16 and the eligible public utility service charges for such energy services.

   (2) Where, pursuant to such an agreement, NYCPUS sells energy services to a qualified eligible energy user that has been individually approved by such power authority, applied for ECSP benefits prior to November 1, 2000, regardless of the date of certification, NYCPUS shall make such special rebate in the amount of the product of the applicable percentage for special rebates specified in the schedule contained in 66 RCNY § 5-18 and the eligible public utility service charges for such energy services.

   (3) A user or owner that applied for ECSP benefits as a qualified eligible energy user before November 1, 2000, but was not certified pursuant to 66 RCNY § 5-36 as such prior to such date, may be certified as an eligible energy user after such date and the special rebates to which such user or owner is eligible shall be determined pursuant to 66 RCNY § 5-18 in accordance with these rules.

  1. 1)  A vendor that sells energy services provided by a utility to an eligible energy user, eligible owner, or on-site cogenerator that applied for ECSP benefits after October 31, 2000, may elect to provide a special rebate that shall be the product of the applicable percentage for special rebates specified in the schedule contained in 66 RCNY § 5-16 and the eligible charges or eligible on-site cogenerator charges for such sales of energy services made by such vendor.

   (2) A vendor that sells energy services provided by a utility to an eligible energy user, eligible owner, or on-site cogenerator that applied for ECSP benefits prior to November 1, 2000, may elect to provide a special rebate that shall be the product of the applicable percentage for special rebates specified in the schedule contained in § 5-18 of these rules and the eligible charges or eligible on-site cogenerator charges for such sales of energy services made by such vendor.

  1. 1)  A vendor that sells energy services provided by NYCPUS to an eligible energy user or eligible owner that applied for ECSP benefits after October 31, 2000, may elect to provide a special rebate that shall be the product of the applicable percentage specified for special rebates in the schedule contained in 66 RCNY § 5-16 and the eligible public utility service charges for sales of energy services made by such vendor.

   (2) A vendor that sells energy services provided by NYCPUS to a qualified eligible energy user that was certified pursuant to § 22-602(c) of the Code prior to November 1, 2000, or to an eligible energy user or eligible owner that applied for ECSP benefits prior to November 1, 2000 and was certified pursuant to 66 RCNY § 5-36 after October 31, 2000 may elect to provide a special rebate that shall be the product of the applicable percentage specified for special rebates in the schedule contained in 66 RCNY § 5-18 and the eligible public utility service charges for sales of energy services made by such vendor.

  1. 1)  A utility that delivers natural gas to a category I on-site cogenerator that produces electricity for an eligible energy user or eligible owner certified before July 1, 2003, and a utility that delivers natural gas to a clean on-site cogenerator that produces electricity for an eligible energy user and is certified after June 30, 2003, shall be required to make special rebates against the energy bill rendered to such on-site cogenerator by such utility for the sale or delivery, or both, of such gas in the amount or amounts derived by taking the product of 4.44 cents multiplied by an eligibility factor, multiplied by the number of kilowatt hours of electricity produced by such on-site cogenerator and used by such eligible energy user or eligible owner during the billing period, excluding the charges for electricity used for heating any premises, any special charges on such bill, including but not limited to, collection charges, late payment charges, or excess distribution charges, and charges for energy that is resold; where the eligibility factor shall equal 100 percent during the first eight years after initial certification as an eligible energy user, 80 percent during the 9th such year, 60 percent during the 10th such year, 40 percent during the 11th such year and 20 percent during the 12th and final such year, such years to be calculated in accordance with the provisions of 66 RCNY § 5-19. Provided, however, that the number of kilowatt hours of electricity on which the total of the special rebates payable to a clean on-site cogenerator is based in any calendar or fiscal year as specified by the commissioner pursuant to the formula set forth in this paragraph shall not exceed 13,140,000.

   (2) i)  A category I on-site cogenerator and a clean on-site cogenerator may be eligible to receive special rebates based on eligible charges for transportation of natural gas that is not used in the production of electricity. If eligible, such special rebate for a category I cogenerator providing electricity to an eligible energy user that applied before November 1, 2000, shall be equal to the product of such eligible charges and the rebate percentage determined in accordance with 66 RCNY § 5-18. If eligible, such special rebate for a clean on-site cogenerator or a category I on-site cogenerator providing electricity to an eligible energy user that applied after October 31, 2000, shall be equal to the product of such eligible charges and the rebate percentage determined in accordance with 66 RCNY § 5-16.

  1. Determination of special rebates payable to category I on-site cogenerators and clean on-site cogenerators by the commissioner. (1) The commissioner shall have the authority to determine the information he or she requires to review and determine appropriate special rebates payable under this section. He or she may require electric and/or thermal production to be metered in a reliable manner and that site visits be made to verify meter readings.

   (2) A category I on-site co-generator or clean on-site cogenerator has the burden of demonstrating to the commissioner the amount of electricity generated by the cogenerator and the purposes for which such electricity is used. If a determination of such amount or use cannot be made by the commissioner without a survey or such cogenerator is not satisfied with the commissioner’s determination, the commissioner may require, or such user may request, that a survey of the applicant’s production and usage of energy services be conducted by a person with experience in conducting such surveys satisfactory to DSBS at such user’s expense. Upon completion of the survey, the person who prepares such survey shall submit his or her report, together with a certification as to the amount electricity produced and its use to the commissioner for his or her review.

   (3) A clean on-site cogenerator shall have the burden of demonstrating to the commissioner that its nitrous oxide emissions will not exceed the emissions threshold described herein. If a determination of such amount or use cannot be made by the commissioner without a survey or such cogenerator is not satisfied with the commissioner’s determination, the commissioner may require, or such user may request, that a survey of the applicant’s production and usage of energy services be conducted by a person with experience in conducting such surveys satisfactory to DSBS at such user’s expense. Upon completion of the survey, the person who prepares such survey shall submit his or her report, together with a certification as to the plant’s emissions.

   (4) The commissioner, after reviewing all relevant documentation submitted by the applicant, shall, in his or her sole discretion, determine the special rebate to which such category I cogenerator or clean on-site cogenerator is entitled. If such user disagrees or with the commissioner’s findings, such user may request an opportunity to be heard in accordance with 66 RCNY §§ 5-45, 5-46 and 5-47.

§ 5-15 Discounts.

(a)  A utility that sells energy services to a vendor of energy services shall be required to make a discount to such vendor in an amount equal to the sum of the special rebates certified to such utility by such vendor as having been made by such vendor to eligible energy users and eligible owners in accordance with 66 RCNY § 5-14.
  1. A utility that sells energy services to a public utility service shall be required to make a discount to such public utility service in an amount equal to the sum of the special rebates and discounts certified to such utility by such public utility service as having been made by such public utility service in accordance with 66 RCNY § 5-14.
  2. NYCPUS shall be required to make a discount to a vendor to which it sells energy services equal to the sum of the special rebates certified to NYCPUS by such vendor as having been made by such vendor to eligible energy users, eligible owners or qualified eligible energy users to which such vendor of energy services has resold such energy.

§ 5-16 Table of Percentages Applicable to the Calculation of Special Rebates for Users that Applied for ECSP Benefits After October 31, 2000.

Schedule of Special Rebates

Months During Benefit Period Applicable % for Natural Gas Applicable % for Electricity
First through ninety-sixty 35% 45%
Ninety-seventh through one hundred eighth 28% 36%
One hundred ninth through one hundred twentieth 21% 27%
One hundred twenty-first through one hundred thirty-second 14% 18%
One hundred thirty-third through one hundred forty-fourth 7% 9%

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§ 5-17 Special Rebates for Those that Applied for ECSP Benefits Prior to November 1, 2000 and are Certified Prior to July 1, 2001. [Repealed]

(a)  Paragraph (4) of subdivision (a) of § 22-602 of the code states that the commissioner may increase the applicable percentages set forth in 66 RCNY § 5-16 "in order to maintain the special rebate at levels comparable to those historically provided under the program, pursuant to rules that are generally applicable to distinct classes of energy users." In accordance with this provision, the percentages set forth in 66 RCNY § 5-18(b) shall be applicable to the calculations of special rebates for all eligible energy users, eligible owners, and qualified eligible energy users that applied for ECSP benefits prior to November 1, 2000. These percentages shall be in place from the first billing cycle beginning on or after April 30, 2003.
  1. For all billing cycles prior to the ninety-seventh month of each of the above-noted eligible energy user’s, eligible owner’s and qualified eligible energy user’s benefit period occurring during the period beginning on or after April 30, 2003, each such user shall receive rebates on eligible charges as specified in this paragraph; provided that the applicable rebate percentages shall not, for any affected electric or natural gas account, exceed 100% of the eligible charges or eligible public utility service charges charged in any billing cycle.

   (1) The rebate percentage to be applied to eligible charges for electrical-related energy services provided by Con Edison pursuant to its “PSC No. 9 – Electricity Rate Schedule” or “PSC No. 2 – Retail Access Rate Schedule” shall equal the percentages specified in Attachment A of Appendix A to these rules, which shall vary depending on such user’s average monthly load factor, applicable service classification and the applicable rate, and whether such user receives discounts on service pursuant to a service rider. If, for any affected user, eligible charges for electrical-related energy services were rendered at more than one service classification and/or at more than one rate for a service classification, the rebate percentages specified in Attachment A of Appendix A to these rules shall apply to the extent that each applicable service classification and/or rate and/or service rider applies to such user. To the extent that any user is served under Con Edison’s “PSC No. 9 – Electricity Rate Schedule” its rebate percentages shall be determined as if such user were served under Con Edison’s PSC No. 2 – Retail Access Rate Schedule.

   (2) The rebate percentage to be applied to eligible charges for natural gas-related energy services provided by Con Edison pursuant to its “PSC No. 9 – Gas Rate Schedule” shall equal the percentages specified in Attachment C of Appendix A to these rules, which shall vary depending on such user’s average monthly consumption, applicable service classification and the applicable rate, and whether such user receives discounts on energy services rates pursuant to a service rider or other tariff provision. If, for any affected user, eligible charges for natural gas-related energy services were rendered at more than one service classification and/or at more than one rate for a service classification or if discounted service was provided to part of the consumption rendered through an account pursuant to a service rider or tariff provision, the rebate percentages specified in Attachment C of Appendix A to these rules shall apply to the extent that each applicable service classification and/or rate and/or service rider applies to such user. To the extent that such user is served under “PSC No. 9 – Gas Rate Schedule,” its rebate percentages shall be determined as if such user were served under the corresponding full-service rate and service classification and rate.

   (3) A)  Except as otherwise provided in subparagraph (B) of this paragraph (3), the rebate percentage to be applied to eligible charges for natural gas-related energy services provided by Keyspan pursuant to its “PSC No. 12 – Gas Rate Schedule” shall equal the percentages specified in Attachment D of Appendix A to these rules, which shall vary depending on the user’s average monthly consumption, the applicable service classification and the applicable rate, and whether the user receives discounts on energy services rates pursuant to a service rider or other tariff provisions. If, for any affected user, eligible charges for natural gas-related energy services were rendered at more than one service classification and/or at more than one rate for a service classification or if discounted service was provided to part of the consumption rendered through an account pursuant to a service rider or tariff provision, the rebate percentages specified in Attachment D of Appendix A to these rules shall apply to the extent that each applicable service classification and/or rate and/or service rider or other tariff discount applies to such user.

  1. The special rebate levels applicable, pursuant to this paragraph (3), to eligible charges for energy services procured by an eligible energy user from KeySpan pursuant to service classification 4A (High Load Factor service) of its “PSC No. 12 – Natural Gas Rate Schedule” shall be increased during the period beginning on or after April 30, 2003 and ending no later than October 31, 2004, by the amounts set forth in Schedule D-1 of Appendix A of these rules, depending on the user’s average monthly consumption, for all eligible energy users that applied for ECSP benefits prior to November 1, 2000 and were certified before February 1, 2001. The special rebate levels applicable, pursuant to this paragraph (3), to eligible charges for energy services procured by an eligible energy user from KeySpan pursuant to service classification 4A (High Load Factor service) of its “PSC No. 12 – Natural Gas Rate Schedule” shall be increased during the period beginning on April 30, 2003 and ending no later than October 31, 2004, by the amount equal to half the amount set forth in such Schedule D-1, depending on the user’s average monthly consumption, for all eligible energy users that applied for ECSP benefits prior to November 1, 2000 and were certified during the period beginning on or after January 31, 2001 and ending on or before September 30, 2002.

   (4) The rebate percentage to be applied to eligible public utility service charges for electrical-related energy services provided by NYCPUS pursuant to its “Service Tariff No. 4 Rate Schedule” shall equal the percentages specified in Attachment B of Appendix A to these rules, which shall vary depending on the user’s average monthly load factor, the applicable service classification and the applicable rate, and whether the user receives discounts on service pursuant to a service rider. If, for any affected user, eligible public utility service charges for electrical-related energy services were rendered at more than one service classification and/or at more than one rate for a service classification, the rebate percentages specified in Attachment B of Appendix A to these rules shall apply to the extent that each applicable service classification and/or rate and/or service rider applies to the user.

   (5) The rebate percentage to be applied to eligible charges for natural gas-related energy services provided by a local distribution utility pursuant to an individually-negotiated natural gas sales contract entered into prior to November 1, 2001 and having a transportation price of less than $1.50 per dekatherm, shall be 100%.

   (6) The rebate percentage to be applied to eligible charges for energy services provided by LIPA to an eligible energy user or eligible owner that applied for ECSP benefits before November 11, 2000 shall be 49% to the extent services are received through the Power for Jobs program and 57% to the extent energy services are provided by LIPA under its other commercial rates.

  1. For all billing cycles after the ninety-sixth month of each of the above-noted user’s benefit period and thereafter during the period beginning with the first billing cycle following June 1, 2001, the applicable rebate percentages on eligible charges, determined as specified in 66 RCNY § 5-18(b), shall be multiplied by an adjustment factor, depending on the month of the benefit period in which the energy services were rendered; provided that the applicable rebate percentages shall not, for any affected electric or natural gas account, exceed 100% of the eligible charges charged in any billing cycle. The adjustment factors are as follows:
Month of Benefit Period Adjustment Factor
97 through 108 0.8
109 through 120 0.6
121 through 132 0.4
133 through 144 0.2
145 and thereafter 0.0

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§ 5-19 Benefit Period.

(a)  Except as set forth in (b) of this 66 RCNY § 5-19, all recipients shall be eligible to receive a special rebate for a period not to exceed one hundred and forty-four (144) consecutive months commencing at the beginning of the month immediately following the effective date of their certificate of eligibility.
  1. A recipient that occupies premises within specially eligible premises after the effective date on which an initial certificate of eligibility of the first eligible energy user occupying such premises is eligible to receive a special rebate for the remaining portion of the benefit period prescribed in such certificate of eligibility for such premises.

Subchapter C: Method of Granting Special Rebates, Utility Credits And/or Discounts

§ 5-21 Granting of Special Rebates to Eligible Energy Users, Eligible Owners, Qualified Eligible Energy Users and On-Site Cogenerators.

(a) (1) A utility and NYCPUS shall reduce their monthly bills for energy services to eligible energy users, eligible owners, qualified eligible energy users and on-site cogenerators that are eligible to receive a special rebate pursuant to 66 RCNY § 5-14 during their respective benefit periods by the applicable special rebate calculated in accordance with such 66 RCNY § 5-14.

   (2) A utility and NYCPUS shall commence reducing each such monthly bill in accordance with this subdivision (a) of this 66 RCNY § 5-21 within thirty (30) days of receipt of the executed certificate of eligibility, or upon the effective date of the certificate of eligibility, whichever is later. The special rebate provided by a utility or public utility service shall be separately stated and shown on each such bill.

  1. 1)  A vendor that elects to provide an eligible energy user, eligible owner or qualified eligible energy user with special rebates pursuant to 66 RCNY § 5-14 shall provide such user or owner with a monthly bill for submetered energy services reduced during its benefit period by the applicable special rebate calculated in accordance with such 66 RCNY § 5-14.

   (2) Such vendor shall commence reducing each such monthly submetered bill for energy services upon the effective date of the certificate of eligibility by the full amount of the special rebate that is calculated in accordance with the applicable provisions of 66 RCNY § 5-14. The special rebate shall be provided to such eligible energy user, eligible owner or qualified eligible energy user by the vendor on a monthly basis during the benefit period and such amount shall be separately stated and shown on each bill.

   (3) Such eligible energy user, eligible owner or qualified eligible energy user, upon receipt of its reduced bill from the vendor, must remit payment in accordance with the written agreement between such user or owner and such vendor together with an executed remittance form, in accordance with 66 RCNY § 5-22, setting forth the dollar amount of the special rebate such user or owner has received from its vendor for the applicable monthly billing cycle.

   (4) The vendor shall execute and forward the remittance form to the utility or NYCPUS, whichever entity supplied such vendor with energy services, together with payment for the balance of the bill for such energy services in order to receive a discount from the utility or NYCPUS. The amount on such remittance form shall be credited on its bill for the monthly billing cycle during which the special rebate was made to the eligible energy user, eligible owner or qualified eligible energy user, or for such subsequent monthly billing cycle where payment by the vendor to the utility or NYCPUS was not timely made.

§ 5-22 Remittance Form.

(a)  Where special rebates are provided by a vendor of energy services, a remittance form, which shall be a form approved by the commissioner, shall be signed by the recipient and the vendor, submitted to the utility or NYCPUS, and the commissioner, and shall include, but not be limited to, the following information:

   (1) the name of the recipient who receives submetered energy services;

   (2) the vendor’s utility or NYCPUS customer account name;

   (3) the vendor’s utility or NYCPUS customer account number;

   (4) the amount of the special rebate granted by the vendor to a recipient for the billing period covered by the remittance form;

   (5) the amount of the recipient’s eligible charges for the applicable billing period;

   (6) the billing period for which the recipient has received a special rebate from a vendor;

   (7) the recipient’s certificate of eligibility number and effective date;

   (8) the schedule of special rebates the recipient may receive for the benefit period pursuant to Subchapter B of these rules;

   (9) the amount of any additional fee charged by the vendor pursuant to 66 RCNY § 5-11(f)(ii);

   (10) such other information as may be requested by the commissioner.

  1. Remittance forms submitted in accordance with subdivision (a) of this section must be submitted to the commissioner within ninety (90) days of the closing meter reading date for which special rebates are sought. The commissioner may decline to approve a discount to a vendor of energy services based on submissions received after the expiration of such period.

§ 5-22.1 Cogenerator Credit Form.

(a) A cogenerator credit form shall consist of a form approved by the commissioner.
  1. A category I or clean on-site cogenerator shall submit a cogenerator credit form to the commissioner and to the utility within ninety (90) days of the end of the billing period for which special rebates are sought.

§ 5-23 Granting of Discount to Vendors.

(a)  Vendors that have granted special rebates to eligible energy user or eligible owners in accordance with 66 RCNY § 5-14 of these rules, shall submit executed remittance forms to the utility or NYCPUS, as applicable. Each remittance form shall be limited to a single monthly billing cycle.
  1. A utility or NYCPUS shall grant a discount to a vendor equal to the monthly aggregate amount of all remittance forms reflecting special rebates granted by a vendor to eligible energy user, eligible owners or qualified eligible energy users in accordance with 66 RCNY § 5-15, provided, however, that the discount granted by the utility or NYCPUS shall not exceed the bill(s) for the energy services supplied to such vendor by such utility or NYCPUS, respectively. At no time shall a utility or NYCPUS be required to carry forward on its books and records any discounts not fully made to a vendor to reduce bills for subsequent billing cycles.

§ 5-24 Granting of Discounts to NYCPUS.

(a) A utility shall provide NYCPUS with a discount against its monthly bill upon proper and timely submission of executed remittance forms to the utility. Each remittance form shall be limited to a single monthly billing cycle.
  1. The utility shall grant a discount to NYCPUS equal to the monthly aggregate amount of all remittance forms reflecting special rebates granted by NYCPUS to eligible energy users, eligible owners or qualified eligible energy users in accordance with 66 RCNY § 5-15 and discounts granted to vendors that, in turn, granted special rebates to eligible energy users, eligible owners or qualified eligible energy users in accordance with 66 RCNY § 5-14, provided, however, that the discount granted by the utility shall not be in an amount that exceeds the bill(s) for energy services supplied to NYCPUS by such utility. At no time shall a utility be required to carry forward on its books and records any discounts not fully made to NYCPUS to reduce bills for subsequent billing cycles.

§ 5-25 Granting of Utility Credit to Utilities; Audit.

(a)  Utilities that have granted special rebates to eligible energy users, eligible owners or on-site cogenerators in accordance with 66 RCNY § 5-14 or discounts to vendors or NYCPUS in accordance with 66 RCNY § 5-15 shall be entitled to a utility credit equal to the aggregate amount of all such special rebates and discounts it has provided to eligible energy users, eligible owners, qualified eligible energy users, on-site cogenerators, vendors and/or NYCPUS, whichever is applicable.
  1. Such utility credit may be taken only as provided for in the code, these rules and the rules promulgated by the commissioner of DOF, for the purpose of permitting utilities a deduction against certain taxes.
  2. The utility credit to which utility is entitled under ECSP will be provided by DOF in accordance with rules promulgated by the commissioner of DOF.
  3. DOF may audit, among other things, the utility credit taken by a utility to offset the special rebates and discounts such utility granted under ECSP to recipients, vendors and NYCPUS.

Subchapter D: Applications

§ 5-31 Forms and Filing of Application.

(a)  All application forms may be obtained from DBS and, upon completion, shall be submitted to DBS. Only completed applications shall be considered by DBS in determining the applicant's eligibility, or ineligibility, under the Act and these rules.
  1. A check for the non-refundable application filing fee specified in 66 RCNY § 5-34 shall be submitted by the applicant to the commissioner together with an executed original copy of the application.

§ 5-32 Submission of an Application.

(a)  An applicant that applies after the effective date of these rules must comply with the following application procedures to be considered for eligibility under ECSP:

   (1) An applicant that is relocating to premises that may qualify as replacement premises must file an application prior to taking occupancy of such premises or the signing of a lease or contract of sale for such premises, whichever is earlier (except in the case of a contract of sale entered into subject to the approval of public or private financing).

   (2) An applicant that owns and occupies, manages or operates real property or a building that may qualify as specially eligible premises must file an application within the following time constraints, whichever is applicable:

      (i) prior to the approval of an inducement resolution by IDA to finance in whole or in part an applicant’s IDA project; or

      (ii) prior to the signing of a lease approved by UDC or by the City in accordance with the applicable Charter provisions for premises contained on or within real property owned by the City or UDC; or

      (iii) after the filing of a preliminary application or final application with DOF for construction or renovation in connection with an ICIP project eligible to obtain ICIP benefits from DOF.

   (3) An applicant that is occupying premises within a building that it does not own, operate or manage and which building is the subject of an application for an initial certificate of eligibility as specially eligible premises must file an application within one hundred twenty (120) days of the effective date of the initial certificate of eligibility for such building to obtain a certificate of eligibility for such premises.

   (4) An applicant that takes occupancy of premises within a building that has previously qualified as specially eligible premises must file an application within one hundred twenty (120) days of taking occupancy of such premises, or of the signing of a lease or contract of sale for such premises, whichever is earlier.

   (5) No applicant shall be certified as eligible more than 5 years after the initial submission by such applicant pursuant to paragraphs (1) or (2) of subdivision (a) of this section, except where the approval of the application has been delayed by the actions or inactions of the City of New York and/or the applicant demonstrates to the commissioner that it has made substantial progress toward obtaining certification. An applicant that cannot make such demonstration will be given the opportunity to renew its application by updating its application with current information and by paying a new application fee according to the fee schedule currently in effect.

§ 5-33 Contents of Application.

(a)  The applicant shall have the affirmative burden of proving its eligibility to the satisfaction of the commissioner as to each and every fact contained in the application. The applicant shall provide DSBS with all information required in the application and deemed necessary or useful for the administration of ECSP, including but not limited to, the following:

   (1) applicant’s name; telephone number; address at its current and previously occupied premises, where applicable; employer identification number; name of utility and utility customer number at the eligible premises, if available, and for the previously occupied premises, where applicable; number of present employees to be relocated or located at the eligible premises; length of time at the previously occupied premises, where applicable; names and addresses of any parent, subsidiaries, or affiliated companies; and the name and title of an individual authorized to complete the application on behalf of the applicant; and

   (2) a lease, contract of sale or deed for the eligible premises, whichever is applicable; copies of utility bills for the previously occupied premises and the eligible premises, where applicable; federal and state tax returns, as may be requested by the commissioner to verify among other things, occupancy at the eligible premises and the previously occupied premises, where applicable;

   (3) any other information, documentary or otherwise, including, but not limited to, sworn statements and other data, that the commissioner deems relevant to evaluate the applicant’s application; and

   (4) a sworn statement agreeing to return all special rebates in excess of $10,000 per employee received during any calendar year, with interest calculated at the prime rate as specified in The New York Times published on the last day of that calendar year, compounded monthly.

  1. In addition to the requirements of subdivision (a) of this 66 RCNY § 5-33, an applicant that purchases energy services from a vendor shall submit as part of its application in form and substance satisfactory to the commissioner, the following:

   (1) a written contract or lease agreement between the applicant and the vendor setting forth an agreement by such vendor to provide individual and accurate submetering of the applicant’s premises, and stating as conditions for the sale of energy services from such vendor to the applicant that:

      (i) the applicant will be separately billed for its usage of energy services; and

      (ii) the price charged by such vendor for such energy services, electricity and/or natural gas, shall not exceed the limits set forth in 66 RCNY § 5-11(f)(ii); and

   (2) a written confirmation by such applicant’s vendor to the commissioner stating the vendor’s agreement to participate in ECSP by providing a special rebate to the applicant and by complying with the terms of the agreement referred to in paragraph (b)(1) of this 66 RCNY § 5-33. Pursuant to such written confirmation, the vendor shall agree to provide separate monthly bills to the applicant itemizing all charges for energy services consumed and separately state the applicable ECSP benefit.

  1. In addition to the requirements of subdivision (a) and (b) of this section, an applicant seeking to be certified as a clean on-sight cogenerator shall provide evidence, acceptable to the commissioner, that the electricity generating facility seeking certification has an emission rate for nitrous oxides required of clean on-site cogenerators.

§ 5-34 Application Filing Fee.

(a)  For commercial buildings seeking designation as a specially eligible premises and commercial firms qualifying for ECSP by virtue of a relocation, the application fee shall be determined as set forth below:
Gross Square Footage of Applicant’s Premises Fee
Less than 10,000 square feet $500
10,001 to 25,000 square feet $1,000
25,001 to 50,000 square feet $1,250
50,001 to 100,000 square feet $1,500
100,001 to 250,000 square feet $2,500
Over 250,000 square feet $5,000

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In the case of an eligible owner (for example, a landlord) applying for ECSP benefits for a building, gross square footage for purposes of the filing fee is limited to square footage that is not or will not be occupied by tenants (i.e., common areas, equipment rooms etc.).
  1. In addition to the filing fee, an applicant shall pay for all costs incurred as a result of any survey conducted by or at the request of the commissioner to develop or verify any factual matters relating to the application.
  2. All fees shall be made payable by check or money order to the “New York City Department of Small Business Services”.

§ 5-35 Representations and Warranties.

(a)  As part of the application and reports required by the Act or these rules, the applicant shall certify and make such representations and warranties as may, from time to time, be deemed necessary to ensure compliance with the provisions of all applicable laws and these rules, including, but not limited to, the following:

   (1) that all statements made by or on behalf of the applicant in connection with the application are made by a person authorized by the applicant to make such statements and having actual knowledge or documentary information sufficient to make informed and accurate statements, and that such person believes all such statements to be true;

   (2) that the applicant and its employees and agents will comply with and be in compliance with all provisions of federal, state and local laws, all local rules and executive orders, and these rules;

   (3) that the applicant is applying for a special rebate only to the extent described in the application and permitted by the Act and these rules;

   (4) That the applicant represents, acknowledges, covenants and agrees that it bears sole responsibility for paying the full amount of energy services costs to the appropriate utility, vendor or NYCPUS until such time as the special rebate (if any) granted to the applicant under ECSP is reflected on the applicant’s bill;

   (5) that the applicant agrees to permit or cause permission to be granted to the City and its agents to inspect its premises and, in the case of an applicant relocating to replacement premises, the premises from which such applicant is relocating, upon notice during regular business hours; and

   (6) any other representations or warranties as may be required in the application or requested by the commissioner.

  1. In addition to the requirements of subdivision (a) of this 66 RCNY § 5-35, the applicant shall covenant and agree to repay with interest at the prime rate, as reported in The New York Times (or similar periodical selected by the commissioner), on the effective date of its certificate of eligibility accrued from the date of receipt, the full amount of any special rebate that the applicant has received if subsequently it is determined by the commissioner that the applicant was ineligible to receive a special rebate for any reason.

§ 5-36 Commissioner’s Review; Certification of Eligibility Procedure.

(a)  The commissioner shall review the application and grant or deny an applicant's application for a certificate of eligibility.
  1. The commissioner shall consider the application submitted with supporting documentation, and any surveys conducted, and any other information pertaining to the application.
  2. The commissioner shall execute and provide a certificate of eligibility to eligible applicants in accordance with Subchapter E of these rules.

Subchapter E: Notification of Eligibility, Commencement of Eligibility and Opportunities To Be Heard

§ 5-41 Notification to Applicant.

If the commissioner grants an applicant’s application for a certificate of eligibility, his or her staff shall forward an executed certificate of eligibility to the applicant. If the commissioner denies an applicant’s application for a certificate of eligibility, the commissioner shall promptly notify the applicant in writing, of the reason for such denial.

§ 5-42 Certificate of Eligibility.

(a)  The commissioner's staff will coordinate with the recipient, the utility, the vendor, NYCPUS and DOF, where applicable, to establish the effective date of the certificate of eligibility, which shall in no event be on or after July 1, 2005.
  1. The certificate of eligibility shall include the following information:

   (1) the benefit period the recipient is qualified for;

   (2) the special rebate a recipient is qualified for;

   (3) its date of issuance;

   (4) its effective date; and

   (5) its termination date.

  1. An applicant must execute the certificate of eligibility and return it to the commissioner within six (6) months of the issuance date stated on the certificate of eligibility or before July 1, 2005, whichever is earlier. Failure of the applicant to comply with this subsection may result in a revocation of the certificate of eligibility.
  2. Subsequent to establishing the effective date of the certificate of eligibility, the commissioner’s staff shall affix such date to the applicant’s certificate of eligibility and forward a copy of the fully completed and executed certificate of eligibility to the applicant and any other necessary party.
  3. The effective date of a certificate of eligibility issued by the commissioner after June 30, 2003, and before July 1, 2005, to an on-site cogenerator serving an eligible energy user that was certified before July 1, 2003 shall be the effective date of the first certificate of eligibility issued to such eligible energy user.
  4. The commissioner is authorized to certify an applicant as an on-site cogenerator as of a date prior to July 1, 2003, regardless of the date of such applicant’s application for certification, provided the applicant demonstrates to the satisfaction of the commissioner that the applicant had fulfilled all eligibility and filing requirements prior to July 1, 2003, and was not certified prior to such date due to the actions or inaction of the City.

§ 5-43 Notification to Utilities, Vendors and/or NYCPUS.

(a)  DBS shall notify the utility, the vendor, and/or NYCPUS, whichever is appropriate, of an applicant's eligibility to receive a special rebate by forwarding to them a certified copy of an applicant's certificate of eligibility executed in accordance with 66 RCNY § 5-52.
  1. DBS shall notify, in writing, the utility, the vendor and/or NYCPUS, whichever is appropriate, of any changes in an applicant’s certificate of eligibility.

§ 5-44 Reporting and Inspection Requirements.

(a)  During the term of the benefit period, a recipient shall promptly notify the commissioner of any material changes that may affect a recipient's eligibility under ECSP, including but not limited to changes in: (1) the use or type of operations conducted at the eligible premises; (2) recipient's energy usage; (3) the type of metering or method of billing for energy usage at the eligible premises; (4) the occupancy and/or ownership of the eligible premises including, without limitation, the entering into of any leases or subleases at such eligible premises; (5) the number of employees performing work for the recipient and its affiliates or other persons at the premises during each month of the preceding twelve month period.
  1. During the term of the benefit period, a recipient shall annually submit to the commissioner a reporting form, within thirty (30) days of the end of each calendar year, to document the current status of the recipient’s continued eligibility under ECSP. Failure of a recipient to submit the annual reporting form may result in the commissioner’s discontinuance of the recipient’s special rebate.
  2. The commissioner may require a recipient to submit such supporting documentation, including payroll, unemployment insurance filings and the like, as may be needed to verify the accuracy of the submissions of recipients in accordance with subdivision (a) of this section and carry out the purpose and functions of ECSP.
  3. Information received by the commissioner pursuant to this section or otherwise may be used by him or her to determine that a recipient does not satisfy the applicable eligibility criteria in the act or these rules. The commissioner may, among other things, suspend a recipient’s certificate of eligibility until a final determination of eligibility can be made, or revise, terminate or revoke such recipient’s certificate of eligibility, on the basis of such information or failure to submit requested information.
  4. During the term of the benefit period, a clean on-site cogenerator shall annually submit to the commissioner a report of its nitrous oxide emissions, thermal output used productively, and electric output used by eligible energy users, on a form approved by the commissioner, within thirty (30) days of the end of each calendar year, to document such cogenerator’s continued eligibility under ECSP as a clean on-site cogenerators. Failure of an on-site cogenerator to submit such annual emissions reporting form may result in the discontinuance or reduction by the commissioner of the recipient’s special rebate. In addition, users shall repay any special rebates received in excess of $10,000 per employee in any calendar year, within ninety (90) days of receiving a written request from the commissioner.
  5. The commissioner and his or her designated agents shall have the right to inspect any premises and operations for which an applicant claims special rebates to verify compliance with the statutes and rules governing the Energy Cost Savings Program, including emissions and space heating restrictions.

§ 5-45 Requests for an Opportunity to be Heard.

Within thirty (30) days after the mailing of a written determination by the commissioner or his or her designee pursuant to the Act or these rules, an applicant or recipient that wants to contest such determination may submit documentation supporting its position to the commissioner or his or her designee and may request an opportunity to be heard.

§ 5-46 Opportunity to be Heard.

If an opportunity to be heard is requested in accordance with 66 RCNY § 5-45, the commissioner or his or her designee shall, within a reasonable period of time, review the application, all supporting documentation relating to the application and the documentation submitted by the applicant or recipient relating to the determination and schedule a date for a meeting with such applicant or recipient. At such meeting the applicant or recipient may present its arguments and discuss its supporting documentation with the commissioner or his or her representative.

§ 5-47 Final Determination; Notification.

(a)  After review of the documentation and arguments submitted by the applicant or recipient the commissioner or his or her designee shall make a final agency deter- mination.
  1. The commissioner or his or her designee shall notify the applicant or recipient in writing within a reasonable period of time of his or her final determination on the issue or issues presented by such applicant or recipient pursuant to 66 RCNY § 5-46.
  2. The commissioner or his or her designee shall notify the applicant or recipient, the appropriate utility, NYCPUS, the vendor and DOF, whichever is applicable, of a final determination to issue, deny, revise, suspend or revoke a certificate of eligibility.

APPENDIX A: RATE SCHEDULES

ATTACHMENT A: CON EDISON ELECTRIC SERVICE PSC No. 2 Retail Access Rate Schedule and PSC No. 9 Electric Rate Schedule

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ATTACHMENT B: NEW YORK CITY PUBLIC UTILITY SERVICE ELECTRIC SERVICEService Tariff No. 4

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ATTACHMENT C: CON EDISON NATURAL GAS SERCICEPSC No. 9 Gas Rate Schedule

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ATTACHMENT D: KEYSPAN NATURAL GAS SERVICEPSC No. 12 Gas Rate Schedule

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ATTACHMENT D-1: KEYSPAN NATURAL GAS SERVICEPSC No. 12 Gas Rate ScheduleTemporary Additional Benefit for Keyspan SC4A(High Load Factor) Charges

Average Monthly Consumption  
100 therms or less 0%
101 to 500 9%
501 to 1,000 25%
1,001 to 2,250 38%
2,251 to 5,000 42%
5,001 to 10,000 40%
10,001 to 20,000 39%
20,001 to 50,000 39%
50,001 to 100,000 39%
100,0001 to 1,000,000 39%
Greater than 1,000,000 39%

~

ATTACHMENT E [Repealed]

ATTACHMENT F [Repealed]

ATTACHMENT H [Repealed]

ATTACHMENT I [Repealed]

ATTACHMENT J [Repealed]

Chapter 5-A: New York City Lower Manhattan Energy Program

Subchapter A: General Provisions

§ 5-51 Authority; Purpose.

(a) These rules are promulgated pursuant to Chapter 4 of the Laws of 1995 of the State of New York, as amended, to effectuate the purposes of the New York City Lower Manhattan Energy Program (the "Program").
  1. The purpose of the Program is to encourage commercial development, through construction, expansion or improvement of commercial space in a defined area of Lower Manhattan, by providing a reduction of certain electricity costs related to the transmission and distribution of electricity for a period of twelve (12) years or, in specified cases involving landmark sites, thirteen (13) years, including reductions in the cost of energy services purchased from the New York City Public Utility Service.
  2. These rules set forth the standards and criteria used to determine eligibility and the available reductions in energy costs, as well as requirements for applications and procedures for review of determinations made in connection with the Program.

§ 5-52 Definitions.

As used in these rules, the following terms shall have the respective meanings set forth below:

Act. “Act” means Article 2-I of the General City Law of the State of New York, as added by Chapter 4 of the Laws of 1995 of the State of New York, as amended by Chapter 154 of the Laws of 1999 and Chapters 103 and 472 of the Laws of 2000.

Applicant. “Applicant” means any person applying individually or jointly as an owner or lessee of a building, or a portion thereof, or an agent of such owner or lessee, for a certificate of eligibility as an eligible redistributor of energy or a qualified eligible redistributor of energy, or a holding company, parent corporation, or subsidiary or affiliated corporation so applying on behalf of any of the foregoing.

Application. “Application” means the application for a certificate of eligibility and shall include the preapplication and all supporting exhibits submitted and statements made by an applicant to the commissioner for the purpose of determining such applicant’s initial eligibility for benefits as an eligible redistributor of energy or as a qualified eligible redistributor of energy under LMEP, and shall include the information required by 66 RCNY § 5-82.

Assessed value. “Assessed value” means the assessed value of the real property and buildings thereon for tax purposes during the tax year in which improvements to such real property and buildings thereon commenced, as required by and referred to in these rules.

Average monthly load factor. “Average monthly load factor” means, for each electric account, the average monthly load factor for the preceding 12-month period, determined once annually using the most recently available twelve months of load factor data.

Benefit period. “Benefit period” means the number of months a recipient is eligible to receive a special rebate, which period shall not exceed one hundred and forty-four (144) consecutive months, beginning on the effective date of the recipient’s certificate of eligibility, unless such building is a landmark site, in which case the benefit period shall not exceed one hundred and fifty-six (156) consecutive months, beginning on the effective date of the recipient’s certificate of eligibility.

Building. “Building” means articles, structures, substructures and superstructures erected upon, under, or above real property, or affixed thereto, and fixtures (other than trade fixtures) and other improvements erected or situated thereon.

Building permit. “Building permit” means a permit approving proposed construction work issued by the New York City Department of Buildings, DBS or other agency of the City authorized by law to receive and approve plans for construction work. A building permit shall include a permit to construct a new building, an alteration, foundation, plumbing, sign or equipment work permit and may, at the option of the applicant, include a permit for partial demolition or earthwork.

Certificate of eligibility. “Certificate of eligibility” means the document or documents issued by the commissioner evidencing the eligibility of an applicant to receive a special rebate as an eligible redistributor of energy or a qualified eligible redistributor of energy. The certificate of eligibility shall include such information as is required pursuant to 66 RCNY § 5-87.

Charter. “Charter” means the New York City Charter of New York, as amended.

City. “City” means The City of New York.

Code. “Code” means the Administrative Code of the City of New York, as amended.

Commissioner. “Commissioner” means the Commissioner of DBS or his or her designee or his or her successor in function.

Common areas, systems and facilities. “Common areas, systems and facilities” mean those areas, systems and facilities of a building that are shared by tenants and building owners, including, but not limited to: heating; ventilation and cooling systems; public, light and power; facilities, machinery and support hardware of a building, including, but not limited to, shafts, enclosing walls, corridors and lobbies, and loading docks of a building.

Contiguous square footage. “Contiguous square footage” means gross square footage that is in actual contact or touching along a boundary or at a point, and shall include space on two (2) or more floors that are directly above or below each other.

DBS. “DBS” means the New York City Department of Business Services or its successor in function.

DOF. “DOF” means the New York City Department of Finance or its successor in function.

Directly metered eligible revitalization area energy user. “Directly metered eligible revitalization area energy user” means an eligible revitalization area energy user that is directly metered by a utility.

Effective date. “Effective date” means the effective date of a certificate of eligibility, which date is the first day of the first billing cycle after a certificate of eligibility is issued.

Eligible building. “Eligible building” means a building or structure that meets the criteria set forth in § 25-aa(a) of the Act and 66 RCNY § 5-61.

Eligible charges. “Eligible charges” mean charges for energy services, system benefits charges and competitive transition charges, including service discounts, by a utility determined in accordance with § 25-aa(b) of the Act and the applicable provisions of 66 RCNY § 5-64, to which charges the applicable percentages in 66 RCNY § 5-65 or 66 RCNY § 5-67 are applied to determine the amount of a special rebate.

Eligible public utility service charges. “Eligible public utility service charges” mean charges for energy services purchased from NYCPUS, determined in accordance with § 25-aa(b) of the Act and the applicable provisions of 66 RCNY § 5-64.

Eligible redistributor of energy. “Eligible redistributor of energy” means a person that meets the criteria set forth in § 25-aa(c) of the Act and 66 RCNY § 5-62.

Eligible revitalization area. “Eligible revitalization area” means the area of the City defined in § 25-aa(d) of the Act, namely the area of the City in the borough of Manhattan bounded by Murray Street on the north starting at the intersection of West Street and Murray Street; running easterly along the center line of Murray Street; connecting through City Hall Park with the center line of Frankfort Street and running easterly along the center lines of Frankfort and Dover Streets to the intersection of Dover Street and South Street; running southerly along the center line of South Street to Peter Minuit Plaza; connecting through Peter Minuit Plaza to the center line of State Street and running northwesterly along the center line of State Street to the intersection of State Street and Battery Place; running westerly along the center line of Battery Place to the intersection of Battery Place and West Street; and running northerly along the center line of West Street to the intersection of West Street and Murray Street. Any tax lot which is partly located inside the eligible revitalization area shall be deemed to be entirely located inside such area.

Eligible revitalization area energy user. “Eligible revitalization area energy user” means any person that meets the criteria set forth in § 25-aa(e) of the Act and 66 RCNY § 5-63.

Energy services. “Energy services” mean (i) the transportation of electric commodity within the franchised service territory of a utility through such utility’s local transmission or distribution assets, (ii) metering of a user’s consumption, including meter reading, and (iii) billing services related to the preparation and collection of the user’s utility bill. Energy services shall not include the provision of electric commodity, transmission-related functions for which charges are rendered by the New York Independent System Operator, nor shall they include transportation of electric commodity to a utility system.

Energy services bill. “Energy services bill” means a statement of charges for energy services rendered by a utility, NYCPUS, an eligible redistributor of energy or qualified eligible redistributor of energy and shall include a bill for rent or similar charges for the occupancy of premises where such rent or similar charges include the use of energy services.

FERC. “FERC” shall mean the Federal Energy Regulatory Commission.

Floor area. “Floor area” means either the gross area or the rental area of the eligible building. The gross area means all of the area within the exterior walls of the building. The rentable area means the square footage leased to a particular tenant for its exclusive use as reflected in the lease agreement. An applicant may select either of these meanings, but must be consistent in the application of the meaning.

Hospital. “Hospital” means a hospital as defined in § 2801 of the Public Health Law of the State of New York.

Hotel. “Hotel” means a building or portion thereof, that is regularly used and kept open as such for the lodging of guests, including, but not limited to, an apartment hotel, a motel, a boarding house or club or any other facility whose principal use is residential accommodation, whether or not meals are served.

ICIP. “ICIP” means the New York City Industrial and Commercial Incentive Program as set forth in Title 11, Chapter 247, Part 3 of the Code, as amended.

IDA. “IDA” means the New York City Industrial Development Agency established pursuant to § 850 of the General Municipal Law of the State of New York, as amended.

Landmark site. “Landmark site” means a building or any part thereof that has been designated as a landmark pursuant to the provisions set forth in Chapter 3 of Title 25 of the code.

LMEP or Program. “LMEP” or “Program” means the New York City Lower Manhattan Energy Program described in the Act and Subchapter A of these rules.

Manufacturing activity. “Manufacturing activity” means an activity involving the assembly of goods to create a different article or the processing, fabrication, or packaging of goods.

Mixed-use property. “Mixed-use property” means mixed-use property as defined in Title 2-E of Article 4 of the Real Property Tax Law of the State of New York.

Monthly load factor. “Monthly load factor” means, for each electric account, the number determined by dividing (a) the account’s energy consumption, measured in kilowatt hours, for a monthly billing period, by (b) the peak electric demand, measured in kilowatts, for such monthly billing period multiplied by the number of billing days in the period multiplied by 24 hours.

NYCPUS. “NYCPUS” means the New York City Public Utility Service established by Local Law No. 78 of 1982, codified in Title 22, Chapter 3 of the code.

Person. “Person” means any individual, partnership, association, corporation, limited liability company, estate or trust, and any combination of the foregoing.

Preapplication. “Preapplication” means the initial filing in the process of applying for a certificate of eligibility and shall contain the information required by 66 RCNY § 5-82(a).

Public Service Commission or PSC. “Public Service Commission” or “PSC” means the Public Service Commission of the State of New York, created by and defined in § 2 of the Public Service Law of the State of New York.

Qualified eligible redistributor of energy. “Qualified eligible redistributor of energy” shall have the meaning ascribed to such term in § 25-aa(m) of the Act.

Real property. “Real property” means land and articles, structures, substructures and superstructures erected upon, under or above the land or affixed thereto and articles of equipment, as described by, and subject to assessment for taxation pursuant to subdivision (a), (b), (f) or (i) of § 102(12) of the Real Property Tax Law of the State of New York, but not including any incorporeal right, franchise or special franchise.

Recipient. “Recipient” means an applicant that has satisfied the eligibility criteria of Subchapter B of these rules and has been certified by the commissioner as either an eligible redistributor of energy or a qualified eligible redistributor of energy.

Retail space. “Retail space” means space used by an applicant that: (a) is predominantly engaged in the sale of tangible personal property to any person, for any purpose unrelated to the trade or business of such person; or (b) is predominantly engaged in selling services to persons for any purpose unrelated to the trade or business of such persons; provided however, where such sale of tangible personal property or services described herein is performed by only one (1) or more operating units, divisions or subdivisions of the applicant, or at only one (1) or more locations, only such operating units, divisions, or subdivisions, or such locations, shall come within the definition contained herein, and provided, further, that retail space shall not include space occupied by bankers, insurance brokers, real estate brokers, stock brokers, doctors, lawyers or accountants.

Service classification. “Service classification” means the classification used by a utility in its rate schedule that sets forth the particular rates charged for energy services that are applicable to particular kinds of customers.

Site visit. “Site visit” means an on-site inspection performed by or at the direction of DBS to determine the use of energy services, size, or occupancy of certain buildings, real property or any portion of such building or real property.

Special rebate. “Special rebate” shall mean the amount of reduction in an energy services bill rendered by a utility or NYCPUS for energy services to an eligible redistributor of energy or a qualified eligible redistributor of energy or directly metered eligible revitalization energy user, or an agent of any of these, and shall be calculated as a percentage of eligible charges in accordance with the provisions of 66 RCNY § 5-65 or 66 RCNY § 5-67.

Submeter. “Submeter” means a meter that individually and accurately meters an occupant’s usage of energy services.

Survey. “Survey” means a study or report based on on-site field inspections, professional surveys by a licensed professional engineer, data collection or meter readings or other actions related to determining the size, use, energy services consumption, or occupancy of certain buildings or real property, or portions thereof.

Systems benefit charge. “Systems benefit charge” means a charge that is regulated by the PSC and that a utility is required to collect from its customers for the purposes of funding public benefit programs.

Targeted eligible building. “Targeted eligible building” means a building or structure which meets the criteria set forth § 25-aa(q) of the Act.

UDC. “UDC” means the New York State Urban Development Corporation or any subsidiary or any successor in function thereof created and defined by § 6254 of the Unconsolidated Laws of the State of New York.

Utility. “Utility” shall mean any provider of energy services within the eligible revitalization area that is subject both to the jurisdiction and general supervision of the PSC and to a tax imposed pursuant to Chapter 11 of Title 11 of the code.

Utility credit. “Utility credit” means a credit to which a utility is entitled, in accordance with the rules promulgated by DOF, against the tax imposed under Chapter 11 of Title 11 of the code, and equal to the aggregate amount of all special rebates granted by such utility in accordance with the requirements of the Act and these rules.

§ 5-53 Law Governing Applications.

Applications pending as of the effective date of these rules and applications filed subsequently shall be governed by these rules. Persons that have been certified as eligible for special rebates under provisions of law in effect before November 1, 2000, are not required to reapply in order to receive benefits under provision of Chapter 472 of the Laws of 2000.

§ 5-54 Rules of Construction.

(a)  These rules shall be interpreted and enforced in accordance with the General Construction Law of the State of New York except where the context otherwise requires or a different rule is provided by these rules.
  1. These rules shall be construed consistently with the provisions of the Act, including any amendments thereto.
  2. Provisions of these rules that restate the Act and that do not provide rules or procedures for the exercise of regulatory authority shall not be construed as increasing or diminishing any rights or duties created by the Act, but may be used to assist in the interpretation of the Act.
  3. When the interpretation or application of a provision of these rules in a particular case is uncertain, the description of the purpose and objectives of LMEP set forth in 66 RCNY § 5-51 shall be used to assist in the interpretation and application of such provision.
  4. Reference to particular provisions of law in these rules shall be deemed to refer to such provisions, as interpreted by the applicable decisions of Federal and New York State Courts.

§ 5-55 Material Misrepresentations, Misstatements and Omissions.

(a) An applicant's or recipient's refusal to provide factual information or to cooperate with the commissioner or the staff of DBS in the review of the facts and circumstances upon which a determination of eligibility or of continued eligibility is to be based shall constitute grounds for denial of an applicant's eligibility, or for suspension or revocation of a recipient's certificate of eligibility.
  1. The commissioner may deny an application for a certificate of eligibility or suspend, terminate or revoke a certificate of eligibility issued pursuant to the program whenever:

   (1) a recipient fails to comply with the requirements set forth in the Act or these rules; (2)  an application, certificate, amendment, supplement or other document submitted by an applicant pursuant to the Act or these rules contains a false or misleading statement as to a material fact or omits to state any material fact necessary in order to make the statements therein not false or misleading;

   (3) any real property tax or water or sewer charge due and payable with respect to an eligible building or targeted eligible building shall remain unpaid for at least one (1) year following the date upon which such tax or charge became due and payable, unless within thirty (30) days from the mailing of a notice of termination by DBS satisfactory proof is presented to DBS that any and all delinquent taxes and charges owing with respect to such building as of the date of such notice have been paid in full or are currently being paid in timely installments pursuant to a written agreement with the appropriate City agency; or

   (4) any payment in lieu of taxes payable with respect to such buildings shall remain unpaid for at least one (1) year following the date upon which such payment became due and payable, unless within thirty (30) days from the mailing of a notice of termination by DBS satisfactory proof is presented to DBS that any and all delinquent payments in lieu of taxes with respect to such building as of the date of such notice have been paid in full or are currently being paid in timely installments pursuant to a written agreement with the appropriate City agency.

  1. DBS shall revoke a certificate of eligibility in the event a recipient fails at any time within the first five (5) years of the benefit period to submeter any portion of a building as required by the Act or in accordance with the requirements set forth in 66 RCNY § 5-63(d)(1). The City may maintain a civil action or proceeding to recover an amount equal to any benefits improperly obtained.

§ 5-56 Actions of Employees.

Employees and agents of the City whose duties require them to take actions in connection with ECSP shall perform such duties, subject to the lawful direction of their supervisors and appropriate public officers, in accordance with these rules. However, noncompliance by such employees or agents with the requirements of these rules shall not be deemed to void any obligation of, or to waive any requirement imposed on, an applicant or recipient, or to excuse any noncompliance by an applicant or recipient with the provisions hereof or of any law. Such noncompliance shall not create any right of relief from the City or its employees or agents in favor of any person adversely affected thereby.

§ 5-57 Separability.

If any provision of these rules or its application shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remaining provisions of these rules, but shall be confined in its operation to the provision thereof directly involved.

§ 5-58 Effective Date of Rules.

The effective date of these rules shall be November 1, 2000, and they shall apply to persons certified as eligible to receive special rebates under the laws and rules applicable to LMEP prior to such effective date as well as to applicants certified as eligible for such special rebates after such effective date, provided that where bills for sales of energy services are rendered on a monthly billing cycle, the calculation of special rebates shall, for each eligible revitalization area energy user, eligible redistributor of energy or qualified eligible redistributor of energy, be based on the applicable percentages and eligible charges under the provisions of the Act and these rules beginning with the first billing cycle beginning after November 1, 2000, and the calculation of such rebates prior to such time shall be based on the applicable percentages and eligible charges in effect on or before November 1, 2000, and provided, further, that special rebates shall be calculated pursuant to 66 RCNY § 5-66 or 66 RCNY § 5-67, if applicable, beginning with the first billing cycle beginning after June 1, 2001, and the calculation of such rebates prior to such time shall be based on the applicable percentages and eligible charges in effect on or before June 1, 2001.

Subchapter B: Eligibility and Amount of the Special Rebate

§ 5-61 Eligible Building.

To qualify as an eligible building, a building shall be located in an eligible revitalization area and:

  1. shall meet the criteria set forth in paragraphs (1), (2), (3) or (4) below:

   (1) such building is eligible to obtain benefits under Title 2-D of Article 4 of the Real Property Tax Law, or would be eligible to receive benefits under such title except that such property is exempt from real property taxation and the requirements of paragraph (b) of subdivision seven of section four hundred eighty-nine-dddd of such law have not been satisfied, provided that application for such benefits was made after June 30, 1995, and before July 1, 2005, that construction or renovation of such building or structure was described in such application, that such building or structure has been substantially improved by such construction or renovation, and that the minimum required expenditure as defined in such title has been made within such period of time established by the applicable provisions of Title 2-D of Article 4 of the Real Property Tax Law for the construction of a new building or structure; or

   (2) such building is the subject of an IDA inducement resolution adopted by the IDA after June 30, 1995 and before July 1, 2005, to receive financing by IDA, provided that IDA financing has been used in whole or in part to substantially improve the building by construction or renovation, that expenditures made for improvements to the building have been made in excess of twenty percent (20%) of the assessed value of the real property and buildings, and that such expenditures have been made within thirty-six (36) months after the earlier of: (A) the issuance by IDA of bonds for such financing; or (B) the conveyance of title to such building to IDA; or

   (3) such building is owned by the City or UDC, and is subject to a lease that was approved in accordance with the applicable provisions of the Charter or by UDC’s board of directors, as the case may be, and such approval was obtained after June 30, 1995, and before July 1, 2005, provided that expenditures have been made for improvements to such real property in excess of twenty percent (20%) of the assessed value of the real property and buildings, and that such expenditures have been made within thirty-six (36) months after the effective date of such lease; or

   (4) is eligible to obtain benefits as mixed-use property, or would be eligible to obtain benefits as mixed-use property except that such building is exempt from real property taxation and the requirements of paragraph (b) of subdivision ten of section four hundred eighty-nine-ccccc of the Real Property Tax Law of the State of New York have not been satisfied, provided that application was made after June 30, 1995, and before July 1, 2000, that such building has been substantially improved by such renovation, and that the minimum required expenditure as defined in such title has been made;

  1. such construction or renovation described in subdivision (a) of this section shall occur subsequent to filing for a building permit for such construction or renovation. In the case where a building permit is not required for renovation or construction (e.g., installation of machinery), an application shall be filed prior to beginning any work on the building the expenditures for which are described in subdivision (a) of this section. Such fact must be documented by a written statement by a licensed professional architect or licensed professional engineer sworn to or affirmed under penalties of perjury;
  2. such building or portion thereof shall have provisions to receive electricity either: (i) directly from a utility; or (ii) from NYCPUS; and
  3. such building or portion thereof is metered or submetered in accordance with the provisions set forth in 66 RCNY § 5-63(d)(1).

§ 5-62 Eligible Redistributor of Energy.

(a) Only eligible redistributors of energy and qualified eligible redistributors of energy, as described in, and to the extent permitted by, the Act and these rules, are eligible for special rebates under LMEP.
  1. To qualify for benefits as an eligible redistributor of energy, an applicant must own or lease an eligible building, or a portion thereof, and purchase energy services on a metered basis from a utility or NYCPUS, and:

   (1) i)  resell or otherwise redistribute such energy services to one or more eligible revitalization area energy users that occupy such eligible building; or

      (ii) consume or use such energy services itself and qualify as an eligible revitalization area energy user; and

   (2) individually and accurately meter or submeter the energy services it redistributes in accordance with the provisions set forth in 66 RCNY § 5-63(d)(1).

  1. A person that owns or leases any portion of an eligible building containing mixed-use property shall not be an eligible redistributor of energy unless that portion of such mixed-use property used for commercial purposes is metered by a utility or NYCPUS directly and separately from other portions of such mixed-use property.

§ 5-63 Eligible Revitalization Area Energy Users.

(a) To qualify for benefits as an eligible revitalization area energy user, a person shall: (1)  purchase or otherwise receive energy services for its own use either directly from a utility or NYCPUS or from an eligible redistributor of energy or a qualified eligible redistributor of energy;

   (2) occupy, operate or manage premises in an eligible building or a targeted eligible building; and

   (3) be metered or submetered in accordance with the provisions set forth in subdivision (d) of this 66 RCNY § 5-63.

  1. A person shall not qualify as an eligible revitalization area energy user if such person engages in any of the following activities or uses in an eligible building or targeted eligible building:

   (1) occupying residential space;

   (2) engaging primarily in manufacturing activity;

   (3) operating a hospital;

   (4) operating a hotel; or

   (5) occupying retail space.

  1. An eligible redistributor of energy shall be an eligible revitalization area energy user with respect to:

   (1) vacant premises within an eligible building which have been constructed or renovated by such eligible redistributor of energy for occupancy by an eligible revitalization area energy user other than such eligible redistributor of energy; and

   (2) common areas, systems and facilities to the extent such common areas, systems and facilities are used by eligible revitalization area energy users and such usage is not billed to such users, except that a person shall not be an eligible revitalization area energy user of common areas, systems and facilities located in mixed-use buildings unless such common areas, systems and facilities are separate from the common areas, systems and facilities that serve that portion of the mixed-use property used for residential purposes and serve only that portion of such mixed-use property used for commercial purposes.

  1. A person shall not qualify as an eligible revitalization area energy user if the premises occupied, operated or managed by such person:

   (1) exceed the lesser of ten thousand (10,000) contiguous square feet in area or the entire floor of an eligible building or targeted eligible building and are not individually and accurately metered or submetered to determine the occupant’s usage of energy services. A person that occupies more than one (1) floor of an eligible building or targeted eligible building or more than ten thousand (10,000) contiguous square feet, is required to have only one (1) meter or submeter for its premises; or

   (2) are located in that portion of mixed-use property used for commercial purposes, and such portion is not metered by a utility or NYCPUS directly and separately from other portions of such mixed-use property.

§ 5-64 Eligible Charges and Eligible Public Utility Service Charges.

(a) Eligible charges.

   (1) Eligible charges are charges for energy services purchased from a utility at a rate or rates established pursuant to an order or rule of the PSC or FERC, other than charges for the purchase of the commodity of electricity, and shall include applicable rate reductions for economic development or similar purposes, and all taxes payable thereon and shall exclude charges in accordance with paragraph (2) of this subdivision (a).

   (2) Eligible charges shall not include the following charges:

      (i) charges for energy services used by persons that are not eligible revitalization area energy users;

      (ii) any special charges on bills relating to such energy services, including, but not limited to, collection charges, late payment charges or excess distribution charges, or any additional fee charged by an eligible redistributor of energy for energy services, as authorized by 66 RCNY § 5-71(g); and

      (iii) charges for energy services used for common areas, systems and facilities to the extent such services are excluded pursuant to subparagraph (3)(ii) of this section.

   (3) i)  Except as set forth in subparagraph (ii) of this subdivision, eligible charges shall include charges for energy services used for common areas, systems and facilities of an eligible building meeting the criteria set forth in paragraphs (1), (2) or (3) of 66 RCNY § 5-61(a) to the extent such common areas, systems and facilities are used by eligible revitalization area energy users, except that charges attributable to other users, if minor and incidental, may be included in eligible charges for such common areas, systems and facilities.

      (ii) Eligible charges shall not include charges for energy services used for common areas, systems and facilities of an eligible building meeting the criteria set forth in 66 RCNY § 5-61(a)(4), unless such common areas, systems and facilities are separate from the common areas, systems and facilities that serve that portion of the mixed-use property used for residential purposes and serve only that portion of such mixed-use property used for commercial purposes.

  1. Eligible public utility service charges.

   (1) Eligible public utility service charges are actual charges for energy services provided by a public utility service, including charges for public utility administrative services, and shall include all taxes payable thereon, and shall exclude charges in accordance with paragraph (2) of this subdivision (b).

   (2) Eligible public utility service charges shall not include the following charges:

      (i) charges for energy services used by persons that are not eligible revitalization area energy users;

      (ii) any special charges on such bills relating to energy services, including, but not limited to, collection charges, late payment charges or excess distribution charges, or any additional fee charged by an eligible redistributor of energy or qualified eligible redistributor of energy for energy services, as authorized by 66 RCNY § 5-71(g); and

      (iii) charges for energy services used for common areas, systems and facilities to the extent such energy services are excluded pursuant to paragraph (3)(ii) of this section.

   (3) i)  Except as set forth in subparagraph (ii) of this subdivision, eligible public utility charges shall include charges for energy services used for common areas, systems and facilities of an eligible building meeting the criteria set forth in paragraphs (1), (2) or (3) of 66 RCNY § 5-61(a) or a targeted eligible building meeting the criteria set forth in paragraph (1), (2) or (3) of subdivision (q) of § 25-aa of the Act to the extent such common areas, systems and facilities are used by eligible revitalization area energy users, except that charges attributable to other users, if minor and incidental, may be included in eligible charges for such common areas, systems and facilities.

      (ii) Eligible public utility service charges shall not include charges for energy services used for common areas, systems and facilities of an eligible building meeting the criteria set forth in 66 RCNY § 5-61(a)(4) or a targeted eligible building meeting the criteria set forth in paragraph (4) of subdivision (q) of § 25-aa of the Act, unless such common areas, systems and facilities are separate from the common areas, systems and facilities that serve that portion of the mixed-use property used for residential purposes and serve only that portion of such mixed-use property used for commercial purposes.

  1. 1)  An eligible redistributor of energy or qualified eligible redistributor of energy has the burden of demonstrating to the commissioner that charges for energy services are eligible charges or eligible public utility service charges. If a determination of such charges cannot be ascertained by the commissioner without a survey or such redistributor is not satisfied with the commissioner’s determination of such redistributor’s eligible charges or eligible public utility service charges, such redistributor may request that the commissioner cause a survey to be conducted by a licensed professional engineer satisfactory to DBS at such redistributor’s expense. Upon completion of the survey, the professional who prepares such survey shall submit the report, together with a certification as to the amount of eligible charges or eligible public utility service charges, to the commissioner for his or her review.

   (2) The commissioner, after reviewing all relevant documentation submitted by the applicant, shall, in his or her sole discretion, determine the amount of charges that constitute the eligible redistributor’s or qualified eligible redistributor’s eligible charges or eligible public utility service charges to which a special rebate may be applied. If such redistributor disagrees with the commissioner’s findings, such redistributor may request an opportunity to be heard in accordance with the procedures set forth in 66 RCNY §§ 5-45, 5-46 and 5-47.

§ 5-65 Special Rebates for Users and Redistributors that Applied for LMEP Benefits After October 31, 2000.

(a) Except as otherwise provided in subdivision (b) of this section, a utility that sells energy services to either an eligible redistributor of energy that applied for LMEP benefits after October 31, 2000, or a directly metered eligible revitalization area energy user that applied for LMEP benefits after October 31, 2000, shall make a special rebate to such redistributor or such user, as the case may be, equal to the following percentages of eligible charges:
Months During Benefit Period Special Rebate for Energy Services
first through ninety-sixth 45%
ninety-seventh through one hundred eighth 36%
one hundred ninth through one hundred twentieth 27%
one hundred twenty-first through one hundred thirty-second 18%
one hundred thirty-third through one hundred forty-fourth 9%

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  1. A utility that sells energy services to either an eligible redistributor of energy that applied for LMEP benefits after October 31, 2000 and that owns or leases an eligible building that has been designated as a landmark site before the issuance of a certificate of eligibility to such redistributor, or to a directly metered eligible revitalization area energy user occupying premises in such building that applied for LMEP benefits after October 31, 2000, shall make a special rebate to such redistributor or such user, as the case may be, equal to the following percentages of eligible charges:
Months During Benefit Period Special Rebate for Energy Services
first through one hundred eighth 45%
one hundred ninth through one hundred twentieth 36%
one hundred twenty-first through one hundred thirty-second 27%
one hundred thirty-third through one hundred forty-fourth 18%
one hundred forty-fifth through one hundred fifty-sixth 9%

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  1. Where, pursuant to a written agreement between NYCPUS and the power authority of the state of New York, NYCPUS sells energy services to an eligible redistributor of energy or a directly metered eligible revitalization area energy user that applied for and was certified as such after October 31, 2000, such utility shall make a discount to NYCPUS and NYCPUS shall make a special rebate to such eligible redistributor of energy or such directly metered eligible revitalization area energy user, which discount and special rebate shall be the product of the eligible charges to such eligible redistributor of energy or such directly metered eligible revitalization area energy user and the applicable percentage for a special rebate for energy services in the applicable schedule contained in subdivision (a) or (b) of this section.

§ 5-66 Special Rebates for Redistributors and Users that Applied for LMEP Benefits Prior to November 1, 2000 and Were Certified Prior to July 1, 2001. [Repealed]

(a) Paragraph (1) of subdivision (a) of § 25-bb of the general city law states that the "that the department of business services of a city having a population of one million or more may increase the percentages set forth in 66 RCNY § 5-65 at its discretion in order to maintain the special rebate at levels comparable to those historically provided under the program, pursuant to rules that are generally applicable to distinct classes of energy users." In accordance with this provision, the percentages set forth in this section of the rules shall be applicable to the calculations of special rebates for all eligible redistributors of energy or directly metered eligible revitalization energy users that applied for LMEP benefits prior to November 1, 2000 and for qualified eligible energy redistributors of energy that were certified before November 1, 2000. These percentages shall be in place from the first billing cycle beginning on or after April 30, 2003.
  1. Except as set forth in subdivision (d) of this section, for all billing cycles prior to the ninety-seventh month of each eligible redistributor of energy’s or directly metered eligible revitalization energy user’s benefit period occurring during the period beginning June 1, 2001, each redistributor or user shall receive rebates on eligible charges as specified in this paragraph; provided that the applicable rebate percentages shall not, for any affected electric account, exceed 100% of the eligible charges charged in any billing cycle.

   (1) The rebate percentage to be applied to eligible charges for energy services provided by a utility pursuant to its “PSC No. 9 – Electricity Rate Schedule” or “PSC No. 2 – Retail Access Rate Schedule” shall equal the percentages specified in Attachment A of Appendix A of these rules, which shall vary depending on such redistributor’s or user’s average monthly load factor, applicable service classification and the applicable rate, and whether such redistributor or user receives discounts on service pursuant to a service rider. If, for any affected redistributor or user, eligible charges for energy services were rendered at more than one service classification and/or at more than one rate for a service classification, the rebate percentages specified in Attachment A of Appendix A of these rules shall apply to the extent that each applicable service classification and/or rate and/or service rider applies to such redistributor or user. To the extent that such redistributor or user is served under the utility’s “PSC No. 9 – Electrical Rate Schedule” its rebate percentages shall be determined as if such redistributor or user was served under the utility’s “PSC No. 2 – Retail Access Rate Schedule.”

   (2) The rebate percentage to be applied to eligible public utility service charges for energy services provided by NYCPUS pursuant to its “Service Tariff No. 4 Rate Schedule” shall equal the percentages specified in Attachment B of Appendix A of these rules, which shall vary depending on such redistributor’s or user’s average monthly load factor, the applicable service classification and the applicable rate, and whether such redistributor or user receives discounts on service pursuant to a service rider or other tariff provisions. If, for any affected redistributor or user, eligible public utility service charges for energy services were rendered at more than one service classification and/or at more than one rate for a service classification or if discounted service was provided to part of the consumption rendered through an account pursuant to a service rider or tariff provision, the rebate percentages specified in Attachment B of Appendix A of these rules shall apply to the extent that each applicable service classification and/or rate and/or service rider or other tariff discount applies to such redistributor or user.

  1. Except as otherwise provided in subdivision (d) of this section, for all billing cycles after the ninety-sixth month of the benefit period and thereafter, the applicable rebate percentages on eligible charges, determined as specified in 66 RCNY § 5-67(b) or (e), shall be multiplied by an adjustment factor, depending on the month of the benefit period in which the energy services were rendered; provided that the applicable rebate percentages shall not, for any affected eligible redistributor of energy or directly metered eligible revitalization energy user, exceed 100% of the eligible charges charged in any billing cycle. The adjustment factors are as follows:
Month of Benefit Period Adjustment Factor
97 through 108 0.8
109 through 120 0.6
121 through 132 0.4
133 through 144 0.2
145 and thereafter 0.0

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  1. Where a utility that sells energy services to an eligible redistributor of energy that owns or leases an eligible building that has been designated as a landmark site before the issuance of a certificate of eligibility to such redistributor, or to a directly metered eligible revitalization area energy user occupying premises in such building that applied for LMEP benefits prior to November 1, 2000, all billing cycles in the one hundred and ninth month of each of the above-noted benefit periods and thereafter shall have the applicable rebate percentages on eligible charges, determined as specified in 66 RCNY § 5-67(b) or (e) of these rules, multiplied by an adjustment factor, depending on the month of the benefit period in which the energy services were rendered; provided that the applicable rebate percentages shall not, for any affected electric account, exceed 100% of the eligible charges charged in any billing cycle. The adjustment factors are as follows:
Month of Benefit Period Adjustment Factor
109 through 120 0.8
121 through 132 0.6
133 through 144 0.4
145 through 156 0.2
157 and thereafter 0.0

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  1. Where, pursuant to a written agreement between NYCPUS and the power authority of the state of New York, NYCPUS sells energy services to a qualified eligible redistributors of energy that has been individually approved by such power authority and certified prior to November 1, 2000, or to an eligible redistributor of energy or directly metered eligible revitalization area energy user that applied for benefits prior to November 1, 2000 and was certified as a redistributor or user after October 31, 2000, such utility shall make a discount to NYCPUS and NYCPUS shall make a special rebate to such qualified eligible redistributors or such eligible redistributor or user, which discount and special rebate shall be the product of the eligible public utility service charges to such qualified eligible redistributor of energy or such eligible revitalization area energy user and the applicable percentage for a special rebate for energy services in the applicable schedule contained in Attachment B of Appendix A of these rules.

Subchapter C: Implementation

§ 5-71 Implementation by Eligible Redistributor of Energy or Qualified Eligible Redistributor of Energy.

(a) An eligible redistributor of energy or qualified eligible redistributor of energy shall reduce the energy services bills rendered to eligible revitalization area energy users that are not directly metered and that occupy, operate or manage premises in eligible buildings owned or leased by such redistributor by an amount equal, in the aggregate, to one hundred percent (100%) of each special rebate received by such redistributor.
  1. An eligible redistributor of energy or qualified eligible redistributor of energy shall individually and accurately meter or submeter the energy services sold or otherwise redistributed by such redistributor to each such eligible revitalization area energy user or other occupant of eligible buildings so as to enable a determination of each such user’s or occupant’s usage of energy services, provided such user or occupant occupies, operates or manages premises that equal or exceed the lesser of ten thousand (10,000) contiguous square feet in area or the entire floor of a building.
  2. In order to establish the usage of energy services attributable to the tenants occupying an eligible building, an eligible redistributor of energy or qualified eligible redistributor of energy shall have a load study performed by a licensed professional engineer on all non-eligible users that are not individually metered or submetered. In addition, such redistributor shall have all of the submeters attributable to non-eligible users read by a licensed professional engineer.
  3. If an eligible redistributor of energy or qualified eligible redistributor of energy charges amounts to eligible revitalization area energy users and other users that vary annually or more frequently with the costs incurred by such redistributor for the operation of common areas, systems and facilities, such redistributor shall reduce such charges by the portion of the special rebates attributable thereto.
  4. An eligible redistributor of energy or qualified eligible redistributor of energy shall allocate the reductions required by subdivision (a) of this 66 RCNY § 5-71 in direct proportion to each such eligible revitalization area energy user’s use of energy services. Such reductions shall be determined as follows:

   (1) The total amount of such redistributor’s energy services bill shall be divided by the total amount of kilowatt hours used by the eligible building to determine the cost per kilowatt hour charge for the eligible building;

   (2) If the premises of such eligible revitalization area energy user or other user are submetered, such reduction shall be established by multiplying: (A) the amount of energy services use determined by such submeter; by (B) the dollar per kilowatt charge determined in (1) above; by (C) the amount of the special rebate set forth in 66 RCNY § 5-65 or 66 RCNY § 5-67;

   (3) If two or more eligible revitalization area energy users or other users share a submeter, the amount of the reduction to be shared by the eligible revitalization area energy users shall be determined in accordance with (2) above. This amount shall then be allocated among such users in direct proportion to the floor area of the premises occupied, operated or managed by each such user;

   (4) If the premises of such eligible revitalization area energy user is not required to be submetered by these rules, such discount shall be determined as follows:

  1. Divide the portion of the special rebate received by all submetered eligible revitalization area energy users by their total square footage to determine the special rebate per square footage amount; and
  2. Multiply the special rebate per square footage amount determined in (A) above by the square footage of each non-submetered eligible revitalization area energy user to determine the amount of the special rebate each such non-submetered eligible revitalization area energy user is entitled to;

   (5) The special rebate to be applied to common areas, systems and facilities shall be the total rebate received by the eligible building less: (A) the total special rebate received by each submetered eligible revitalization area energy user as determined in (2) above; and (B) the total special rebate received by each submetered eligible revitalization area energy user sharing a submeter as determined in (3) above; and (C) the total special rebate received by all non-submetered eligible revitalization area energy users as determined in (4) above.

  1. If the premises of an eligible revitalization area energy user are directly metered, such discount shall be determined by such meter.
  2. An eligible redistributor of energy or qualified eligible redistributor of energy shall limit charges to those eligible revitalization area energy users that are submetered in accordance with this section to a price for the purchase of energy services that shall be no higher than the price paid by such redistributor, provided that an additional fee, not exceeding twelve percent (12%) of such sales price, may be charged by such redistributor for energy services sold to such eligible revitalization area energy users.
  3. An eligible redistributor of energy or a qualified eligible redistributor of energy shall separately state in all energy bills rendered by such redistributor to an eligible revitalization area energy user for sales of energy services the amount of the reduction in charges for such services representing the share of the special rebate allocated to such user, or that no reduction has been made, and shall state the following: “You may be entitled to share a rebate which your landlord has received for charges for energy services pursuant to the revitalization area energy rebate program. The amount is separately stated and identified in this bill.” Any deviation from this language must be approved in advance by DBS.
  4. An eligible redistributor of energy or qualified eligible redistributor of energy shall keep records verifying compliance with the requirements of LMEP, and allow DBS access to such records.
  5. An eligible redistributor of energy or qualified eligible redistributor of energy shall provide access to eligible buildings or targeted eligible buildings to DBS for the purpose of inspecting meters, submeters and other equipment and verifying the accuracy of any application or supplement thereto filed with DBS and DOF.

§ 5-72 Implementation by a Utility and NYCPUS.

(a) Where a utility or NYCPUS is required to make a special rebate pursuant to 66 RCNY § 5-65 or 66 RCNY § 5-67, they shall reduce each energy services bill for each eligible redistributor of energy or qualified eligible redistributor of energy or directly metered eligible revitalization area energy user by the full amount of the special rebate that shall have accrued for the period covered by each such energy services bill. A utility or NYCPUS shall cease to make such reductions in such energy services bills upon receipt of notification from DBS that the certification of eligibility has been suspended or terminated, and a utility or NYCPUS shall change the amount of such reduction in accordance with notification from DBS.
  1. A utility shall not be required to make a special rebate to such eligible redistributor of energy or qualified eligible redistributor of energy in excess of the charges for energy services.

§ 5-73 Granting of Utility Credit to a Utility.

(a) Where a utility has granted special rebates to recipients in accordance with the provisions set forth in 66 RCNY § 5-65 or 66 RCNY § 5-67, it shall be entitled to a utility credit equal to the aggregate amount of all such special rebates it has provided to recipients.
  1. Such utility credit may be taken only as provided for in the code, these rules and rules promulgated by the commissioner of DOF, for the purpose of permitting utilities a deduction against certain taxes.

Subchapter D: Application, Approval, Notification of Eligibility and Commencement of Eligibility

§ 5-81 Forms and Filing of Application and Preapplication.

(a) All preapplication and application forms may be obtained from DBS, 110 William Street, 3rd Floor, New York, New York 10038, and, upon completion, forms shall be submitted to DBS at the above address. Only completed applications shall be considered by DBS in determining the applicant's eligibility, or ineligibility, under the Act and these rules.
  1. An applicant for benefits under LMEP shall file an application after June 30, 1995 and prior to the issuance of the first building permit for the construction or renovation required pursuant to 66 RCNY § 5-61, but not later than June 30, 2005. For the purposes of these rules, the first building permit shall be the building permit which would, in the ordinary course, allow construction to proceed, even though: (i) such permit was granted before submission of completed plans and specifications for the entire building; (ii) such permit, or the application, plans or specifications upon which it was granted, are later amended; (iii) such permit shall have expired by limitation of time or otherwise become invalid; or (iv) another permit is issued for the same project on the basis of the same or similar plans.
  2. In the case where a building permit is not required for renovation or construction, an application must be filed prior to beginning any work on the building the expenditures for which would be the basis for the determination of whether an applicant has reached the eligibility requirements set forth in 66 RCNY § 5-61. All preapplications must be filed not later than June 30, 2005.
  3. An applicant that purchases or leases an eligible building or a targeted eligible building or a portion thereof, the owner or lessor of which building or portion thereof has been receiving LMEP benefits, must file a preapplication to receive benefits within ninety (90) days of taking occupancy or signing a contract of sale or lease for such building, whichever is earlier.
  4. An applicant applying for benefits under 66 RCNY § 5-65(c) or 66 RCNY § 5-67(e), must receive approval from NYCPUS prior to submitting its preapplication to DBS and provide evidence of such approval as part of such application.

§ 5-82 Contents of Preapplication and Application.

(a) The applicant shall provide DBS with all information required in the preapplication form, including the following: the applicant's name; name and title of a contact person; telephone number; street address of the building site; block and lot number of the building site; Internal Revenue Service tax identification number; if applicable, the ICIP application number for the building site, and such other information as the commissioner deems necessary or useful for a preliminary determination that an applicant may be eligible to participate in LMEP.
  1. The applicant shall provide DBS with all information required in the application form and deemed necessary or useful for the administration of LMEP, including, but not limited to, the following:

   (1) assessed value of the real property and building(s) for which the application has been submitted; total square footage of the building floor area; names and addresses of any parent, subsidiaries or affiliated companies; and the name and title of an individual authorized to complete the application on behalf of the applicant;

   (2) estimated commencement date and completion date for construction or renovations;

   (3) a certified copy of the deed for the eligible building, or portion thereof, and any lease to the applicant as lessee of the building or any portion thereof;

   (4) a listing of all electricity account numbers serving the building or any portion thereof, and a copy of one (1) year’s energy bills for each account number directly metered by a utility servicing the building or a sworn statement by the applicant if the applicant has not received one (1) year’s bill;

   (5) building floor plans;

   (6) a list of every tenant or other person occupying, operating or managing premises in the building, including both eligible revitalization area energy users and other users, and the following information relating to such person: the business activity engaged in by such person; the square footage of the premises occupied, operated or managed by such person; contact person; telephone number; location in building identified on the building floor plans referred to in paragraph (v) of this subdivision; a list of the meter(s) or submeter(s) utilized by such person including meter identification numbers if submetered by the landlord or an eligible redistributor of energy or qualified eligible redistributor of energy; account number if directly metered by the utility or NYCPUS; a schematic or other description of the linkage between each such person’s consumption of electricity or energy services and the appropriate direct utility meter; and number of employees;

   (7) an applicant applying under the provisions set forth in subdivisions (a)(2), (3) or (4) of 66 RCNY § 5-61, shall submit evidence that the expenditures required by such provisions have been made within the time period specified therein;

   (8) copy of the relevant building permit issued by the Department of Buildings, if applicable;

   (9) relevant documents evidencing the authority of the City, the IDA, UDC or other lessor to lease a building or premises to the applicant, including a copy of the inducement resolution issued by IDA to the applicant, the IDA lease or financing agreement, if applicable; and

   (10) any other information, documentary or otherwise, including but not limited to, sworn statements and other data, that the commissioner deems relevant to evaluate the applicant’s application.

  1. In addition to the requirements of subdivisions (a) and (b) of this 66 RCNY § 5-82, an applicant that purchases energy services from NYCPUS shall submit as part of its application, a written contract between the applicant and NYCPUS setting forth the agreement by NYCPUS to provide energy services to the applicant, and stating the conditions for the sale of such energy services.
  2. The applicant shall have the affirmative burden of proving its eligibility to the satisfaction of the commissioner as to each and every fact contained in its application.

§ 5-83 Application Filing Fee.

(a) The applicant shall submit to the commissioner with its preapplication a check for a non-refundable application fee in the following amount:
Square Footage of Building Fee
Less than 10,000 square feet $500
10,001 to 25,000 square feet $1,000
25,001 to 50,000 square feet $1,250
50,001 to 100,000 square feet $1,500
100,001 to 250,000 square feet $2,500
Over 250,000 square feet $5,000

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  1. In addition to the filing fee, an applicant shall pay the costs of any survey conducted by or at the request of the commissioner, to develop or verify any factual matters relating to the application.
  2. All fees shall be made payable by check or money order to the “New York City Department of Small Business Services.”

§ 5-84 Representations and Warranties.

(a) As part of the preapplication, application, periodic reports and other reports required by the Act or these rules, the applicant shall certify and make such representations and warranties as may, from time to time, be necessary or appropriate to ensure compliance with the provisions of all applicable laws and these rules, including, but not limited to, the following:

   (1) that all statements made by or on behalf of the applicant in connection with such applications and reports are made by any person authorized by the applicant to make such statements and having actual knowledge or documentary information sufficient to make informed and accurate statements, and that such person believes all such statements to be true;

   (2) that the applicant has paid all of the real property taxes or water or sewer charges or payments in lieu of taxes or has paid timely installments of such taxes or payments in lieu of taxes in accordance with an agreement with a city agency with respect to an eligible building or targeted eligible building;

   (3) that the applicant represents, acknowledges, covenants and agrees that it bears sole responsibility for paying the full amount of energy services costs to a utility and/or NYCPUS for which it is directly metered until such time as the special rebate (if any) granted to applicant under LMEP is reflected on the applicant’s bill;

   (4) that the applicant agrees to permit or cause permission to be granted to the City and its agents to inspect its building and real property upon notice during regular business hours; and

   (5) any other representations or warranties as may be required in such applications or reports or requested by the commissioner.

  1. In addition to the requirements of subdivision (a) of this 66 RCNY § 5-84, the applicant shall covenant and agree to repay with interest at the prime rate, as reported in The New York Times (or similar periodical selected by the commissioner) on the effective date of its certificate of eligibility accrued from the date of receipt, the full amount of any benefits which the applicant has received if subsequently it is determined by the commissioner that the applicant was ineligible to receive those benefits for any reason.

§ 5-85 Approval of an Application.

(a) Approval by the commissioner of an application shall be based on a review of the following information:

   (1) representations and/or certifications made by the applicant in its application;

   (2) a review of the applicant’s prior energy bills;

   (3) a site visit performed by DBS; and

   (4) any other relevant factors relating to use and occupancy which is deemed to be relevant in making such a determination.

  1. The commissioner, after reviewing all relevant information and documentation submitted, shall, in his or her sole discretion, determine what constitutes the applicant’s or recipient’s eligible charges. If the applicant or recipient disagrees or is unsatisfied with the commissioner’s findings, the applicant or recipient may request an opportunity to be heard in accordance with the procedures set forth in Subchapter E of these rules.

§ 5-86 Notification to Applicant.

(a) If the commissioner grants an applicant's application for a certificate of eligibility, DBS shall forward a certificate of eligibility executed by the commissioner to the applicant.
  1. If the commissioner denies an applicant’s application for a certificate of eligibility, the commissioner shall notify the applicant in writing, of the reason for such denial. The applicant may request an opportunity to be heard in accordance with the provisions set forth in Subchapter E of these rules.

§ 5-87 Certificate of Eligibility.

(a) An applicant shall execute the certificate of eligibility and return it to the commissioner within thirty (30) days of the issuance date stated on the certificate of eligibility. Failure of the applicant to comply with this subsection may result in a revocation of the certificate of eligibility.
  1. The certificate of eligibility shall evidence:

   (1) the eligibility and qualification of an applicant as an eligible redistributor of energy or a qualified eligible redistributor of energy or as a directly metered eligible revitalization area energy user;

   (2) the benefit period the eligible premises or targeted eligible premises is qualified for;

   (3) the benefit an eligible redistributor of energy or a qualified eligible redistributor of energy or a directly metered eligible revitalization area energy user is qualified to receive; and

   (4) the date of issuance.

  1. DBS shall coordinate with the recipient, a utility and/or NYCPUS and DOF, where applicable, to establish the benefit period of the certificate of eligibility, which shall be within two (2) months of execution by the applicant of the certificate of eligibility.
  2. Subsequent to establishing the effective date of the certificate of eligibility, DBS shall affix such date to the applicant’s certificate of eligibility and forward a copy of the fully completed and executed certificate of eligibility to the applicant and any other necessary party.

§ 5-88 Notification to a Utility and/or NYCPUS.

(a) DBS shall notify a utility and/or NYCPUS whichever is appropriate, in writing, of an applicant's eligibility to receive a special rebate by forwarding to them a certified copy of an applicant's certificate of eligibility executed in accordance with 66 RCNY § 5-87.
  1. DBS shall notify a utility and/or NYCPUS, whichever is appropriate, in writing, of any changes in an applicant’s certificate of eligibility as set forth in 66 RCNY § 5-87.

§ 5-89 Periodic and Other Reports to DBS.

(a) During the benefit period, a recipient shall promptly notify the commissioner of any material changes which may affect a recipient's eligibility or the amount of the special rebate under LMEP, including but not limited to, changes in:

   (1) sources of energy services;

   (2) ownership of the eligible building or the targeted eligible building;

   (3) establishment of new direct accounts;

   (4) landlord’s or directly metered tenant’s usage of energy services;

   (5) the type of metering or method of billing for usage of energy services at the eligible building or targeted eligible building;

   (6) a change in the ratio between floor space occupied by eligible revitalization are energy users and that occupied by other occupants; and

   (7) the new tenancy of a noneligible revitalization area energy user.

  1. During the benefit period, DBS must be immediately notified of any additional utility accounts acquired or changes in utility account numbers in the eligible building or targeted eligible building.
  2. When it appears that the percentage of non-eligible use in the eligible building or targeted eligible building changes so that the special rebate for the eligible building or targeted eligible building appears to change, a new load study shall be performed in order to ascertain the new special rebate for the eligible building or targeted eligible building.
  3. During the benefit period, a recipient shall submit to the commissioner a reporting form on September 30th, December 31st, March 31st and June 30th of each year, to document the current status of the recipient’s continued eligibility under LMEP. Such reporting form shall include, but shall not be limited to, the following information:

   (1) the use or type of operations conducted at the eligible building or targeted eligible building;

   (2) any changes in the eligible building’s breakdown of eligible versus non-eligible uses;

   (3) a summary of building metering or submetering and utility accounts;

   (4) architectural rendering of building floor plans showing any changes, including changes in floor space, type of common areas, systems and facilities;

   (5) tenant list including, but not limited to, the following: square footage; contact person; telephone number; location in building; meter number if submetered by landlord or account number if directly metered by a utility; and number of employees;

   (6) change in the size of tenants’ premises;

   (7) any additions to or changes in the linkage between an eligible revitalization area energy user’s metering scheme and the utility’s main direct meter; and

   (8) such other information as the commissioner may request to determine eligible charges, eligibility and amount of special rebate.

  1. A qualified eligible redistributor of energy shall submit to DBS on an annual basis proof that the heating and cooling systems within the targeted eligible building continue to meet the performance standards specified in § 7813.21 of the State conservation code, or if applicable, a municipal code authorized pursuant to such article, or such predecessor section to which such targeted eligible building, when constructed or substantially renovated, was subject.
  2. All such information may be used by the commissioner for the purpose of determining whether the recipient’s certificate of eligibility should be suspended until a final determination of eligibility can be made and/or whether it shall be revoked or revised.
  3. Information received by the commissioner pursuant to this section or otherwise may be used by him or her to determine that a recipient does not satisfy the applicable eligibility criteria in the Act or these rules, and the commissioner may, among other things, suspend such recipient’s certificate of eligibility until a final determination of eligibility can be made, or revise, terminate or revoke such recipient’s certificate of eligibility.
  4. The commissioner shall notify the recipient, a utility and/or NYCPUS in writing of the determination to revise, suspend, terminate or revoke the recipient’s certificate of eligibility. A utility and/or NYCPUS must modify its bills to such recipient to reflect the change in benefits which such revision, suspension, termination or revocation to a recipient’s certificate of eligibility is intended to effect within thirty (30) days of receipt of written notice from the commissioner of such action.
  5. A recipient may request an opportunity to be heard in accordance with Subchapter E of these rules.

Subchapter E: Opportunities To Be Heard

§ 5-91 Requests for an Opportunity to be Heard.

Within thirty (30) days after the mailing of a written determination by the commissioner or his or her designee pursuant to the Act or these rules, an applicant or recipient that wants to contest such determination may submit documentation supporting its position to the commissioner or his or her designee and may request an opportunity to be heard.

§ 5-92 Opportunity to be Heard.

If an opportunity to be heard is requested in accordance with 66 RCNY § 5-91, the commissioner or his or her designee shall, within a reasonable period of time, review the application, all supporting documentation relating to the application and the documentation submitted by the applicant or recipient relating to the determination and schedule a date for a meeting with such applicant or recipient. At such meeting the applicant or recipient may present its arguments and discuss its supporting documentation with the commissioner or his or her representative.

§ 5-93 Final Determination; Notification.

(a)  After review of the documentation and arguments submitted by the applicant or recipient the commissioner or his or her designee shall make a final agency deter- mination.
  1. The commissioner or his or her designee shall notify the applicant or recipient in writing within a reasonable period of time of his or her final determination on the issue or issues presented by such applicant or recipient pursuant to 66 RCNY § 5-92.
  2. The commissioner or his or her designee shall notify the applicant or recipient, the appropriate utility, NYCPUS, the vendor and DOF, whichever is applicable, of a final determination to issue, deny, revise, suspend or revoke a certificate of eligibility.

APPENDIX A: RATE SCHEDULES

ATTACHMENT A: CON EDISON ELECTRIC SERVICE  PSC No. 2 Retail Access Rate Schedule and PSC No. 9  Electric Rate Schedule
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ATTACHMENT B: NEW YORK CITY PUBLIC UTILITY SERVICE ELECTRIC SERVICEService Tariff No. 4

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ATTACHMENT C [Repealed]

ATTACHMENT D [Repealed]

Chapter 6: Industry Ownership Program [Repealed]

§ 6-01 Definitions. [Repealed]

*§ 6-02 Marketing Plan. [Repealed]* ::

§ 6-03 Application Procedure. [Repealed]

*§ 6-04 Qualifications for Eligibility. [Repealed]* ::

§ 6-05 Evaluation Criteria. [Repealed]

*§ 6-06 Disbursements and Eligible Expenses. [Repealed]* ::

Chapter 7: Industrial Security Grant Program [Repealed]

§ 7-01 Definitions. [Repealed]

*§ 7-02 Eligibility for Industrial Security Grants. [Repealed]* ::

§ 7-03 Material Misrepresentations, Misstatements and Omissions. [Repealed]

*§ 7-04 Application Process. [Repealed]* ::

§ 7-05 Security Survey. [Repealed]

*§ 7-06 Work Procurement Process and the Grant Commitment Contract. [Repealed]* ::

§ 7-07 Reimbursements. [Repealed]

Chapter 8: Commercial Security Grant Program [Repealed]

§ 8-01 Purpose. [Repealed]

*§ 8-02 Definitions. [Repealed]* ::

§ 8-03 Security Education. [Repealed]

*§ 8-04 Eligibility for Commercial Security Grants. [Repealed]* ::

§ 8-05 Material Misrepresentations, Misstatements and Omissions. [Repealed]

*§ 8-06 Application Process. [Repealed]* ::

§ 8-07 Security Survey. [Repealed]

*§ 8-08 Work Procurement Process and the Grant Commitment Agreement. [Repealed]* ::

§ 8-09 Reimbursements. [Repealed]

*§ 8-10 Appeals. [Repealed]* ::

Chapter 9: Energy Services [Repealed]

Subchapter A: Energy Office [Repealed]

§ 9-01 Purpose. [Repealed]

*§ 9-02 Definitions. [Repealed]* ::

§ 9-03 Certification Requirements. [Repealed]

*§ 9-04 Model Lease Rider. [Repealed]* ::

§ 9-05 Application Procedures. [Repealed]

*§ 9-06 Notice of Certification or Revocation. [Repealed]* ::

§ 9-07 Books and Records. [Repealed]

*§ 9-08 Additional Penalties. [Repealed]* ::

§ 9-09 Repayment of Improperly Obtained Benefits. [Repealed]

*§ 9-10 Material Misrepresentation, Misstatements and Omissions. [Repealed]* ::

§ 9-11 Actions of City Employees. [Repealed]

**Subchapter B: Rates and Charges [Repealed]**

§ 9-21 Definitions. [Repealed]

*§ 9-22 General Terms and Conditions. [Repealed]* ::

§ 9-23 Firm Industrial Economic Development Nuclear Service (Service Tariff No. 4). [Repealed]

*§ 9-24 Firm Hydroelectric Service (Service Tariff No. 33). [Repealed]* ::

§ 9-25 Firm Industrial Economic Development Hydroelectric Service (Service Tariff No. 34). [Repealed]

*§ 9-26 Interruptible Hydroelectric Service (Service Tariff No. 36). [Repealed]* ::

Chapter 10: Division of Labor Services

Subchapter A: Promotion of Equal Employment Opportunity In Contracts Awarded By the City of New York

§ 10-01 Applicability.

These regulations apply to all contracts let by the City, as provided herein.

§ 10-02 Definitions.

Whenever used in these regulations, the following terms shall have the following meanings:

Age discrimination. “Age discrimination” means discrimination in employment related decisions because an individual is between the ages of 18 and 70.

Agency head. “Agency head” means the Commissioner, Chair or Director of any contracting agency.

Applicant. “Applicant” means an applicant for or recipient of City assistance for a construction project or other participant in a program related to City assistance for a construction project.

Citizenship status. “Citizenship status” means the citizenship of any person, or the immigration status of any person lawfully residing in the United States who is not a citizen or national of the United States.

City. “City” means the City of New York.

City assistance. “City assistance” means any financial assistance involving a construction project in the form of a grant, loan, contract, insurance or guarantee, or any other arrangement by which the City provides or otherwise makes available assistance in the form of:

   (1) funds;

   (2) services of city personnel;

   (3) tax exemptions and tax abatements; or

   (4) real or personal property or any interest in the use of such property, including:

      (i) transfers or leases of such property for less than fair market value or for a reduced consideration; and

      (ii) proceeds from a subsequent transfer or lease of such property if the City’s share of its fair market value is not returned to the City.

Client Services. “Client Services” shall have the meaning set forth in the Procurement Policy Board Rules of the City of New York (9 RCNY § 1-01(e)).

Compliance. “Compliance” means a contractor having acted in accordance with the requirements of E.O. 50 (66 RCNY § 10-14) and these regulations.

Commissioner. “Commissioner” means the Commissioner of the Department of Business Services.

Construction project. “Construction project” means any construction, reconstruction, rehabilitation, alteration, conversion, extension, improvement, repair or demolition of real property contracted by the City, except contracts for architectural, engineering or drafting services.

Contract. “Contract” means any written agreement, purchase order or instrument in which the City is committed to expend or does expend funds in return for work, labor, services, supplies, equipment, materials, or any combination of the foregoing:

   (1) Unless otherwise required by law, the term “contract” shall include any City grant, loan, guarantee or other City assistance for a construction project.*

   (2) The term “contract” shall not include:

      (i) contracts for financial or other assistance between the City and a government or government agency;

      (ii) contracts, resolutions, indentures, declarations of trust, or other instruments authorizing or relating to the authorization, issuance, award, and sale of bonds, certificates of indebtedness, notes, or other fiscal obligations of the City, or consisting thereof; or

      (iii) employment by the City of its officers and employees which is subject to the equal employment opportunity requirements of applicable law.

Contracting agency. “Contracting agency” means any administration, board, bureau, commission, department, or other governmental agency of the City, or any official thereof, authorized on behalf of the City to provide for, enter into, award, or administer contracts.

Contractor. “Contractor” means a person, including a vendor or applicant, who is a party or a proposed party to a contract with a contracting agency, first-level subcontractors of supply and service contractors, and all levels of subcontractors of construction contractors and applicants.

Director. “Director” means the Director of the Office.

Division. “Division” means the Division of Labor Services.

Economically disadvantaged person. “Economically disadvantaged person” means a person who at the time of application for entrance into a training program is either:

   (1) a resident of a single person household who receives

      (i) wages not in excess of 70 percent of the lower-level “urban family budget” for the City as determined by the U.S. Department of Labor, Bureau of Labor Statistics, or

      (ii) receives cash welfare payments under a Federal, State, or local welfare program; or

   (2) a member of a family which

      (i) receives a family income less than 70 percent of the lower-level “urban family budget” for the City as determined by the U.S. Department of Labor, Bureau of Labor Statistics, or

      (ii) receives cash welfare payments under a Federal, State, or local welfare program; or

   (3) a Vietnam-era veteran as defined by applicable Federal law who has been unable to obtain non-government subsidized employment since discharge from the armed services; or

   (4) a displaced homemaker who has not been in the labor force for 5 years but has during those years worked in the home providing unpaid services for family members and was

      (i) dependent on public assistance or the income of another family member but is no longer supported by that income, or

      (ii) receiving public assistance for dependent children in the home and that assistance will soon be terminated.

Employment report. “Employment report” means a report filed by a contractor containing information concerning its workforce composition, employment and salary practices, policies, programs, collective bargaining agreements, and pending lawsuits or consent decrees or court orders. The contractor may at its option submit as part of its employment report self-evaluation and transition plans written pursuant to § 504 of the Rehabilitation Act of 1973 or its affirmative action plan in lieu of those sections of the employment report which request information contained in said plan.

Employment update report. “Employment update report” means a periodic report required to be filed by a contractor when the Office identifies underutilization in a job group or employment policies and practices which mitigate against equal employment opportunity.

Equal employment opportunity. “Equal employment opportunity” means the treatment of all employees and applicants for employment without unlawful discrimination as to race, creed, color, national origin, sex, age, handicap, marital status, sexual orientation or citizenship status in all employment decisions, including but not limited to recruitment, hiring, compensation, training and apprenticeship, promotion, upgrading, demotion, downgrading, transfer, lay-off and termination, and all other terms and conditions of employment except as provided by law.

Handicapped individual. “Handicapped individual” means any person who has or had a physical or mental impairment that substantially limits one or more major life activities, and has a record of such an impairment.

   (1) The term “physical or mental impairment” means a physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin, and endocrine; or a mental or psychological disorder, such as mental retardation, developmental disability, organic brain syndrome, emotional or mental illness and specific learning disabilities. It includes, but is not limited to, such diseases and conditions as orthopedic, visual speech and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, alcoholism, substance abuse, and drug addiction.

   (2) The term “major life activities” means functions such as caring for one’s self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working.

   (3) The term “has a record of such an impairment” means has a history of, or has been classified as having, a mental or physical impairment that substantially limits one or more major life activities.

   (4) The term “otherwise qualified” means a handicapped person, who, with reasonable accommodation can satisfy the essential requisites of the job or benefit in question, and in the case of alcoholism, substance abuse and drug addiction, is recovering and currently free of abuse of same.

   (5) The term “reasonable accommodation” means such accommodation to an employee’s or prospective employee’s physical or mental impairment as shall not cause undue hardship in the conduct of the contractor’s business. The contractor shall have the burden of demonstrating such hardship.

Job group(s). “Job group(s)” means a group of jobs having similar content, wage rates, and opportunities;

Minorities. “Minorities” means Blacks, Hispanics (non-European), Asians, and Native Americans (American Indians, Eskimos, Aleuts);

Noncompliance. “Noncompliance” means a contractor having failed to act in accordance with E.O. 50 (66 RCNY § 10-14) and these regulations;

Person. “Person” means any natural person, corporation, partnership, sole proprietorship, or unincorporated agency;

Prime contractor. “Prime contractor” means any person who is a party or proposed party to a contract with a contracting agency;

Subcontractor. “Subcontractor” means any person having an agreement or arrangement or proposed agreement or arrangement with a contractor in which any portion of the contractor’s duty to perform work is undertaken or assumed by such person; provided that a supplier of unfinished products to a supply and service contractor needed to produce the item contracted for shall not be considered a subcontractor;

Trainee. “Trainee” means an economically disadvantaged person who qualifies for and receives training in one of the construction trades pursuant to a program, other than an apprenticeship program, approved by the Division and, where required by law, the New York State Department of Labor and the United States Department of Labor, Office of Apprenticeship and Training;

Underutilization. “Underutilization” means a statistically significant disparity between the employment of members of a racial, ethnic, or sexual group and their availability as determined by the Office’s utilization analysis.

§ 10-03 Covered Contracts.

(a) General.

   (1) All contractors doing business with the City without regard to the dollar amount or source of funding of the contract must be equal employment opportunity employers.

   (2) Contractors whose contracts are funded in whole or in part by federal or state funds must also meet the standards and applicable legal requirements of the funding source. To the extent that federal or state requirements are different from the requirements of E.O. 50 (66 RCNY § 10-14) and these regulations, the requirements of E.O. 50 (66 RCNY § 10-14) and these regulations shall apply, except in those circumstances where application of the City’s requirements would make it impossible for the contractor to meet the program requirements of the funding source.

  1. Submission requirements.

   (1) Except as provided herein, no contracting agency shall enter into a contract with any contractor unless such contractor’s Employment Report is first submitted to the Division for its review.

      (i) Before the contract may be awarded, each proposed supply and service contractor for a contract in excess of the small purchase limit established by rule of the Procurement Policy Board for procurement for goods and services who employs 50 or more employees is required to submit to the Division an Employment Report for the facility or establishment where the contract will be performed and where the Division deems necessary for a full review, the principle place of business or corporate headquarters;

      (ii) Before the contract may be awarded, each proposed construction contractor for a contract in excess of $1 million is required to submit to the Division an Employment Report for its principal place of business or headquarters, the construction site where the contract will be performed and other non-City funded construction sites of the contractor within the City;

      (iii) A contracting agency may award a requirements contract or an open market purchase agreement covered by these regulations prior to review by the Division of the contractor’s Employment Report but may not make a purchase order against such contract or agreement until it has first transmitted such contractor’s Employment Report to the Division and the Division has completed its review.

   (2) Unless otherwise provided by federal or state law, an Employment Report shall not be required for

      (i) a construction contract in the amount of $1 million or less or construction subcontract in the amount of $750,000 or less; or

      (ii) a supply and service contract or subcontract in the amount of the small purchase limit established by rule of the Procurement Policy Board for procurement for goods and services or less or where the contractor employs less than 50 employees. In such cases the contracting agency shall promptly notify the Office in writing prior to the award of such a contract. To determine the applicability of this paragraph (2) to a City-assisted construction contract, the amount or value of the City assistance shall govern; or

      (iii) an emergency contract or other exempt contract except as the Division may direct by regulation; or

      (iv) a contract with a contractor who has received a certificate of compliance with the equal employment opportunity requirements of applicable law from the Division within the preceding thirty-six months, or an appropriate agency of the State of New York or of the United States within the preceding thirty-six months, except as the Division may direct by regulation; or

      (v) a contract for a procurement of information technology that is within the small purchase limits established by rule of the Procurement Policy Board.

      (vi) a contract for Client Services, as defined above; except that nothing in this section shall prevent the Commissioner in the Commissioner’s sole discretion from requiring an employment report from a Client Services agency that has contracted with the City if the Commissioner believes that the Client Services agency is in violation of the equal employment requirements of City, State or Federal law.

   (3) Unless otherwise provided by law, an Employment Report shall not be required on a preaward basis for an emergency contract awarded pursuant to Executive Order No. 2 (2nd) (1970), as amended, the City Charter § 315 or the General Municipal Law § 103(4). In such cases, the contracting agency shall promptly notify the Office of the award of such a contract by submission of a copy of the documentation submitted to the Law Department. In the event of an emergency not covered under the foregoing provisions, the contracting agency head will notify the Director in writing requesting a waiver of the preaward submission requirements. Said request must contain a statement of reason for such waiver request.

   (4) Unless otherwise required by law, an Employment Report shall not be required for a covered supply and service contract with a contractor who has received a valid certificate of compliance with the equal employment requirement of applicable law as follows: (i) where a contractor has received a Certificate of Equal Employment Compliance issued after a desk audit by an appropriate federal or state agency in the preceding 12 months, the proposed contractor shall complete and submit the general information section of the Employment Report with a copy of such certificate of compliance to the Division;

      (ii) where a contractor has been desk audited by an appropriate government agency and found to have deficiencies with respect to equal employment compliance and has agreed, within the preceding 12 months, to correct these deficiencies, the contractor may submit the general information section of the Employment Report with documentation regarding the finding of deficiencies and corrective measures taken. The Division may thereafter, in its discretion, require the submission of all reports concerning implementation of corrective measures or a completed Employment Report; and

      (iii) where a contractor has been reviewed by the Division and issued a certificate of compliance in the preceding 12 months, the contractor shall complete and submit the general information section of the Employment Report with a copy of such certificate of compliance to the Division.

   (5) Unless otherwise required by law, the Division may in its discretion waive the submission of an Employment Report where the contractor is in the process of being desk audited by an appropriate government agency and grant the contractor a conditional approval. Upon completion of the audit, the contractor must advise the Bureau of the results of the audit. The Division may thereafter in its discretion, require the submission of all reports concerning implementation of corrective measures or a completed Employment Report.

   (6) The contractor may at its option submit its existing Affirmative Action Plan (“Plan”) in lieu of parts of the Employment Report, provided that the Plan contains essentially the same information as those portions of the Employment Report.

   (7) The contractor may at its option submit copies of its self-evaluation and transition plans written pursuant to § 504 of the Rehabilitation Act of 1973.

   (8) The Director may, on the written request of the contracting agency head, waive the submission requirements of E.O. 50 (66 RCNY § 10-14) and these regulations where the agency head certifies that:

      (i) the contracting agency has been unable to secure the submission of an employment report after making diligent efforts; and

      (ii) the proposed contractor is the sole provider of a unique service, supply or labor; or

      (iii) because of the unique circumstances of the contract it would not be in the public interest to require submission of an Employment Report prior to the award of the contract.

   (9) Failure to file timely, complete and accurate reports as required by E.O. 50 (66 RCNY § 10-14) and these regulations constitutes noncompliance with E.O. 50 (66 RCNY § 10-14) and these regulations. The Director may direct the contracting agency head to impose sanctions authorized by E.O. 50 (66 RCNY § 10-14) and these regulations in connection with such noncompliance. The Division shall notify the contracting agency in writing of any such failure as soon as practicable.

§ 10-04 Responsibilities of Contracting Agencies.

(a)  Contract language – all contracts. Each contracting agency shall incorporate into every contract in excess of the small purchase limit established by rule of the Procurement Policy Board to which it becomes a party the following language: "This contract is subject to the requirements of Executive Order No. 50  (66 RCNY § 10-14) ("E.O. 50") and the Rules and Regulations promulgated thereunder. No contract will be awarded unless and until these requirements have been complied with in their entirety. By signing this contract, the contractor agrees that it:

   (1) will not discriminate unlawfully against any employee or applicant for employment because of race, creed, color, national origin, sex, age, handicap, marital status, sexual orientation or citizenship status with respect to all employment decisions including, but not limited to recruitment, hiring, upgrading, demotion, downgrading, transfer, training, rates of pay or other forms of compensation, layoff, termination, and all other terms and conditions of employment;

   (2) will not discriminate in the selection of subcontractors on the basis of the owner’s, partners’ or shareholders’ race, color, creed, national origin, sex, age, handicap, marital status, sexual orientation or citizenship status;

   (3) will state in all solicitations or advertisements for employees placed by or on behalf of the contractor that all qualified applicants will receive consideration for employment without regard to race, creed, color, national origin, sex, age, handicap, marital status, sexual orientation or citizenship status or is an equal employment opportunity employer;

   (4) will send to each labor organization or representative of workers with which it has a collective bargaining agreement or other contract or memorandum of understanding, written notification of its equal employment opportunity commitments under E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder;

   (5) will furnish before the contract is awarded all information and reports including an Employment Report which are required by E.O. 50 (66 RCNY § 10-14) the rules and regulations promulgated thereunder, and orders of the Director of the Office of Labor Services (“Division”). Copies of all required reports are available upon request from the contracting agency; and

   (6) will permit the Division to have access to all relevant books, records and accounts by the Division for the purposes of investigation to ascertain compliance with such rules, regulations, and orders. The contractor understands that in the event of its noncompliance with the nondiscrimination clauses of this contract or with any of such rules, regulations, or orders, such noncompliance shall constitute a material breach of the contract and noncompliance with E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder. After a hearing held pursuant to the rules of the Division, the Director may direct the imposition by the contracting agency head of any or all of the following sanctions:

      (i) disapproval of the contractor;

      (ii) suspension or termination of the contract;

      (iii) declaring the contractor in default; or

      (iv) in lieu of any of the foregoing sanctions, the Director may impose an employment program. The Director of the Division may recommend to the contracting agency head that a contractor who has repeatedly failed to comply with E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder be determined to be nonresponsible. The contractor agrees to include the provisions of the foregoing paragraphs in every subcontract or purchase order in excess of the small purchase limit established by rule of the Procurement Policy Board to which it becomes a party unless exempted by E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as may be directed by the Director of the Division of Labor Services as a means of enforcing such provisions including sanctions for noncompliance. The contractor further agrees that it will refrain from entering into any contract or contract modification subject to E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder with a subcontractor who is not in compliance with the requirements of E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder.”

  1. Special provisions for construction contracts. In addition to the contractual provisions required in 66 RCNY § 10-04(a), each contracting agency shall incorporate into every contract for a construction project in excess of $125,000 to which it becomes a party the following language: “The contractor further agrees that it shall employ trainees for training level jobs and it shall participate in on-the-job training programs other than apprenticeship programs which are approved by the Division and where required by law, the U.S. Department of Labor, Bureau of Apprenticeship Training or the New York State Department of Labor. The contractor shall make a good faith effort to achieve the ratio of one (1) trainee to four (4) journey-level employees of each trade on each construction project; provided, that the trainee requirement shall not apply to contracts in the amount of $125,000 or less. “Trainee” means an economically disadvantaged person who qualifies for and receives training in one of the construction trades pursuant to a program, other than an apprenticeship program, approved by the Division and, where required by law, the New York State Department of Labor and the United States Department of Labor, Bureau of Apprenticeship and Training. The contractor shall be considered to employ 4 journey-level employees in a particular trade when he or she employs any number of journey-level employees in that craft whose aggregate work hours equal the number of hours 4 full-time journey-level employees would have worked in a work week as defined by the prevailing practice in the industry for the particular craft, i.e., 40 hours, 37 1/2 hours, 35 hours, etc. For example, in a craft where there is a forty-hour work week, the employment of 4 journey-level employees results in 160 hours of employment (4 × 40). Hence, any number of journey-level employees which results in 160 hours of work is considered for purposes of the training program to equal 4 journey-level employees, i.e., 3 journey-level employees who work 53 1/3 hours (3 × 53 1/3 = 160). The training requirement shall not apply to any trade in which the employment of four or more journey-level employees and the trainee shall be for less than 4 consecutive weeks; provided, that 4 weeks shall mean 4 weeks of full-time work as defined by the prevailing practice in the industry for the particular craft, i.e., 160 hours (4 weeks × 40 hours), 150 hours (4 weeks × 37 1/2 hours), 140 hours (4 weeks × 35 hours), etc. The contractor shall attempt to provide continuous employment for trainees after the completion of the contract to enable them to complete their course of training. Union contractors shall refer, recommend and sponsor for union membership any of their trainees who can perform the duties of a qualified journey-level employee or who have satisfactorily completed the training program. Such former trainee shall be paid full journey-level wages and fringe benefits, whether or not union membership is granted after such referral, recommendation or sponsorship, and the contractor shall attempt to continue the employment of such persons. In the event of a failure to provide training to the required number of trainees for the required number of weeks, the contractor’s compensation shall be decreased by an amount equal to the difference between the wages and fringe benefits paid by the contractor to the trainees and the wages and fringe benefits which would have been paid to the trainees had the number and duration of the positions been as required unless the contractor can demonstrate that it made a good faith effort to provide training and was unsuccessful. The wages and fringes deducted will be whatever a first term trainee would have received under the prevailing wage schedule in effect at the time the trainees should have been employed. A good faith effort includes at least:

   (i) documented efforts to secure trainees from approved training programs; and

   (ii) documented outreach efforts to New York State Employment Service, Department of Employment, TAP Centers, community and civil rights groups to identify candidates for training positions and sponsorship of those persons by the contractor for entrance into an approved training program; and

   (iii) written notification to the Division that the contractor has been unable to secure trainees pursuant to paragraphs (1) and (2) above and requesting the Division’s assistance in securing trainees; provided, that neither the provisions of any collective bargaining agreement nor the refusal by a union with whom the contractor has a collective bargaining agreement to recognize the validity of the training program shall excuse the contractor’s obligation to provide training pursuant to E.O. 50 (66 RCNY § 10-14) and these reg- ulations. To demonstrate its good faith effort, the contractor may at its option supply documentation concerning its employment of trainees on all its construction sites, both City and non-City funded. The Division will review this documentation as part of its analysis to determine whether the contractor made a good faith effort. The contractor will also include the training provisions of this section in every subcontract in excess of $125,000 to which it becomes a party unless exempted by E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder so that such provisions will be binding upon each subcontractor. The contractor will take such action with respect to any subcontract as the Division may direct as a means of enforcing such provisions, including sanctions for noncompliance. The contractor further agrees that it will assist and cooperate with the Division in obtaining the compliance of subcontractors with the requirements of E.O. 50 (66 RCNY § 10-14) and the rules and regulations promulgated thereunder, and it will furnish the Division with information necessary for supervision of such compliance.”

  1. Special provisions for city-assisted contracts. [Reserved.]
  2. Preaward compliance generally.

   (1) No contracting agency shall enter into a construction contract in excess of $1 million, or a supply and service contract in excess of the small purchase limit established by rule of the Procurement Policy Board for procurement for goods and services when the contractor employs 50 or more employees, unless the contractor’s Employment Report is first submitted to the Division for its review and approval.

   (2) The contracting agency, at the time a proposed covered contractor is identified, either through low bid or negotiation, shall notify the Division in writing of the name of the proposed contractor, the contract in question and dollar amount.

   (3) The contracting agency shall transmit a completed Employment Report to the Division within ten business days after the identification of a proposed covered contractor.

   (4) The contracting agency may thereafter award a contract, unless the Division gives prior written notice to the contracting agency and the contractor as follows:

      (i) If the Division notifies the contracting agency and the contractor within five business days after the receipt by the Division of the Employment Report that the contractor has failed to submit a complete report, the Director may require the contracting agency to disapprove the contractor unless such deficiency is corrected in a timely manner; and

      (ii) If the Division notifies the contracting agency and the contractor within fifteen business days of the receipt by the Division of the completed Employment Report that the Division’s analysis of the contractor’s workforce indicates underutilization and therefore the Division has reason to believe that the contractor is not in substantial compliance with applicable legal requirements and the provisions of E.O. 50 (66 RCNY § 10-14) and these regulations, the Division shall promptly take such action as may be necessary to remedy the contractor’s noncompliance. These time limits shall apply to the review of all Employment Reports submitted by subcontractors or contractors who are a party to a requirements contract or an open market purchase agreement.

      (iii) The time limits for this subdivision (d) begin to run on the business day following receipt of the Employment Report.

   (5) The contracting agency shall notify the Division in writing of the award of a covered contract.

   (6) With respect to covered supply and service contracts, the contracting agency shall also:

      (i) notify the Division upon the submission of the prime contractor’s Employment Report of any subcontracts in excess of the small purchase limit established by rule of the Procurement Policy Board for procurements for goods and services where the subcontractor employs 50 or more employees; and

      (ii) transmit the subcontractor’s completed Employment Report to the Division for review and approval.

   (7) With respect to covered construction contracts, the contracting agency shall in addition:

      (i) notify the Division in writing of its commencement to work order;

      (ii) notify the Division in writing of the contractor’s application for approval of subcontractors and transmit to the Division the subcontractors’ completed Employment Reports for review and approval before allowing the contractor to subcontract any work; and

      (iii) notify the Division in writing when the contract is 98 percent complete.

§ 10-05 Responsibilities of the Division of Labor Services.

(a) Division review – generally.

   (1) It shall be the responsibility of the Division to implement, monitor compliance with, and enforce E.O. 50 (66 RCNY § 10-14), these regulations and programs established pursuant to City, State and Federal law requiring contractors to provide equal employment opportunity.

   (2) The Division shall conduct a preaward compliance review to determine whether the contractor maintains nondiscriminatory hiring and employment practices and is taking steps to insure that applicants are employed and that employees are placed, trained, upgraded, promoted, paid, and otherwise treated during employment without regard to race, creed, color, sex, national origin, age, handicap, marital status, sexual orientation or citizenship status.

   (3) The Division’s preaward compliance review shall proceed in the following manner:

      (i) The Division shall analyze the contractor’s Employment Report, with special attention directed to the composition of the work force and the contractor’s employment policies, practices and procedures, including the following: recruitment, outreach, interviewing practices, pre-employment physical exams, employee evaluations, supervisor accountability, EEO training, promotional and transfer practices, training programs, employee counseling, job descriptions, architectural and other barriers, salaries and wage plans, fringe benefits, work environment, changing facilities, and collective bargaining agreements;

      (ii) If the Division deems it appropriate as part of its compliance review, or if the Office finds that the material submitted is incomplete or raises questions concerning the contractor’s efforts to meet the requirements of E.O. 50 (66 RCNY § 10-14) and these regulations, the Division may:

  1. hold a conference with the contractor to gain information necessary to complete the compliance review and, where necessary, to develop an Employment Program; and
  2. perform an on site review of those matters which were not fully or satisfactorily addressed in the Employment Report or at the conference.

      (iii) The Division will take into consideration consent decrees, court and administrative orders and conciliation agreements when analyzing a contractor’s compliance with E.O. 50 (66 RCNY § 10-14) and these regulations. The Division will not impose requirements which are inconsistent with the foregoing.

  1. Division review – supply and services contracts.

   (1) After the Division has completed its preaward compliance review and has determined that a proposed covered contractor is in compliance with the requirements of E.O. 50 (66 RCNY § 10-14) and these regulations, it shall issue a certificate of compliance which shall be valid for 36 months.

   (2) After the Division has completed its preaward compliance review and has identified underutilization or employment policies and practices which mitigate against equal employment opportunity, it may negotiate an Employment Program or approve the proposed covered contractor with reservations and monitor the compliance of the contractor with E.O. 50 (66 RCNY § 10-14) and these regulations during the term of the contract. The monitoring shall consist of:

      (i) an analysis of Employment Update Reports which the contractor is required to submit on a periodic basis; and

      (ii) where necessary, conferences and on site reviews.

  1. Division review – construction contracts.

   (1) During the preaward compliance review, the Division shall hold a preaward conference for contracts in excess of $1,000,000. At the conference, the Division will review the contents of the Employment Report in detail with the contractor to insure compliance with applicable Federal, State, and City equal employment opportunity and training requirements. The Division shall, thereafter, issue a certificate of compliance which shall be valid for thirty-six months.

   (2) During the term of the contract, the Division shall monitor the compliance of the contractor with the requirements of E.O. 50 (66 RCNY § 10-14) and these regulations. The monitoring shall consist of:

      (i) an analysis of the payroll records or other workforce data tables on City and non-City funded sites which the contractor is required to submit on a periodic basis; and

      (ii) field visits to City and non-City funded construction sites of the contractor within the City.

   (3) Upon completion of the contract and prior to final payment, the Division shall complete the audit of the contractor’s payroll records and any other information submitted concerning compliance with the training requirements of E.O. 50 (66 RCNY § 10-14) and these regulations to determine whether the contractor has made a good faith effort to comply with these requirements and whether the contractor’s compensation should be reduced for failure to provide the required training. The contractor and the contracting agency shall be given notice if the Division’s audit reveals that the contractor failed to provide training for the required number of trainees for the required number of weeks, or that the contractor has acted to circumvent the training requirements. In such case, unless the contractor can demonstrate that it made a good faith effort to provide the training, the contractor’s compensation will be reduced. The Division shall evaluate all information submitted by the contractor concerning its good faith effort and consult with the contracting agency before a decision is made as to whether a training violation has occurred. The Division shall notify the contractor and contracting agency of its determination.

  1. [Reserved.]

§ 10-06 Criteria for Compliance – Generally.

The Division shall determine the contractor’s compliance status after analysis of the composition of its work force and its employment policies and practices using the criteria enumerated in this section. In the event the analysis reveals that the contractor has not met the requirements of E.O. 50 (66 RCNY § 10-14) and these regulations, the Division may with the contractor develop an Employment Program to correct any underutilization or employment policies and practices which mitigate against equal employment-opportunity. The Employment Program shall consist of mandated actions based upon the criteria set forth in this section.

  1. Equal employment opportunity policy statement.

   (1) All covered contractors must have a written equal employment opportunity policy which indicates the chief executive Divisionr’s commitment to equal employment opportunity, assigns overall responsibility for implementation and provides for a reporting and monitoring procedure.

   (2) The contractor shall disseminate its equal employment opportunity policy internally as follows:

      (i) Include the policy in employee and supervisor manuals;

      (ii) Publicize the policy and company achievements in equal employment in company newspapers, magazines, annual reports, and other company publications;

      (iii) Discuss and explain the policy in training sessions and other meetings with employees, executive, management, and supervisory personnel, indicating individual responsibility for effective implementation;

      (iv) Meet with union officials to inform them of the policy, review all contractual provisions to insure they are nondiscriminatory, and bargain with respect to the inclusion of nondiscrimination clauses in all union agreements; and

      (v) Post the policy on company bulletin boards.

   (3) The contractor shall disseminate its equal employment opportunity policy externally as follows:

      (i) Inform all recruiting sources verbally and in writing of company policy, stipulating that these sources actively recruit and refer members of all protected groups for all positions;

      (ii) Incorporate the equal employment opportunity policy into all purchase orders, contracts, etc., covered by E.O. 50 (66 RCNY § 10-14) and these regulations; and

      (iii) Communicate the policy in all solicitations or advertisements for employees placed by or on behalf of the contractor.

   (4) An executive of the contractor shall be appointed as director or manager of company equal employment programs with sufficient resources to carry out the responsibility. His or her identity should appear on all internal and external communications on the company’s equal employment policy and programs. His or her responsibilities should include:

      (i) Developing policy statements, equal employment programs, internal and external communication techniques and programs;

      (ii) Assisting in the identification of problem areas;

      (iii) Assisting line management in arriving at solutions to problems;

      (iv) Designing and implementing audit and reporting systems that will

  1. Measure effectiveness of the contractor’s policy and implementing programs including supervisors’ and management’s adherence to the equal employment opportunity policy;
  2. Indicate need for remedial action;
  3. Determine the degree to which the contractor’s equal employment objectives have been met;

      (v) Serve as liaison between the contractor and enforcement agencies;

      (vi) Serve as liaison between the contractor and minority organizations, women’s organizations, advocate organizations for other protected groups and community action groups concerned with equal employment opportunity.

  1. Workforce analysis and identification of problem areas.

   (1) All covered contractors must complete and submit an Employment Report. The Employment Report must contain specific information concerning the composition of the contractor’s current and projected workforce.

   (2) The Division shall analyze the data on minorities and women submitted by the contractor with respect to all job groups. In determining whether minorities or women are being underutilized in any job group, the Division may consider the following factors:

      (i) The minority or female population of the labor area surrounding the facility or the construction site;

      (ii) The size of the minority or female unemployed work force in the labor or recruitment area surrounding the facility or the construction site;

      (iii) The percentage of the minority or female workforce as compared with the total workforce in the immediate labor area;

      (iv) The general availability of minorities or females having requisite skills in the immediate labor area;

      (v) The availability of minorities or women having requisite skills in an area in which the contractor can reasonably recruit;

      (vi) The availability of promotable and transferable minorities or women within the contractor’s organization;

      (vii) The existence of training institutions capable of training persons in the requisite skills; and

      (viii) The degree of training which the contractor is reasonably able to undertake as a means of making all job classes available to minorities or females.

   (3) In the event the Division’s analysis reveals underutilization of minorities or women it shall:

      (i) request an explanation of the apparent underutilization; and

      (ii) consider the anticipated expansion, contraction and turnover in the workforce before developing with the contractor an Employment Program or determining if it has reasonable cause to believe that the contractor is not in compliance with E.O. 50 (66 RCNY § 10-14) and these regulations.

   (4) The statistical criteria for evaluating the composition of the contractor’s workforce will be the following:

      (i) the term “underutilization” means a statistically significant disparity between the employment of members of a racial, ethnic, or sexual group and their availability as determined by the Division’s utilization analysis; and

      (ii) the term “utilization analysis” will mean an analysis of the contractor’s workforce using standard statistical techniques to test a null hypothesis that utilization of a given protected group is within acceptable limits, given its availability. For the purpose of these regulations, the null hypothesis will be rejected (i.e., underutilization will be assumed) whenever there is reason to believe that the utilization rate is below the availability rate at the 80 percent level of significance.

  1. Analysis of policies and practices – identification of problem areas. The Division shall analyze the following policies, practices and procedures of the contractor to insure that individuals are not discriminated against on the basis of their race, creed, color, national origin, sex, age, handicap, marital status, sexual orientation or citizenship status:

   (1) The composition of applicant flow;

   (2) The total selection process including position descriptions, position titles, worker specifications, application forms, interview procedures, pre-employment physical exams, inquiries with respect to disabilities, test administration, test validity, referral procedures, final selection process and similar factors;

   (3) Transfer and promotion practices;

   (4) Wage rates, salaries, fringe benefits and other forms of compensation;

   (5) Facilities including architectural and other barriers to the employment of handicapped persons, company sponsored recreation and social events, and special programs such as educational assistance;

   (6) Seniority practices and seniority provisions of union contracts;

   (7) Apprenticeship programs;

   (8) All company training programs, formal and informal;

   (9) Working atmosphere; and

   (10) Technical phases of compliance, such as notification to labor unions, retention of applications, notification to subcontractors, etc.

  1. Special provisions concerning compliance.

   (1) A contractor shall not be in violation of E.O. 50 (66 RCNY § 10-14) and these regulations if the contractor hires, employs, trains employees or otherwise discriminates on the basis of employees’ creed, sex or national origin in those certain instances where creed, sex or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of the contractor’s business. The contractor shall have the burden of demonstrating that it has complied with the requirements of this paragraph.

   (2) A contractor shall not be in violation of E.O. 50 (66 RCNY § 10-14) and these regulations with respect to age discrimination where it terminates the employment of any person who is physically unable to perform his or her duties or acts pursuant to a retirement policy or system where such policy or system is not merely a subterfuge to evade the purposes of E.O. 50 (66 RCNY § 10-14) and these regulations. The contractor shall have the burden of demonstrating that it has complied with the requirements of this paragraph.

   (3) Neither the provisions of any collective bargaining agreement, nor the failure by a union with whom the contractor has a collective bargaining agreement, to refer employees without regard to their race, creed, color, national origin, sex, age, handicap, marital status, sexual orientation or citizenship status shall excuse the contractor’s obligations under E.O. 50 (66 RCNY § 10-14) and these regulations.

   (4) A contractor shall not be in violation of E.O. 50 (66 RCNY § 10-14) and these regulations if it applies different standards of compensation or different terms, conditions or privileges of employment pursuant to a bona fide seniority system.

  1. Establishment of an employment program. If any of the following items are found by the Division in its analysis and the contractor fails to demonstrate that the item does not have a discriminatory effect, an Employment Program may be developed by the Division and the contractor containing special corrective action:

   (1) Underutilization of minorities or women in specific job groups;

   (2) Lateral or vertical movement of minority, female, handicapped or older employees occurring at a proportionately lesser rate than that of other employees;

   (3) Selection procedures which eliminate a significantly higher percentage of minorities, women, handicapped or older employees as compared to other employees;

   (4) Application and related pre-employment forms which do not comply with applicable equal employment standards;

   (5) Disparity in the wages, salaries, fringe benefits and other forms of compensation paid to minorities, women, handicapped or older employees as compared to other employees;

   (6) Position descriptions which are inaccurate in relation to actual functions and duties performed;

   (7) Formal or scored selection procedures not validated as required by applicable equal employment standards;

   (8) Tests not validated as required by applicable equal employment standards;

   (9) Discriminatory rejection of applicants for employment;

   (10) Minorities, women, handicapped, or older employees are excluded from or are not participating in company-sponsored activities or programs;

   (11) De facto segregation exists at some of the contractor’s facilities;

   (12) Architectural barriers to the employment and promotion of handicapped persons;

   (13) Seniority provisions which are discriminatory and not bona fide;

   (14) Failure by managers, supervisors or employees to support company EEO policy;

   (15) Minorities, women, handicapped or older employees are significantly underrepresented in training or career improvement programs;

   (16) No formal techniques established for evaluating effectiveness of equal employment opportunity programs;

   (17) No formal techniques established for evaluating supervisor adherence to equal employment opportunity programs;

   (18) Labor unions and subcontractors not notified of their responsibilities; or

   (19) Purchase orders not containing equal employment opportunity clause.

  1. Contents of an employment program. An Employment Program is a unique program developed to meet the needs of each contractor. The following illustrate the types of corrective actions which may be implemented in specific circumstances.

   (1) To encourage the flow of minority, female and handicapped applicants for employment it may be appropriate to direct:

      (i) Outreach to advocate organizations and referral sources for minority, female and handicapped persons;

      (ii) Encouragement of employment referrals by minority, female and handicapped employees;

      (iii) Inclusion of minorities, women and handicapped employees on the personnel relations staff;

      (iv) Participation by minority, female and handicapped employees in career days, job fairs, youth motivation programs, and related activities in their communities;

      (v) Recruitment at vocational schools, secondary schools, junior colleges, and colleges with predominantly minority, female or handicapped enrollments; and

      (vi) Help-wanted advertising in news media directed at minorities, women and handicapped persons in addition to the usual news media utilized.

   (2) To insure that all employees are given equal opportunity for promotion it may be appropriate to direct:

      (i) Posting and publicizing promotional opportunities and providing opportunities for self-nomination;

      (ii) An inventory of current minority, female, handicapped and older employees made to determine academic, skill and experience levels of individual employees and to establish a skills bank;

      (iii) Remedial, job training and work-study programs;

      (iv) Formal employee evaluation programs;

      (v) Requiring supervisory personnel to submit written justification for denying promotions to apparently qualified minority, female, handicapped or older employees;

      (vi) Formal career counseling programs which include attitude development, education aid, job rotation, buddy system and similar programs; and

      (vii) Training programs.

   (3) To insure that qualified handicapped applicants or employees are not excluded from employment or denied promotional opportunities, it may be appropriate to direct a contractor to make reasonable accommodations to the physical or mental limitations of employees and job applicants. The contractor shall have the burden of proving any claim it may make that directions from the Office under this paragraph (3) would impose an undue hardship in the conduct of the employer’s business.

   (4) To maintain a discrimination free environment and prevent harassment of employees placed through equal employment efforts it may be appropriate to direct:

      (i) special training programs for supervisors;

      (ii) evaluation of supervisors’ equal employment activities in their performance evaluation; and

      (iii) other appropriate measures.

   (5) Contractors should maintain adequate employment data with reference to minority status and sexual status, including progression line charts, seniority rosters, applicant flow data, applicant rejection ratios, referrals, placements, promotions and terminations, indicating minority and sex.

§ 10-07 Noncompliance.

(a) Division determination – failure to file documents.

   (1) Whenever the Director finds that a covered contractor has failed to file an Employment Report or a complete Employment Report, or has filed an Employment Report with substantial misrepresentations, the Director shall send a notice in writing by certified mail, return receipt requested, to the contractor with a copy to the contracting agency describing:

      (i) the noncompliance;

      (ii) the corrective action necessary to remedy the noncompliance; and

      (iii) a suggested date for a conciliation conference before sanctions will be imposed.

   (2) If the contractor fails to take corrective action by filing a complete Employment Report, the Director may make a determination as to the sanctions to be imposed.

   (3) The contractor shall have a period of seven business days to remedy the noncompliance and pursue conciliation efforts.

      (i) If conciliation is successful, a conciliation agreement shall be signed by the Director and the contractor.

      (ii) If conciliation is unsuccessful, the Director may find the contractor to be in noncompliance and direct sanctions to be imposed.

  1. Division determination – EEO compliance.

   (1) Whenever the Director has reasonable cause to believe that a contractor is in noncompliance, the Director shall send a notice promptly and in writing by certified mail, return receipt requested, to the contractor with a copy to the contracting agency, describing:

      (i) the noncompliance;

      (ii) the corrective actions necessary to remedy the noncompliance; and

      (iii) a suggested date for a conciliation conference before sanctions will be imposed.

   (2) The contractor shall have seven business days to show cause why it should not be found in noncompliance with E.O. 50 (66 RCNY § 10-14), and these regulations.

   (3) The Director shall offer the contractor an opportunity to conciliate. The Director shall pursue conciliation efforts for a period of seven business days. At the Director’s discretion, the conciliation period may be extended.

      (i) If conciliation is successful, a conciliation agreement shall be signed by the Director and the contractor.

      (ii) If conciliation is unsuccessful, a complaint shall be served on the contractor and a copy shall be served on the contracting agency and filed with the Division of Administrative Trials and Hearings or the hearing officer designated by the Commissioner.

   (4) The hearing shall be held in accordance with the rules of procedure adopted by the Division.

  1. Report and recommendations.

   (1) After the close of the hearing, the hearing officer shall render a report containing findings of fact, conclusions of law, and recommen- dations.

   (2) Findings of fact shall be based exclusively upon the evidence of record and on matters officially noticed. Findings must be based upon the kind of evidence on which reasonably prudent persons are accustomed to rely in the conduct of their serious affairs; even if such evidence would be inadmissible in a civil trial. The hearing officer’s experience, technical competence and specialized knowledge may be utilized in the evaluation of evidence.

   (3) The report and recommendations pursuant to this subdivision (c) shall be rendered in writing within ninety days after the conclusion of the hearing, or within ninety days after submission of proposed findings of fact, conclusions of law or briefs, if submitted pursuant to the Division’s rules of hearing procedure, unless this period is waived or extended by the hearing officer with the written consent of all parties, or for good cause shown on notice to all parties.

   (4) The hearing officer shall cause copies of the report and recommendations to be delivered or mailed to the Director, the parties and the contracting agency head.

  1. Exceptions to report and recommendations. Within ten days after receipt of the report and recommendations, any party may submit exceptions to said report or to any recommendation contained therein. These exceptions may be responded to by other parties within seven business days of their receipt by said parties. All exceptions and responses shall be filed with the Director. Service of exceptions and responses shall be made simultaneously on all parties to the proceeding and upon the hearing officer. Requests to the Director for additional time in which to file exceptions and responses shall be in writing and copies shall be served simultaneously on all other parties. Requests for extensions must be received no later than three business days before the exceptions are due.
  2. Record and final determination. After the expiration of the time for filing exception, the Director shall make a final determination on the basis of the record, which shall be the final Administrative Order. The record shall consist of the record of the enforcement proceeding, the rulings, report and recommendations of the hearing officer and the exceptions filed subsequent to the hearing officer’s decision. A copy of the determination of the Director shall be provided to the parties, the hearing officer, the contracting agency, the Corporation Counsel and the Comptroller.
  3. Sanctions.

   (1) The Director shall, based upon the findings of fact and recommendations of the hearing officer and the record as a whole, determine whether the contractor is complying with applicable legal requirements and the provisions of E.O. 50 (66 RCNY § 10-14) and these regulations.

   (2) If the Director makes a determination of noncompliance, the Director may direct the contracting agency head that the following sanctions be imposed:

      (i) disapproval of a proposed contractor;

      (ii) suspension or termination of a contract;

      (iii) declaring the contractor to be in default; or

      (iv) in lieu of any of the foregoing sanctions, the Director may impose an employment program.

   (3) The Director shall notify the contracting agency head in writing of the determination made and sanctions to be imposed.

      (i) The contracting agency head may file written objection to the sanctions imposed within 5 business days of the issuance of the determination by the Director.

      (ii) The contracting agency head must specify in writing his or her reasons for objecting to the sanctions imposed by the Director.

      (iii) In the event such objections are filed, the Director and the agency head shall jointly determine the sanctions to be imposed.

   (4) The Director of the Division may recommend to the contracting agency head that pursuant to the rules and regulations of the Board of Estimate a board of responsibility be convened for purposes of declaring a contractor who has repeatedly failed to comply with E.O. 50 (66 RCNY § 10-14) and these regulations to be nonresponsible.

  1. Complaints.

   (1) Any person who believes a violation of E.O. 50 (66 RCNY § 10-14) and these regulations has occurred may file a complaint, in writing, signed and dated, with the Office during the term of a contract.

   (2) The complaint shall include the name, address, and telephone number of the complainant, the name and address of the contractor committing the alleged violation of E.O. 50 (66 RCNY § 10-14) and these regulations, a description of the acts considered to be the violation, and any other pertinent information which will assist in the investigation and resolution of the complaint. The complaint shall be signed by the complainant or his or her authorized representative. Complaints alleging class-type violations which do not identify the alleged discriminatee or discriminatees will be accepted, provided the other requirements of this paragraph are met.

   (3) The Division may refer complaints to the appropriate City, State and Federal agencies for processing rather than processing under E.O. 50 (66 RCNY § 10-14) and these regulations. Upon referring complaints to another agency, the Division shall promptly notify the complainant and the contractor of such referral.

   (4) A prompt investigation shall be made by the Division.

   (5) The contractor involved shall cooperate fully with any investigation. Failure or refusal to furnish information or to cooperate in the investigation is a violation of E.O. 50 (66 RCNY § 10-14) and these regulations and may result in the imposition of sanctions.

   (6) Upon completion of the investigation, the complaining party and the contractor involved shall be informed of the results of the investigation in writing. If the Director has reasonable cause to believe that the contractor is in noncompliance with E.O. 50 (66 RCNY § 10-14) and these regulations, then enforcement proceedings shall be commenced.

   (7) It is a violation of E.O. 50 (66 RCNY § 10-14) and these regulations for a contractor, subcontractor, or other person to intimidate, threaten, coerce, or discriminate against any individual or business for the purpose of interfering with any right or privilege secured by E.O. 50 (66 RCNY § 10-14) and these regulations or because a complaint was filed, or a person testified, assisted or participated in any manner in an investigation, proceeding, or hearing under these regulations.

   (8) The identity of the complaining party shall be kept confidential on request only during the conduct of an investigation under these regulations. If such confidentiality hinders the investigation, the complaining party shall be so advised for the purpose of obtaining a waiver of confidentiality. The complaining party shall be further advised that failure to waive confidentiality may result in a determination based upon information already provided.

§ 10-08 Referral to Other Agencies on Suspicion of Violations.

When it has reason to believe that federal, state or local law has been violated, the Division shall notify the appropriate enforcement agency concerning its findings.

§ 10-09 Existing Contracts and Subcontracts.

All contracts and subcontracts in effect prior to April 25, 1980 which are not subsequently modified shall be administered in accordance with the equal employment and training provisions of any prior applicable Executive Orders. Any contract or subcontract modified on or after April 25, 1980 shall be subject to E.O. 50 (66 RCNY § 10-14).

§ 10-10 Confidentiality.

To the extent permitted by law and consistent with the proper discharge of the Division’s responsibilities under E.O. 50 (66 RCNY § 10-14) and these regulations, all information provided by a contractor to the Division shall be confidential.

§ 10-11 Delegation of Authority by the Director.

The Director is authorized to delegate the authority given to him or her by these regulations. The authority delegated by the Director pursuant to these regulations shall be exercised under his or her supervision.

§ 10-12 Separability.

If any provision of these regulations or the application thereof is held invalid, the remainder of these regulations and the application thereof to other persons or circumstances shall not be affected by such holding and shall remain in full force and effect.

§ 10-13 Effectiveness and Applicability.

The rules contained in this chapter shall become effective 30 days after final publication in the City Record and apply to all contracts, solicitations, invitations for bids, or requests for proposals which were made by the City or an applicant on or after said effective date, and to all negotiated contracts which have not been executed as of said effective date.

§ 10-14 Executive Order No. 50. [Repealed]

APRIL 25, 1980BUREAU OF LABOR SERVICES

By the power vested in me as Mayor of the City of New York, it is hereby ordered:

§ 1. Purpose. It is the purpose of this Order to ensure equal employment opportunity in City Contracting.

§ 2. Bureau Continued. The Bureau of Labor Services shall continue to serve such purposes and to have such responsibilities as restated by this Order.

§ 3. Definitions. Whenever used in this Executive Order, the following terms shall have the following meanings:

  1. Bureau means the Bureau of Labor Services;
  2. client services shall have the meaning set forth in the Procurement Policy Board Rules of the City of New York (9 RCNY § 1-01(e)).
  3. construction project means any construction, reconstruction, rehabilitation, alteration, conversion, extension, improvement, repair or demolition of real property contracted by the City;
  4. contract means any written agreement, purchase order or instrument whereby the City is committed to expend or does expend funds in return for work, labor, services, supplies, equipment, materials, or any combination of the foregoing:

   (i) Unless otherwise required by law, the term “contract” shall include any City grant, loan, guarantee or other City assistance for a construction project.

   (ii) The term “contract” shall not include:

      (A) contracts for financial or other assistance between the City and a government or government agency;

      (B) contracts, resolutions, indentures, declarations of trust, or other instruments authorizing or relating to the authorization, issuance, award, and sale of bonds, certificates of indebtedness, notes, or other fiscal obligations of the City, or consisting thereof; or

      (C) employment by the City of its officers and employees which is subject to the equal employment opportunity requirements of applicable law.

  1. contracting agency means any administration, board, bureau, commission, department, or other governmental agency of the City of New York, or any official thereof, authorized on behalf of the City to provide for, enter into, award, or administer contracts.
  2. contractor means a person, including a vendor, who is a party or a proposed party to a contract with a contracting agency, first-level subcontractors of supply and service contractors, and all levels of subcontractors of construction;
  3. Director means the Director of the Bureau of Labor Services;
  4. economically disadvantaged person means a person who, or a member of a family which, is considered economically disadvantaged under applicable law;
  5. employment report means a report filed by a contractor containing information as to the employment practices, policies, programs, employment statistics and collective bargaining agreements, if any, of the contractor in such form as the Office may direct by regulation;
  6. equal employment opportunity means the treatment of all employees and applicants for employment without unlawful discrimination as to race, creed, color, national origin, sex, age, disability, marital status, sexual orientation or citizenship status in all employment decisions, including but not limited to recruitment, hiring, compensation, training and apprenticeship, promotion, upgrading, demotion, downgrading, transfer, lay-off and termination, and all other terms and conditions of employment
  7. trainee means an economically disadvantaged person who qualifies for and receives training in one of the construction trades pursuant to a program other than apprenticeship programs, approved by the Office and, where required by law, the State Department of Labor and the United States Department of Labor, Office of Apprenticeship and Training;

§ 4. Responsibilities of Bureau. The responsibilities of the Bureau shall be as follows:

  1. To implement, monitor compliance with, and enforce this Order and programs established pursuant to City, State and Federal law requiring contractors to provide equal employment opportunity;
  2. To implement, monitor compliance with, and enforce on-the-job training requirements on construction projects;
  3. To monitor compliance by contractors with State and Federal prevailing wage requirements where required;
  4. To advise and assist contractors and labor unions with respect to their obligations to provide equal employment opportunity;
  5. To advise and assist persons in the private sector with respect to employment problems; (f) To establish advisory committees, including representatives of employers, labor unions, community organizations and others concerned with the enforcement of this Order; and
  1. To serve as the City’s principal liaison to Federal, State and local contract compliance agencies.

§ 5. Contract Provisions.

  1. Equal Employment Opportunity. A contracting agency shall include in every contract to which it becomes a party such provisions requiring the contractor to ensure equal employment opportunity as the Bureau may direct, consistent with this Order.
  2. On-the-Job Training. A contracting agency shall include in every contract concerning a construction project to which it becomes a party such provisions requiring the contractor to provide on-the-job training for economically disadvantaged persons as the Bureau may direct by regulation.
  3. Subcontractors. A contracting agency shall include in every contract to which it becomes a party such provisions requiring the contractor not to discriminate unlawfully in the selection of subcontractors as the Bureau may direct by regulation.

§ 6. Employment Reports.

  1. Submission Requirements. No contracting agency shall enter into a contract with any contractor unless such contractor’s employment report is first submitted to the Bureau for its review. Unless otherwise required by law, an employment report shall not be required for the following:

   (i) A construction contract in the amount of less than $1 million; a construction subcontract in the amount of less than $750,000; or a supply and service contract in the amount of $50,000 or less or of more than $50,000 in which the contractor employs fewer than 50 employees at the facility or facilities involved in the contract

   (ii) An emergency contract or other exempt contract except as the Bureau may direct by regulation; and

   (iii) A contract with a contractor who has received a certificate of compliance with the equal employment opportunity requirements of applicable law from the Bureau within the preceding thirty-six months, or an appropriate agency of the State of New York or of the United States within the preceding thirty-six months, except as the Bureau may direct by regulation;

  1. Bureau Review. The Bureau shall review all employment reports to determine whether contractors are in compliance with the equal employment opportunity requirements of City, State and Federal law and the provisions of this Order. The contracting agency shall transmit the employment report to the Bureau within ten business days after the selection of a proposed contractor. A contracting agency may thereafter award a contract unless the Bureau gives prior written notice to the contracting agency and the contractor as follows:

   (i) If the Bureau notifies the contracting agency and the contractor within five business days after the receipt by the Bureau of the employment report that the contractor has failed to submit a complete employment report, the Director may require the contracting agency to disapprove the contractor unless such deficiency is corrected in a timely manner;

   (ii) If the Bureau notifies the contracting agency and the contractor within fifteen business days of the receipt by the Bureau of the completed employment report that the Bureau has found reason to believe that the contractor is not in substantial compliance with applicable legal requirements and the provisions of this Order, the Bureau shall promptly take such action as may be necessary to remedy the contractor’s noncompliance as provided by this Order.

   Provided that a contracting agency may award a requirements contract or an open market purchase agreement prior to review by the Bureau of the contractor’s employment report, but may not make a purchase order against such contract or agreement until it has first transmitted such contractor’s employment report to the Bureau and the Bureau has completed its review in the manner provided by this section.

  1. Employment Program. The Bureau may require a contractor to adopt and adhere to a program designed to ensure equal employment opportunity.
  2. Periodic Reports. Contractors shall file periodic employment reports after the award of a contract in such form and frequency as the Bureau may direct by regulation to determine whether such contractors are in compliance with applicable legal requirements and the provisions of this Order.

§ 7. Training programs. The Bureau shall monitor the recruitment, training and placement of economically disadvantaged persons in on-the-job training programs on construction projects. Contracting agencies shall require contractors to make a good faith effort to achieve the ratio of one trainee to four journey-level employees of each craft on each construction project.

  1. The Bureau shall determine the number of trainees and hours of training required by each contractor or subcontractor for each construction project.
  2. In the event that a contractor fails to make a good faith effort to train the required number of individuals for the required amount of hours, the Bureau, after consultation with the contracting agency, shall direct such agency to reduce the contractor’s compensation by an amount equal to the amount of wages and fringe benefits which the contractor failed to pay to trainees.
  3. On-the-job training of economically disadvantaged persons shall be required on all construction contracts covered by the submission requirements of this Order

§ 8. Compliance Investigations and Hearings. The Bureau shall conduct such investigations and hold such hearings as may be necessary to determine whether contractors are in compliance with the equal employment opportunity requirements of City, State and Federal law and the provisions of this Order.

  1. Voluntary compliance. The Bureau shall seek to obtain the voluntary compliance of contractors and labor unions with applicable legal requirements and the provisions of this Order.
  2. Noncompliance. Upon receiving a complaint or at its own instance, the Bureau shall determine whether there is reason to believe a contractor is not in compliance with applicable legal requirements and the provisions of this Order.
  3. Hearings. The Bureau shall hold a hearing on prior written notice to a contractor and the contracting agency before any adverse determination is made with respect to such contractor’s employment practices or imposing any sanction or remedy for noncompliance with applicable legal requirements and the provisions of this Order. The hearing shall be held before a City hearing officer, or such other person designated by the Director, who shall submit a report containing findings of fact and recommendations to the Director. Based on the record as a whole, the Director shall determine whether a contractor has failed to comply with applicable legal requirements or the provisions of this Order and the appropriate sanctions for noncompliance.
  4. Notices. The Bureau shall give prior notice of any hearing and shall provide a copy of any hearing report and determination of the Director under paragraph (c) of this section to the contracting agency, the Corporation Counsel and the Comptroller. The Bureau shall notify appropriate City, State and Federal agencies of violations of law and may, with the approval of the Corporation Counsel, initiate proceedings in such agencies.

§ 9. Sanctions and Remedies. After making a determination that a contractor is not complying with applicable legal requirements and the provisions of this Order, the Director may direct that such sanctions as may be permitted by law or contractual provisions be imposed, including the disapproval; of a proposed contractor, the suspension or termination of a contract and the reduction of a contractor’s compensation, except as follows:

  1. Within five business days of the issuance of a determination by the Director under § 8(c), a contracting agency head may file with the Director written objections to the sanctions to be imposed. Where such objections have been filed, the Director and the contracting agency head shall jointly determine the appropriate sanctions to be imposed.
  2. In lieu of any of the foregoing sanctions, the Director may require a contractor to adopt and adhere to a program to ensure equal employment opportunity.

§ 10. Public Agencies. Any administration, board, bureau, commission, department or other public agency, not subject to this Order, which imposes by rule, regulation or order equal employment opportunity requirements, may, with the consent of the Mayor, delegate such responsibilities to the Bureau as may be consistent with this Order.

§ 11. Confidentiality. To the extent permitted by law and consistent with the proper discharge of the Bureau’s responsibilities under this Order, all information provided by a contractor to the Bureau shall be confidential.

§ 12. Regulations. The Bureau shall promulgate such regulations, subject to the approval of the Mayor, as may be necessary to discharge its responsibilities under this Order, including regulations increasing the dollar amounts and number of employees referred to in this Order. Any regulations of the Bureau establishing terms and conditions for contractors shall be approved as to form by the Corporation Counsel. Nothing contained herein shall be construed to bar any religious or denominational institution or organization, or any organization operated for charitable or educational purposes, which is operated, supervised or controlled by or in connection with a religious organization, from limiting employment or giving preference to persons of the same religion or denomination or from making such selection as is calculated by such organization to promote the religious principles for which it is established or maintained. The regulations shall set forth this exemption for religiously-sponsored organizations and provide for the discharge of the Bureau’s responsibilities in a manner consistent with such exemption.

§ 13. Annual Report. The Bureau shall submit an annual report to the Mayor concerning its responsibilities under this Order.

§ 14. Separability. If any provision of this Order or the application thereof is held invalid, the remainder of this Order and the application thereof to other persons or circumstances shall not be affected by such holding and shall remain in full force and effect.

§ 15. Revocation of Prior Orders. Executive Orders No. 71 (1968), No. 20 (1970), No. 23 (1970), No. 27 (1970), No. 31 (1971), No. 74 (1973), No. 7 (1974), and No. 80 (1977) are hereby revoked and the first paragraph of Section 2 of Executive Order No. 4 (1978) is hereby deleted. Nothing in this Order shall be deemed to relieve any person of any obligation not inconsistent with this Order assumed or imposed pursuant to an Order superseded by this Order.

§ 16. Effective Date. This Order shall take effect immediately.

Chapter 11: Division of Economic and Financial Opportunity

Subchapter A: Participation By Locally Based Enterprises In Construction Contracts Awarded By the City of New York

§ 11-01 Applicability.

These regulations apply to all construction contracts let by contracting agencies except

  1. those contracts funded in whole or in part by the federal or state government which are subject to different and conflicting small business or other requirements, such as minority business enterprise and woman business enterprise requirements, and
  2. contracts which include a contractor utilization plan for participation of certified minority-owned business enterprises and/or woman-owned business enterprises pursuant to Subchapter C of this Chapter.

§ 11-02 Definitions.

As used in these regulations, the listed terms are defined as follows:

Agency head. “Agency head” means the commissioner, chair or director of any contracting agency.

Building construction. “Building construction” means work, other than heavy construction, consisting of construction activities normally located in or on buildings including work directly supporting these activities and landscaping around these buildings.

Certification documents. “Certification documents” means documents which must be filed by a business seeking certification as a locally based enterprise (“LBE”) including but not limited to: sworn affidavits by an authorized official of the business; financial and management disclosure forms for the business; financial disclosure forms for any employees it claims are economically disadvantaged; economic development area profiles indicating where construction work was performed and the dollar amount of such work; verification of gross receipts by a certified public accountant or a licensed professional accountant; and signed release forms granting the City the right to request financial information from any government agency.

Commissioner. “Commissioner” means the Commissioner of the New York City Department of Business Services.

Compliance. “Compliance” means a contractor or subcontractor has acted in accordance with the requirements of Administrative Code, § 6-108.1 and these regulations.

Construction business. “Construction business” means a firm that performs heavy or building construction work.

Construction project. “Construction project” means any construction, reconstruction, rehabilitation, alteration, conversion, extension, improvement, repair or demolition of real property contracted by a contracting agency.

Contract. “Contract” means any written agreement whereby the City is committed to expend or does expend funds in connection with any construction project, except the term “contract” shall not include:

   (1) contracts for financial or other assistance between the City and a government or governmental agency;

   (2) contracts, resolutions, indentures, declarations of trust, or the instruments authorizing or relating to the authorization, issuance, award, and sale of bonds, certificates of indebtedness, notes, or other fiscal obligations of the City;

   (3) contracts for architectural, engineering or drafting services;

   (4) emergency contracts; or

   (5) contracts funded by the state or federal government which are subject to small business or other requirements which differ and conflict with the requirements of Administrative Code, § 6-108.1 and these regulations.

Contracting agency. “Contracting agency” means a city, county, borough, or other office, position, administration, department, division, bureau, board or commission, or a corporation, institution or agency of government, the expenses of which are paid in whole or in part from the city treasury.

Contractor. “Contractor” means a person who is a party or a proposed party to a construction contract with a contracting agency.

Department. “Department” means the Department of Business Services.

Division. “Division” means the Division of Economic and Financial Opportunity.

Economic development area. “Economic development area” means those areas of the City designated as eligible for participation in the Community Development Block Grant Program of the United States Department of Housing and Urban Development. See Appendices A and B for a listing of areas and maps of areas which meet this definition.

Economically disadvantaged person. “Economically disadvantaged person” means a person who, at the time of hiring by a locally based enterprise if such hiring occurred not more than three tax years prior to the time of such business’ application for certification or at the time of such application is a self-employed owner of such business, is:

   (1) a resident in a single person household who receives

      (i) wages not in excess of seventy percent of the lower-level “urban family budget” for the City as determined by the United States Department of Labor, Bureau of Labor Statistics (See Appendix C); or

      (ii) cash welfare payments under a federal, state or local welfare program; or

   (2) a member of a family which

      (i) has a family income less than seventy percent of the lower-level “urban family budget” for the City as determined by the United States Department of Labor, Bureau of Labor Statistics (See Appendix C), or

      (ii) receives cash welfare payments under a federal, state or local welfare program; or

   (3) a Vietnam era veteran as defined by applicable federal law who has been unable to obtain non-government subsidized employment since discharge from the armed services; or

   (4) a displaced homemaker who has not been in the labor force for five years but has during those years worked in the home providing unpaid services for family members and

      (i) was dependent on public assistance or the income of another family member but is no longer supported by that income, or

      (ii) is receiving public assistance for dependent children in the home which will soon be terminated.

Gross receipts. “Gross receipts” means the total gross income received by an LBE from any source during the applicable period.

Heavy construction. “Heavy construction” means work, on other than a building superstructure, consisting of construction activities located on or below the earth’s surface including excavation, building foundation, construction projects requiring the use of earth moving machinery or equipment (power shovels, bulldozers, scrapers), and any work associated with bridges.

Locally based enterprise or LBE. “Locally based enterprise” or “LBE” means a business which:

   (1) At the time of application for certification, has been in the building or heavy construction business and:

      (i) has received gross receipts in the last three or fewer tax years averaging $2 million or less on an annual basis; or

      (ii) has been in business for less than one tax year and has received gross receipts equal to or less than $2 million; and

   (2) in the tax year preceding the date of application has:

      (i) earned at least 25 percent of its gross receipts from work performed on construction projects located in economic development areas; or

      (ii) employed a work force of which at least 25 percent were economically disadvantaged persons.

Minority business enterprise. “Minority business enterprise” or “MBE” means an enterprise approved pursuant to federal or state law for participation in contracts subject to a minority business enterprise requirement.

Minority business enterprise requirement. “Minority business enterprise requirement” means any provision of federal or state law requiring public contractors to employ subcontractors owned by minorities, women or disadvantaged persons.

Noncompliance. “Noncompliance” means a contractor or subcontractor has failed to act in accordance with Administrative Code, § 6-108.1 and these regulations.

Person. “Person” means any natural person, corporation, partnership, sole proprietorship or unincorporated association.

Subcontractor. “Subcontractor” means any person having an agreement or arrangement or proposed agreement or arrangement with a contractor (where the parties do not stand in the relationship of an employer and employee) in which any portion of the contractor’s duty to perform work is undertaken or assumed by such person.

Woman business enterprise. “Woman business enterprise” or “WBE” means an enterprise approved pursuant to federal or state law for participation in contracts subject to a woman business enterprise requirement.

Woman business enterprise requirement. “Woman business enterprise requirement” means any provision of federal or state law requiring public contractors to hire subcontractors owned by women.

§ 11-03 Certification of LBE’s.

(a) Application for certification.

   (1) A contractor or subcontractor seeking certification as an LBE is responsible for submission of true and accurate certification documents demonstrating that it meets all eligibility criteria. Falsification of any documents submitted in connection with the LBE program may lead to the imposition of civil and criminal penalties as provided by law and contract and disqualification from the LBE program.

   (2) A contractor or subcontractor seeking certification as an LBE when no contract is pending shall submit its certification documents directly to the Division.

   (3) A contractor seeking certification as an LBE when bidding on a particular contract shall submit its certification documents to the contracting agency with its bid.

   (4) A subcontractor which has been proposed as an LBE subcontractor by a contractor bidding on a contract but has not been certified as an LBE shall have its certification documents submitted by the bidder in the sealed envelope to the contracting agency within 10 days after notification of low bid.

   (5) A subcontractor which has been proposed as an LBE subcontractor by a contractor subsequent to contract award but has not been certified as an LBE shall have its certification documents submitted by the contractor in a sealed envelope to the contracting agency within 10 business days from the date that the proposed LBE subcontractor is identified.

   (6) The contracting agency shall immediately transmit certification documents it receives to OEFO.

   (7) A contractor or subcontractor shall submit such additional information as may be required by OEFO in connection with its certifications as an LBE. Failure to submit such information within 10 business days of the date of a written request may result in the denial or revocation of certification as an LBE.

   (8) Consistent with the requirements of Federal, State and City law, neither OEFO nor any contracting agency shall disclose to unauthorized persons confidential business information submitted by contractors and subcontractors.

  1. Eligibility requirements.

   (1) A contractor or subcontractor shall be certified as an LBE upon a determination by OEFO that it has met the eligibility requirements set forth in the Administrative Code, § 6-108.1 and these regulations. The initial certification shall be effective for three years and shall expire at the end of such period, except as provided in 66 RCNY § 11-03(b)(2) and (b)(9). An LBE may apply to have certification renewed after this three year period, as set forth in 66 RCNY § 11-03(b)(4).

   (2) A business which has been in existence for less than one year prior to the date of application for certification and which would otherwise qualify as an LBE except that it does not meet the criteria set forth in 66 RCNY § 11-02 “Locally based enterprise” (2), may nevertheless be certified as an LBE, provided that such certification shall expire one year after it is granted unless the business meets the criteria set forth in such paragraph within one year of the date of its certification.

   (3) An LBE seeking continuance of certification granted according to subdivision (b)(2) of this section must submit certification documents before two months prior to the one year anniversary of such certification. If after this one year period, the business meets all the criteria for LBE eligibility as set forth in 66 RCNY § 11-02 “Locally based enterprise,” certification shall be granted for two more years. This business may apply to have certification renewed after this two year period as set forth in 66 RCNY § 11-03(b)(4).

   (4) An LBE may seek to have its certification renewed for successive one year periods by submitting certification documents before two months prior to the expiration date of its certification demonstrating that it continues to meet the eligibility requirements set forth in Administrative Code, § 6-108.1 and these regulations.

   (5) Failure to submit certification documents before two months prior to the applicable certification anniversary date, as set forth in 66 RCNY § 11-03(b)(3) or (b)(4), may result in the expiration of the LBE certification on the anniversary date.

   (6) If the certification of an LBE expires or if the LBE is determined to be ineligible for re-certification, the LBE may submit another set of certification documents six months after the date its original certification expired or six months after the date it was determined to be ineligible for re-certification.

   (7) If an LBE submits certification documents before two months prior to the applicable certification anniversary date, as set forth in 66 RCNY § 11-03(b)(3) or (b)(4), and the Division is unable to make a determination before the anniversary date, the LBE will be notified that certification will continue until the Division makes a determination as to the LBE’s status. If an LBE submits certification documents within the second month prior to the anniversary date, the Division may not be able to review the documents to determine their completeness and the LBE’s certification will expire. If the Division is able to review the documents, it may notify the LBE that its certification will continue beyond the anniversary date. If an LBE submits certification documents within the month prior to the anniversary date, its certification will expire on the anniversary date unless it is re-certified.

   (8) A business which was certified as an LBE prior to the effective date of these regulations shall be deemed to have been certified as an LBE on the date of such certification, provided however that any business which was less than one year old at the time of such certification and did not meet all the criteria of eligibility set forth in 66 RCNY § 11-03 “Locally based enterprise” of these regulations, shall be deemed to have been certified according to 66 RCNY § 11-03(b)(2) and such certification shall expire on the one year anniversary of the certification date. Such business may seek continuance of its certification as provided in 66 RCNY § 11-03(b)(3).

   (9) Any LBE which has been certified prior to the effective date of these regulations, for a period longer than specified in 66 RCNY § 11-03(b)(1) and (b)(2), must submit certification documents within two months after the effective date of these regulations, unless re-certification has been granted prior to the effective date of these regulations.

   (10) It is the intent of these regulations to qualify businesses as LBEs only if the ownership, management and operations of the business are conducted by persons who do not own, manage or operate other similar businesses which would otherwise be ineligible. Any business applying for LBE certification that does not conform to this intent shall be deemed ineligible as an LBE.

   (11) An LBE must be an independent business. A business that is a separate entity for tax or corporate purposes shall not necessarily be deemed to be an independent business. In determining whether a business is an independent business, the Division shall consider all relevant factors, including but not limited to the date the business was established, the identity of the principals, the sources of financing and the major shareholders, if any, of the business.

   (12) The owner of an LBE must possess the ability to manage the business and to make necessary management and policy decisions. The business must not be subject to any extraordinary formal or informal restrictions which limit the discretion of the owners.

   (13) The following types of ownership, control, or circumstances concerning a business seeking certification as an LBE shall render it ineligible for participation in the program:

      (i) ownership of the business by a non-LBE construction business;

      (ii) whole or partial ownership of the business by a person who is an owner in whole or in part of another construction business when the sum of the gross receipts of these businesses exceeds the limits as provided for in 66 RCNY § 11-22 “Locally based enterprise”;

      (iii) whole or partial ownership of a business, formed within three years of application, by a person who is an owner in whole or in part of another construction business not eligible for the program;

      (iv) control of the business by another construction business through substantial funding arrangements or;

      (v) organization of a firm in existence for less than one year whose officers, directors, principal stockholders, or employees serve as the officers, directors, principal stockholders, or employees, of another construction business and one concern is furnishing, or will furnish the other concern with subcontracts, financial or technical assistance, or other facilities, whether for a fee or otherwise.

   (14) If, after submitting certification documents, a business is found to not meet the requirements for LBE certification as set forth in 66 RCNY § 11-02 “Locally based enterprise” is otherwise ineligible, it may submit other certification documents for certification six months after the date it was declared ineligible.

   (15) A joint venture consisting of an LBE and a non-LBE business may participate in the LBE program as a contractor or subcontractor if both joint venturers’ contract work is defined clearly. However, only the LBE’s share of the contract work shall be credited towards the LBE goal.

   (16) An LBE shall notify the Division within 30 days after any change in its ownership or control. In addition, each LBE shall submit a report to the Division by December 30 of each year describing its present ownership and control. The Division shall review any changes made since an LBE’s certification to determine whether it remains eligible as an LBE.

   (17) A business certified prior to the effective date of these regulations, whose ownership or control has changed shall notify the Division within 30 days of the effective date of these regulations of such change.

   (18) Newly formed businesses and businesses whose ownership or control has changed since the date of issuance of these regulations shall be scrutinized by the Division to determine the reasons for the formation, change in the ownership or control of the business.

   (19) Once a business is certified as an LBE, it must satisfactorily complete any contracts it is awarded. If an LBE does not satisfactorily complete a contract, it will be required to participate in and successfully complete a technical assistance program through the Department. If the LBE fails to successfully complete or does not participate in the technical assistance program it will be de-certified as an LBE. An LBE will be given an opportunity to respond to any allegations that it has not performed satisfactorily on a contract or that it has not successfully completed or participated in the technical assistance program pursuant to the procedure in 66 RCNY § 11-03(c)(8). If an LBE is de-certified, such business may re-apply for certification after six months from the date of de-certification. It must demonstrate at that time that it has improved its work performance.

  1. Certification responsibilities of the Division.

   (1) Division shall have the power to certify, re-certify and de-certify a contractor or a subcontractor as an LBE upon a determination that the contractor or subcontractor has met or failed to meet the eligibility requirements and conditions set forth in Administrative Code § 6-108.1 and these regulations.

   (2) The determination by the Division as to a contractor’s or subcontractor’s eligibility for certification as an LBE shall be final.

   (3) the Division shall be the central repository for all documentation filed by contractors and subcontractors involving their status as an LBE.

   (4) the Division shall maintain and provide to all contracting agencies a list of all certified LBEs. the Division shall maintain and provide to all contracting agencies a list by borough of all contractors and subcontractors who perform work in such borough to qualify as LBEs.

   (5) When there is a contract pending award and a contractor has submitted incomplete certification documents, the Division shall notify the contractor either by telephone or letter within five business days of actual receipt of the documents that they are incomplete. The contractor shall have 10 business days from the date of the telephone call or from the date of the letter to complete the certification documents. If the contractor fails to submit the additional information within the time allowed, the contractor shall be so notified by the Division by letter on the next business day following the 10 day response period. Copies of this notification letter shall be sent to the prime contractor and the agency.

   (6) If complete certification documents have been submitted by a proposed LBE subcontractor for a particular contract waiting award, the Division within one business day after determining that the documents are complete, shall notify the contracting agency that the contract may be awarded.

   (7) The Division shall notify the proposed LBE contractor (and the prime contractor and the contracting agency where applicable) of its certification determination within 15 business days of the receipt of complete certification documents.

   (8) If the Division has reason to believe that an LBE is in violation of Administrative Code § 6-108.1 or these regulations, the Division shall provide notice to the LBE by certified mail, return receipt requested, of the alleged violation. Within twenty-five calendar days of the receipt of such notice the LBE may respond to the allegation in writing or request an opportunity to appear before the Commissioner or the Commissioner’s designee to respond to the allegation. The Commissioner or the designee, after considering the evidence of the alleged violation and any material submitted by the LBE, shall determine whether the LBE shall be de-certified. The Commissioner or the designee may determine that a contractor or subcontractor who has been de-certified shall be ineligible for certification for a period of up to three years after such de-certification.

   (9) If at any time the Division has reason to believe that a contractor or subcontractor has willfully and knowingly provided incorrect information or made false statements, it shall refer the matter to its Inspector General for investigation. The Inspector General shall investigate the matter in accordance with applicable rules and procedures, and, where appropriate, refer or report the matter to the Department of Investigation. Falsification of any document by a contractor or subcontractor may lead to the imposition of civil and criminal penalties as provided by law and contract, disqualification from the LBE program and debarment from City contracts.

   (10) The Division shall conduct audits of LBEs to verify information provided by them.

   (11) The Division shall determine the effectiveness of Administrative Code § 6-108.1 by conducting surveys or other studies it deems appropriate.

§ 11-04 Responsibilities of Contracting Agencies.

(a) Overall goals.

   (1) Each agency head shall, consistent with the requirements of applicable Federal, State and City law, including applicable competitive bidding requirements, seek to ensure that not less than 10 percent of the total dollar amount of all contracts awarded for construction projects during each fiscal year are awarded to LBEs.

   (2) Each agency head shall, consistent with the requirements for applicable Federal, State and City law, require that if any portion of a construction contract is subcontracted, not less than 10 percent of the total dollar amount of the contract shall be awarded to LBEs; except that where less than ten percent of the total dollar amount of the contract is subcontracted, such lesser percentage shall be so awarded.

  1. Contract language. Each contracting agency shall incorporate into each construction contract subject to these regulations to which it becomes a party the following language: Locally Based Enterprise Program

   (1) This contract is subject to the requirements of Administrative Code § 6-108.1 and the regulations promulgated thereunder. No contract shall be awarded unless and until these requirements have been complied with in their entirety.

   (2) Unless specifically waived by the agency head with the approval of the Division, if any portion of the contract is subcontracted, not less than 10 percent of the total dollar amount of the contract shall be awarded to locally based enterprise (“LBEs”); except that where less than ten percent of the total dollar amount of the contract is subcontracted, such lesser percentage shall be so awarded.

   (3) The prime contractor shall not require performance and payment bonds from LBE subcontractors.

   (4) If the contractor has indicated prior to award that no work will be subcontracted, no work shall be subcontracted without the prior approval of the agency head, which shall be granted only if the contractor makes a good faith effort beginning at least six weeks before the work is to be performed to obtain LBE subcontractors to perform the work.

   (5) If the contractor has not identified sufficient LBE subcontractors prior to award, it shall sign a letter of compliance stating that it complies with Administrative Code § 6-108.1, recognizes that achieving the LBE requirement is a condition of its contract, and shall submit documentation demonstrating its good faith efforts to obtain LBEs. After award, the contractor shall begin to solicit LBEs to perform subcontracted work at least six weeks before the date such work is to be performed and shall demonstrate that a good faith effort has been made to obtain LBEs on each subcontract until it meets the required percentage.

   (6) Failure of the contractor to comply with the requirements of Administrative Code § 6-108.1 and the regulations promulgated thereunder shall constitute a material breach of contract. Remedy for such breach of contract may include the imposition of any or all of the following sanctions:

      (i) reducing a contractor’s compensation by an amount equal to the dollar value of the percentage of the LBE subcontracting requirement not complied with;

      (ii) declaring the contractor in default;

      (iii) where non-compliance is by an LBE, de-certifying and declaring the LBE ineligible to participate in the LBE program for a period of up to three years.”

  1. Information to bidders. Each contracting agency shall incorporate into all information provided to bidders on construction contracts subject to these regulations the following language: “This contract is subject to the requirements of Administrative Code § 6-108.1 and the regulations promulgated thereunder. No construction contract will be awarded unless and until these requirements have been complied with in their entirety. Be advised that:

   (1) If any portion of the contract is subcontracted, not less than 10 percent of the total dollar amount of the contract shall be awarded to locally based enterprises (“LBEs”); except, where less than 10 percent of the total dollar amount of the contract is subcontracted, such lesser percentage shall be so awarded.

   (2) No contractor shall require performance and payment bonds from LBE sub- contractors.

   (3) No contract shall be awarded unless the contractor first identifies in its bid:

      (i) the percentage, dollar amount and type of work to be subcontracted; and

      (ii) the percentage, dollar amount and type of work to be subcontracted to LBEs.

   (4) Within 10 calendar days after notification of low bid, the apparent low bidder shall submit an “LBE Participation Schedule” to the contracting agency. If such schedule does not identify sufficient LBE subcontractors to meet the requirements of Administrative Code § 6-108.1, the apparent low bidder shall submit documentation of its good faith efforts to meet such requirements.

      (i) The “LBE Participation Schedule” shall include:

         (A) the name and address of each LBE that will be given a subcontract,

         (B) the percentage, dollar amount and type of work to be subcontracted to LBE, and

         (C) the dates when the LBE subcontract work will commence and end.

      (ii) The following documents shall be attached to the “LBE Participation Schedule”:

         (A) verification letters from each subcontractor listed in the “LBE Participation Schedule” stating that the LBE will enter into a formal agreement for work,

         (B) certification documents of any proposed LBE subcontractor which is not on the LBE certified list, and

         (C) copies of the certification letter of any proposed subcontractor which is an LBE.

      (iii) Documentation of good faith efforts to achieve the required LBE percentage shall include as appropriate but not be limited to the following:

         (A) attendance at pre-bid meetings, when scheduled by the agency, to advise bidders of contract requirements;

         (B) advertisement where appropriate in general circulation media, trade association publications, and small business media of the specific subcontracts that would be at least equal to the percentage goal for LBE utilization specified by the contractor;

         (C) written notification to associations of small, minority and women contractors soliciting specific subcontracts;

         (D) written notification by certified mail to LBE firms that their interest in the contract is solicited for specific work items and their estimated values;

         (E) demonstration of efforts made to select portions of the work for performance by LBE firms in order to increase the likelihood of achieving the stated goals;

         (F) documented efforts to negotiate with LBE firms for specific subcontracts including at a minimum: (a) The names, addresses and telephone numbers of LBE firms that were contacted, (b) A description of the information provided to LBE firms regarding the plans and specifications for portions of the work to be performed, (c) Documentation showing that no reasonable price can be obtained from LBE firms, (d) A statement of why agreements with LBE firms were not reached;

         (G) a statement of the reason for rejecting any LBE firm which the contractor deemed to be unqualified; and

         (H) documentation of efforts made to assist the LBE firms contacted that needed assistance in obtaining required insurance.

   (5) Unless otherwise waived by the agency head with the approval of the Division, failure of a proposed contractor to provide the information required by paragraphs (3) and (4) above may render the bid non-responsive and the contract may not be awarded to the bidder. If the contractor states that it will subcontract a specific portion of the work, but can demonstrate that despite good faith efforts it cannot achieve its required LBE percentage for subcontracted work until after award of contract, the contract may be awarded subject to a letter of compliance from the contractor stating that it will comply with Administrative Code § 6-108.1 and subject to approval by the agency head. If the contractor has not met its required LBE percentage prior to award, the contractor shall demonstrate that a good faith effort has been made subsequent to award to obtain LBEs on each subcontract until it meets the required percentage.

   (6) When a bidder indicates prior to award that no work will be subcontracted, no work may be subcontracted without the prior approval of the agency head, which shall be granted only if the contractor in good faith seeks LBE subcontractors at least six weeks prior to the start of work.

   (7) The contractor may not substitute or change any LBE which was identified prior to award of the contract without the permission of the agency head. The contractor shall make a written application to the contracting agency head for permission to make such substitution or change, explaining why the contractor needs to change its LBE subcontractor and how the contractor will meet its LBE subcontracting requirement. Copies of such application must be served on the originally identified LBE by certified mail return receipt requested as well as the proposed substitute LBE. The agency head shall determine whether or not to grant the contractor’s request for substitution.”

  1. Implementation – general.

   (1) Each contracting agency shall seek to reach its overall ten percent LBE goal by vigorously encouraging LBE prime participation and enforcing the ten percent (or less if applicable) LBE subcontracting requirement on all contracts where subcontracting will occur. The contracting agencies shall follow the activities outlined below to implement this requirement.

   (2) Each agency head shall designate one experienced contract manager to be its LBE liaison officer whose duties shall include directing, coordinating and overseeing agency staff with regard to implementing the procedures set forth in these regulations on a day-to-day basis. The officer’s responsibilities shall include:

      (i) Examining projects to determine which invitations to bid are to be designated for the LBE prime contractor outreach procedure set forth in 66 RCNY § 11-04(e);

      (ii) Preparing and forwarding bid notices of potential LBE prime contracts and subcontracts to LBEs;

      (iii) Verifying a bidder’s LBE Participation Schedule and indicating, in writing, whether the contract can be awarded;

      (iv) Aiding contractors to locate potential LBE subcontractors for various contract services;

      (v) Assisting LBEs in complying with procedures for bidding on agency contracts;

      (vi) Coordinating and overseeing investigations of contractor compliance;

      (vii) Preparing and submitting the required status reports to the Division.

   (3) Each contracting agency shall utilize the list of certified LBEs provided by the Division to identify potential LBE contractors and subcontractors.

   (4) LBE participation shall be determined and applied toward meeting the requirements of Administrative Code § 6-108.1 on the basis of work actually performed in the following manner:

      (i) the total dollar value of a contract awarded to an LBE contractor shall be applied toward the LBE goal of the contracting agency;

      (ii) the total dollar value of a subcontract let to an LBE subcontractor and performed by the LBE subcontractor shall be applied toward the contractor’s LBE requirement and the LBE goal of the contracting agency (work further subcontracted by an LBE subcontractor to a non-LBE subcontractor shall not be so applied); and

      (iii) the portion of the total dollar value of a contract with a joint venture of an LBE and non-LBE business eligible under these regulations equal to the percentage of the contract work of the LBE partner in the joint venture shall be applied toward the contractor’s LBE requirement and the LBE goal of the contracting agency.

   (5) When an LBE contractor or subcontractor is used, it must perform the actual work and may not subcontract the work to another firm without agency approval. Credit may be denied to a prime contractor for an LBE subcontractor’s participation where an LBE does none of the actual subcontracted work.

   (6) The contracting agency shall transmit to the Division certification documents submitted to it within two business days after their receipt.

   (7) If at any time a contracting agency has reason to believe that a contractor or subcontractor has willfully and knowingly provided incorrect information or made false statements, it shall refer the matter to both its Inspector General and to the Division. Falsification of any document by a contractor or subcontractor may lead to the imposition of civil and criminal penalties as provided by law and contract, disqualification from the LBE program and debarment.

   (8) Each contracting agency shall submit quarterly reports, on or before the fifteenth day of January, April, July and October of each year to the Director describing activities undertaken during the previous quarter toward meeting the requirements of Administrative Code § 6-108.1 and these regulations. Quarterly reports of each contracting agency shall contain the following information:

      (i) The name and telephone number of the agency’s LBE liaison officer;

      (ii) A summary report including but not limited to:

         (A) the total number of contracts subject to LBE requirements which are registered during the quarter and during the fiscal year to date,

         (B) the total value of such contracts,

         (C) the total number and dollar value of LBE prime contracts registered,

         (D) the total number and dollar value of LBE subcontracts,

         (E) the total number and dollar value of contracts registered which are subject to MBE/WBE requirements;

      (iii) A list of LBEs receiving prime contracts or subcontracts including:

         (A) the nature of their work, and

         (B) the number and dollar value of prime contracts and subcontracts committed;

      (iv) A list of all contracts registered during the quarter including:

         (A) a description of each contract, its budget line and registration date,

         (B) the dollar amount of the contract,

         (C) whether the contract is subject to an MBE/WBE requirement,

         (D) the contractor awarded the contract,

         (E) whether the contract was awarded to an LBE or MBE/WBE,

         (F) whether any part of the contract was subcontracted, and

         (G) if the answer to (F) above, is yes, then: (a) the subcontractor’s name, (b) the subcontractor’s LBE or MBE/WBE status, (c) a description of each subcontract (i.e., type of work), (d) the dollar amount of each subcontract, and (e) waivers that have been granted during the quarter, if any;

      (v) The status of any default hearings or other actions the agency is taking with regard to failure of a contractor or LBE to comply with Administrative Code § 6-108.1 and these regulations; and

      (vi) A list of all prime contractors who have submitted letters of compliance during the quarter.

  1. Implementation – LBE prime contractor participation.

   (1) Contracting agencies shall identify all possible opportunities for LBE prime contractors. They shall divide projects wherever possible into work suitable for bidding by LBE contractors.

   (2) The contracting agency shall, on the basis of contract size, type of work, and LBE technical and capitalization capabilities, identify classes of contracts which are attractive for bidding by LBE prime contractors. The following procedures shall apply when the agency is letting such contracts:

      (i) The contracting agency shall notify LBEs in a timely fashion when suitable prime contracts will be bid;

      (ii) The contracting agency shall monitor the requests for bid documents and conduct further solicitation for LBE bidders, if LBEs have not requested the documents. The agency shall maintain a log of LBE solicitations;

      (iii) The contracting agency shall prepare upon request by the Division an analysis of the number of LBE bidders per project and the number of LBE low bidders.

   (3) Whenever possible, the contracting agency shall invite LBEs to bid on open market orders (OMOs).

   (4) Whenever a contracting agency seeks bidders for an OMO by mailing bid documents to the potential bidders the agency shall when needed:

      (i) telephone any LBEs to which the package has been sent to notify them of such fact; and

      (ii) contact LBEs which fail to respond to the request for bids.

   (5) Wherever an LBE which has not previously contracted with the agency is the low bidder, the contracting agency shall discuss insurance needs, contract requirements, references, and provide other appropriate assistance to the LBE.

  1. Implementation – LBE subcontractor participation.

   (1) The contracting agency shall design contracts to maximize opportunities for LBE subcontracting.

   (2) For each contract it bids, the contracting agency shall determine the percentage of work suitable for subcontracting.

   (3) Contract specifications shall identify which items of the contract, if any, are suitable for LBE subcontracting, and the estimated value of each such item.

   (4) Contracting agencies shall include in the Information to Bidders and the contract provisions for LBE subcontracting as set forth in 66 RCNY § 11-04(b) and (c).

   (5) When a contracting agency advertises a contract which contains items suitable for subcontracting, it shall apply the following procedures:

      (i) The agency shall prepare a bid notice, to be published in the City Record and sent to LBEs and business development organizations, indicating that the project contains items suitable for subcontracting;

      (ii) The agency may telephone LBEs in the appropriate work category to inform them that the bid notice has been sent and to recommend that they purchase or review the plans and specifications;

      (iii) The agency shall post, at the location where bid materials are available, all bid notices currently advertised. Such bid notices shall include a list of items suitable for performance by subcontractors and their estimated value;

      (iv) The agency shall supply with all bid documents a list of certified LBEs;

      (v) Upon request, the agency shall provide LBEs a list of names, addresses and telephone numbers of prime contractors who pick up bid documents for projects containing items suitable for subcontracting;

      (vi) The agency shall emphasize the LBE program in its agenda for pre-bid and pre-construction conferences.

  1. Requirements for contract award. No construction contract subject to LBE requirements shall be awarded unless and until the following requirements have been complied with in their entirety:

   (1) If any portion of the contract is subcontracted, not less than ten percent of the total dollar amount of the contract shall be awarded to LBEs, except where less than ten percent of the total dollar amount is subcontracted, such lesser percentage shall be so awarded.

   (2) No contractor shall require performance and payment bonds from LBE sub- contractors.

   (3) The bidder shall identify in the bid proposal:

      (i) the percentage, dollar amount and type of work to be subcontracted; and

      (ii) the percentage, dollar amount and type of work to be subcontracted to LBEs.

   (4) Within 10 calendar days after notification of low bid, the apparent low bidder shall submit an “LBE Participation Schedule”. If such schedule does not identify enough LBE subcontractors to meet the requirements of Administrative Code § 6-108.1 the apparent low bidder shall also submit documentation of its good faith efforts to meet such requirements.

      (i) The “LBE Participation Schedule” shall include:

         (A) the name and address of each LBE that will be given a subcontract,

         (B) the percentage, dollar amount and type of work to be subcontracted to the LBE, and

         (C) the dates when the LBE subcontract work will commence and end.

      (ii) The following documents shall be attached to the “LBE Participation Schedule”:

         (A) verification letters from each subcontractor listed in the “LBE Participation Schedule” stating that the LBE will enter into a formal agreement for work,

         (B) certification documents of any proposed LBE subcontractor which is not on the LBE certified lists, and

         (C) copies of the certification letter of any proposed subcontractor which is an LBE.

      (iii) Documentation of good faith efforts to achieve the required LBE percentage shall include but not be limited to the following:

         (A) attendance at pre-bid meetings, when scheduled by the agency, to advise bidders of contract requirements;

         (B) advertisement where appropriate in general circulation media, trade association publications, and small business media for specific subcontracts that would be at least equal to the percentage goal for LBE utilization specified by the contractor;

         (C) notification to small, minority and woman contractor associations in writing, for solicitation of specific subcontracts;

         (D) written notification by certified mail to LBE firms that their interest in the contract is solicited;

         (E) demonstration of efforts made to select portions of the work proposed to be performed by LBE firms in order to increase the likelihood of achieving the stated goals;

         (F) documented efforts to negotiate with LBE firms for specific subcontracts including at a minimum: (a) The names, addresses and telephone numbers of LBE firms that were contacted; (b) A description of the information provided to LBE firms regarding the plans and specifications for portions of the work to be performed; (c) Documentation that no reasonable price can be obtained from LBE firms; (d) A statement of why agreements with LBE firms were not reached;

         (G) a statement of the reason for rejecting any LBE firm which the contractor deemed to be unqualified; and

         (H) documentation of efforts made to assist the LBE firms contacted that needed assistance in obtaining required insurance.

   (5) Failure of the apparent low bidder to provide the information required in 66 RCNY § 11-04(g)(3) and (g)(4) of this section within the allotted time may render the bid non-responsive and the contract may not be awarded to the bidder, except: If the contractor states that it will subcontract a specific portion of the work, but can demonstrate that despite good faith efforts it cannot achieve its required LBE percentage for subcontracted work until after award of contract, the contract may be awarded subject to a letter of compliance from the contractor stating that it will comply with Administrative Code § 6-108.1 and subject to approval by the agency head.

   (6) If the contractor has not met its required LBE percentage prior to award, the contractor shall demonstrate that a good faith effort has been made subsequent to award to obtain LBEs on each subcontract until it meets the required percentage.

   (7) If a contractor submits certification documents for a subcontractor it wishes to use towards its LBE required percentage, the contracting agency may not award the contract until the Division has notified it that such certification documents are complete. After the Division has notified the agency that the proposed subcontractor’s certification documents are complete, the contract may be awarded. However, no firm may be counted toward the contractor’s LBE obligation unless it has been certified as an LBE. The Division shall notify the prime contractor that the certification documents of its proposed subcontractor are complete and that its certification is pending and is subject to review. It shall inform the prime contractor that if the proposed subcontractor is denied certification, the prime contractor must propose another LBE.

   (8) If a contractor states prior to award that it will not subcontract work under the contract, the contractor may not subcontract any work without prior approval by the contracting agency. Such a contractor shall notify the agency at least six weeks prior to the start of work by any subcontractor that subcontracting is proposed. During such six-week period the contractor shall seek LBEs to do the work. No subcontracting by such a contractor shall be approved unless the required percentage of subcontracting work is awarded to an LBE, or unless the agency grants a waiver from such requirement upon a finding that a good faith effort has been made to find an LBE.

   (9) The contractor may not substitute or change any LBE which was identified prior to award of the contract without the permission of the agency head. The contractor shall make a written application to the contracting agency head for permission to make such substitution or change, explaining why the contractor needs to change its LBE subcontractor and how the contractor will meet its LBE subcontracting requirement. Copies of such application must be served on the originally identified LBE by certified mail return receipt requested as well as the proposed substitute LBE. The agency head shall determine whether or not to grant the contractor’s request for substitution.

   (10) If the contractor contends that the LBE requirement cannot be met either before or after contract award and can demonstrate a good faith effort to obtain an LBE, a waiver may be granted by the agency head upon approval by the Division.

  1. Subcontractor waivers.

   (1) Subject to approval by the Division, an agency head may waive the subcontracting requirements of Administrative Code § 6-108.1 and these regulations upon a finding that:

      (i) there is no identifiable LBE subcontractor reasonably available, willing and qualified to perform subcontracted work, provided that

         (A) the contractor has been unable to identify an LBE subcontractor after good faith efforts as set forth in 66 RCNY § 11-04(g)(4)(iii) and

         (B) the contracting agency has been unable to locate an LBE after a search of the LBE list; or

      (ii) the contract involves an emergency requiring immediate attention because the public health, safety, or welfare is threatened; or

      (iii) for other good cause. Such finding shall be made in writing, state the reasons therefore, and be submitted to the Division if a waiver is requested.

   (2) The Division may direct an agency head to submit further evidence concerning the necessity for a waiver.

   (3) Upon the approval of an agency head’s waiver decision, the Division shall send written notification of such waiver to the Vice Chairman of the City Council.

  1. Verification of contractor compliance. The contracting agency shall perform the following procedures with regard to auditing contractor compliance:

   (1) The LBE liaison officer described in 66 RCNY § 11-04(d)(2) shall distribute to the resident engineer a list of LBE subcontractors that have been identified by the prime contractor for use on the project. The resident engineer shall notify the LBE liaison officer of all subcontractors working on the site.

   (2) As the work progresses, the LBE liaison officer shall periodically telephone all LBEs identified by the prime contractor to verify that they are on the site and performing specified LBE work.

   (3) Each contracting agency shall conduct on-site reviews of the contractor’s compliance with the LBE requirements. Such review may include interviews, visits to the actual construction site, and an inspection of any records relevant to the contractor’s performance.

   (4) The contractor shall cooperate fully with these reviews. Failure or refusal to furnish information or to cooperate may be deemed a breach of contract and a violation of these regulations which may result in the imposition of sanctions as provided in 66 RCNY § 11-04(j).

   (5) The LBE liaison officer shall audit contractor payments to LBE subcontractors by obtaining payment compliance reports every month from both the contractor and the LBE subcontractor. The agency shall investigate all significant report variances.

   (6) The LBE liaison officer shall review total payments of prime contractors to LBE subcontractors to insure that the amount equals the LBE percentage required by the contract. If the sum of LBE subcontractor payments is less than the required amount, the contractor may be found in breach of contract and sanctions may be applied in an amount commensurate with the magnitude of noncompliance.

   (7) The LBE liaison officer shall maintain an LBE file for each project whether or not it is subject to LBE requirements. When the contracting agency determines that the program does not apply to a project or any part of it, the reasons for that decision shall be placed in the file.

   (8) After review of the contractor’s performance, the contracting agency shall make one of the following determinations with respect to the contractor’s compliance with the LBE requirements:

      (i) the contractor is in compliance; or

      (ii) there is reasonable cause to believe that the contractor is in noncompliance.

   (9) Whenever a contracting agency has reasonable cause to believe that a contractor is in noncompliance, it shall send a notice promptly by certified mail, return receipt requested, to the contractor describing the noncompliance and requiring the contractor to show cause within five days why it should not be found in noncompliance. If the agency determines that there is noncompliance, it shall offer the contractor a 15-day period from the date of notification of the determination an opportunity to conciliate.

      (i) If conciliation is successful, a conciliation agreement shall be signed by the agency and the contractor and filed with the Division.

      (ii) If conciliation is not successful, the agency shall determine whether sanctions should be imposed.

   (10) The contracting agency shall notify the Division of any determination of noncompliance and the imposition of any sanctions. The Division shall notify all other contracting agencies of the determination and the sanctions imposed.

  1. Sanctions.

   (1) When a contracting agency determines that a prime contractor has failed to comply with the requirements of Administrative Code § 6-108.1 or these regulations, the agency may impose any or all of the following sanctions:

      (i) Reducing of a contractor’s compensation by an amount equal to the dollar value of the LBE required percentage not complied with;

      (ii) Declaring the contractor in default.

   (2) In addition, where the prime contractor is an LBE, the agency shall refer the matter to the Division for further action including the review of the LBE’s continued eligibility for certification.

§ 11-05 Complaints.

(a) Any person who believes a violation of Administrative Code § 6-108.1 and these regulations has occurred may file a complaint, in writing, signed and dated, with the contracting agency when a contract is involved or, if no specific contract is involved, with OEFO.
  1. A prompt investigation shall be made by the contracting agency’s LBE liaison officer if the agency receives the complaint, or by the Division if it receives the complaint.
  2. Any complaint alleging fraud, or other criminal behavior, concerning the requirements of Administrative Code § 6-108.1 and these regulations on the part of a contractor or subcontractor shall be referred by the contracting agency or the Division to their respective Inspector Generals.
  3. The contractor or subcontractor involved shall cooperate fully with any investigation. Failure or refusal to furnish information or to cooperate in the investigation is a violation of Administrative Code § 6-108.1 and these regulations and may result in the imposition of sanctions as provided in 66 RCNY § 11-04(j).
  4. Upon completion of the investigation, the complaining party and the contractor or subcontractor involved shall be informed of the results of the investigation in writing. If the contracting agency or the Division has reasonable cause to believe that the contractor or subcontractor is in noncompliance with Administrative Code § 6-108.1 or these regulations, then the procedures set forth in 66 RCNY § 11-04(i)(9) and (10) shall be commenced.
  5. No contractor, subcontractor, or other person shall intimidate, threaten, coerce, or discriminate against any individual or business for the purpose of interfering with any right or privilege secured by Administrative Code § 6-108.1 and these regulations or because a complaint was filed, or a person testified, assisted or participated in any manner in an investigation, proceeding, or hearing under these regulations.
  6. The identity of the complaining party shall be kept confidential only on request. If such confidentiality hinders the investigation, the complaining party shall be so advised for the purpose of obtaining a waiver of confidentiality. The complaining party shall be further advised that failure to waive confidentiality may result in a determination based upon information already provided.

§ 11-06 Responsibilities of the Division of Economic and Financial Opportunity.

Implementation.

  1. The Division shall enforce and audit the compliance with and the administration of Administrative Code § 6-108.1 and these rules and regulations.
  2. The Division may amend these rules and regulations when necessary to ensure the implementation of Administrative Code § 6-108.1.
  3. The Division shall develop such forms and documents as may be necessary for the administration of Administrative Code § 6-108.1 and these regulations.
  4. The Division shall adjust as necessary the lower-level “urban family budget” for the City, as most recently defined by the U.S. Department of Labor, Bureau of Labor Statistics by reflecting the variation in the “Urban Wage Earners and Clerical Workers Consumer Price Index.”
  5. The Division shall submit on or before April 1 of each year an annual report to the City Council, concerning the administration of the program.

§ 11-07 Separability and Applicability.

(a) Separability. If any provision of these regulations, or the application thereof is held invalid, the remainder of these rules and regulations, and the application thereof to other persons or circumstances shall not be affected by such holding and shall remain in full force and effect.
  1. Contracts covered. All contracts being advertised on or after the effective date of these regulations must comply therewith.

APPENDIX A: ECONOMIC DEVELOPMENT AREAS

The following are eligible Community Development areas:

ManhattanInwood – Census Tracts 291, 293, excluding 289, 295, 301, 303, 307 North Washington Heights – Census Tracts 269, 271, 277, 279, 285, excluding 267, 273, 275, 281, 283, 287 South Washington Heights – Census Tracts 239, 241, 243.01, 245, 247, 249, 251, 253, 255, 261, 263, 265 Hamilton Heights – Census Tracts 231.01, 233, 235.01, 237 Polo Gardens – Census Tracts 235.02, 243.02 Harlem River Houses – Census Tracts 231.02, 234 excluding 236 Manhattanville – Census Tracts 213.01, 217.01, 219, 221.01, 223, 225, 227.01, 229 St. Nicholas – Census Tracts 213.02, 217.02, 221.02, 224, 226, 227.02, 228, 230, 232 Harlem River Drive – Census Tracts 210, 212, excluding 214 Morningside Heights – Census Tracts 197.01, 209.01, 211, excluding 199, 201.01, 203, 205, 207.01 West Harlem – Census Tracts 197.02, 201.02, 207.02, 209.02 Millbank-Frawley – Census Tracts 186, 190, 200, 216, 218, 220, 222 Upper West Side – Census Tracts 189, 193, 195, excluding 187, 191 West Side – Census Tracts 183, excluding 161, 163, 165, 167, 169, 171, 173, 175, 177, 179, 181, 185 Lincoln Square – Census Tracts 147, 151, excluding 145, 149, 153, 155, 157, 159 Clinton – Census Tracts 115, 117, 121, 127, 129, 133, 135, excluding 139 Chelsea – Census Tracts 83, 89, 99, 103, 111, excluding 81, 87, 91, 93, 97 Midtown – Census Tracts 84, 102, 109, 113, 119, 125, excluding 92, 94, 96, 100, 104, 131 Union-Herald – Census Tracts 56, 58, 76, 95, 101, excluding 52, 54, 74 Gramercy – Census Tracts 68, excluding 44, 48, 50, 60, 64, 66 East Village – Census Tracts 20, 24, 26.01, 26.02, 28, 32, 34, 38, 40, excluding 42 West Village – Census Tracts 53, 69, excluding 51, 55.01, 57, 59, 61, 63, 65, 67, 71, 73, 75, 77, 79 Soho/Noho/Tribeca – Census Tracts 55.02, excluding 33, 47, 49 Battery Park – Census Tracts 21, 39, 317, excluding 13 Lower Manhattan – Census Tracts 7, 9, 31, excluding 15.01, 15.02, 319 Chinatown-Little Italy – Census Tracts 27, 29, 41, 43, 45 Lower East Side – Census Tracts 12, 14.02, 16, 18, 22.01, 22.02, 30.01, 30.02, 36.01, 36.02, excluding 14.01 Two Bridges – Census Tracts 2.01, 2.02, 6, 8, 10.02, 25, excluding 10.01 Yorkville – Census Tracts 154, 156.01, 158.02, excluding 135, 138, 140, 142, 144.01, 144.02, 146.01, 148.01, 148.02, 150.01, 150.02, 152, 158.01, 160.01, 160.02 Lower East Harlem – Census Tracts 156.02, 162, 164, 166, 168, 170, 172.01, 172.02, 174.01, 174.02 Upper East Side – Census Tracts 178, 180, 182, 184, 188, 192, 194, 196, 198, 202, 204, 206, 208

BrooklynFort Hamilton-Dyker Beach – Census Tracts 164, excluding 154 Bush Terminal – Census Tract 018 Greenpoint Industrial Area – Census Tracts 465, 581, 483, 577, 579, excluding 455, 473, 589 Brighton Beach – Census Tracts 360.01, 360.02, 362, 366, 610.01, excluding 364, 610.02 Coney Island – Census Tract 325, 328, 330, 342, 348.01, 352, excluding 340 West Brighton – Census Tract 348.02, excluding 350, 354, 356 Sheepshead Bay – Census Tract 590, excluding 570, 572, 576, 578, 580, 586, 592, 594.01, 594.02, 596, 598, 600, 608, 626 Homecrest – Census Tract 582, excluding 370, 374, 388, 390, 392, 394, 396, 414.01, 414.02, 416, 418, 554, 556, 584, 588, 606 Gravesend – Census Tract 582, excluding 370, 374, 388, 390, 392, 394, 396, 414.01, 414.02, 416, 418, 554, 556, 584, 588, 606 Bath Beach – Census Tract 292, excluding 168, 174, 176, 280, 282, 286 Bensonhurst – Census Tracts 178, 276, excluding 170, 172, 180, 182, 184, 186, 188, 190, 256, 258, 260, 262, 264, 266, 268, 270, 274, 278, 284, 288, 290, 294, 296, 298, 300, 302, 304 Dyker Heights – Census Tract 120, excluding 128.01, 132, 140, 144, 146, 148, 150, 156, 158, 194, 196, 198, 200, 202, 204, 206, 208, 210, 212 Sunset Park – Census Tracts 002, 020, 022, 072, 074, 076, 078, 080, 082, 084, 088, 090, 092, 096, 098, 100, 101, 102, 106, 118, 122, 143, 145, 147, excluding 086, 104, 108 Red Hook – Census Tracts 055, 057, 059, 085 Columbia Street – Census Tracts 047, 051 Cobble Hill – Census Tract 049, excluding 045 Carroll Gardens – Census Tracts 075, 077, excluding 063, 065, 067 Gowanus – Census Tracts 069, 070, 117, 121, 123, 125, 127 Boerum Hill – Census Tracts 039, 041, 043 Park Slope – Census Tracts 129.01, 129.02, 131, 133, 135, 137, 139, 141, 149, 151, 159, 167, 173, excluding 153, 155, 157, 165, 169, 171, 502.01, 502.02 Ocean Parkway – Census Tract 486, excluding 460.01, 462.01, 480, 482, 484, 488, 490, 492, 494 Flatbush – Census Tracts 506, 508, 510, 516, 790, 792, 794, 796, 818, 820, 822, 824, 826, 828, excluding 460.02, 512, 514, 518, 520, 522, 524, 526, 528, 754, 766, 770, 772, 774, 786, 788 Starrett City – Census Tract 1058 North Canarsie – Census Tract 974, excluding 962, 968, 970 Farragut – Census Tract 942, excluding 780, 782, 830, 832, 834, 836, 838, 840, 842, 844, 846 Ramsen Village – Census Tract 888, excluding 928, 930, 934 North East Flatbush – Census Tracts 882, 884, 886, 890, 892 Wingate – Census Tract 874.01, 878, excluding 876, 880 Broadway Junction – Census Tracts 365.02, 367, 1138 Rugby – Census Tracts 814, 816, 860, 862, 866, 868, 870, excluding 848, 850, 852, 854, 856, 858, 864, 872, 938, 940 Lefferts Gardens – Census Tracts 327, 329, 800, 802, 804, 806, excluding 798, 810 Crown Heights – Census Tracts 213, 217, 219, 221, 223, 225, 307, 311, 317.02, 319, 321, 323, 325, 331, 333, 337, 339, 343, 347, 349, 351, 353, 355, 357, 359, excluding 335 Weeksville – Census Tracts 309, 345 Brower Park – Census Tracts 313, 315, 317.01, 341 Prospect Heights – Census Tracts 161, 163, 203, 205, 207, 215 Fulton Ferry – Census Tracts 021, 023 Downtown – Census Tracts 011, 025, 027, 033, 035, 037, excluding 013 Fort Greene – Census Tracts 029.01, 179, 181, 183, 185.01, 187, 191, 199, 201, 231, excluding 029.02, 031 Clinton – Census Tract 197, excluding 193, 195 Tompkins Park – Census Tracts 251, 263, 279 Stuyvesant Heights – Census Tracts 271.02, 273, 297 Southern Williamsburg – Census Tracts 237, 239, 507, 509, 529, 531, 533, 535, 537, 539, 545 South Side – Census Tracts 513, 523, 525, 527, 547, 549, 551 North Side – Census Tracts 515, 517, 519, 555, 557 Bedford Stuyvesant – Census Tracts 227, 229, 233, 235, 241, 243, 245, 247, 249, 253, 255, 257, 259.01, 259.02, 261, 265, 267, 269, 271.01, 275, 277, 281, 283, 285.01, 285.02, 287, 289, 291, 293, 295, 299, 381, 383, 385, 387 Greenpoint – Census Tracts 563, 575, excluding 499, 559, 565, 567, 569, 571, 573, 591, 593 Ridgewood – Census Tracts 429, 431, 441, 443, 445, 447 Bushwick – Census Tracts 389, 391, 393, 395, 397, 399, 401, 405, 409, 411, 413, 415, 417, 419, 421, 423, 425, 427, 433, 435, 437, 439, 453, 487 Ocean Hill – Census Tracts 301, 303, 361, 363, 365.01, 369, 371, 373, 375, 377, 379 North Williamsburg – Census Tracts 495, 497, 503, excluding 477, 501 Brownsville – Census Tracts 894, 896, 898, 900, 902, 904, 906, 908, 910, 912, 914, 918, 920 East New York – Census Tracts 1114, 1118, 1120, 1122, 1124, 1126, 1128, 1130, 1132, 1134, 1136, 1138, 1148, 1150, 1152, 1154, 1156, 1158, 1160, 1162, 1164, 1166, 1168, 1170, 1192, 1194 Highland Park – Census Tracts 1142.01, 1146, 1172.01, 1172.02, 1174, excluding 1142.02 City Line – Census Tracts 1188, 1190, 1196, 1200, 1208, 1210, excluding 1186, 1202 Fresh/Spring Creek – Census Tracts 1040, 1070, 1214, excluding 1220 New Lots – Census Tracts 982, 1100, 1102, 1110, 1172, excluding 1078, 1106 Cypress Hill – Census Tracts 1176.01, 1176.02, 1178, 1184, excluding 1182.01, 1182.02 Boro Park – Census Tracts 110, 112, 192, 218, 220, 222, 226, 228, 230, 232, 238, 240, 472, 478, excluding 114, 116, 214, 216, 224, 234, 236, 242, 470, 474, 476 Central Williamsburg – Census Tracts 489, 491, 493, 505, 511

Queens South Jamaica – Census Tracts 182, 184.01, 184.02, 186, 188, 190, 192, 272, 274, 276, 278, 284, 288, 788, 790, excluding 792 Springfield Gardens North – Census Tracts 330, 768, excluding 292, 334.02 Springfield Gardens South – Census Tracts 766, excluding 304, 320 Hollis – Census Tracts 500, 502.01, 508, excluding 482, 484, 502.02, 510 St. Albans – Census Tracts 334.01, 352, 398, 404, 504, 522, 524, 526, 528, excluding 280, 282, 366, 368, 376, 384, 394, 400, 402, 420, 422, 424, 426, 432, 506, 518, 520, 530, 532 Breezy Point and Roxbury – Census Tracts 916.02, excluding 916.01, 918 Rockaway Park/Seaside – Census Tract 942.01, excluding 938 Hammels – Census Tract 942.02, excluding 942.03 Arverne-Edgemere – Census Tract 952, excluding 962, 964, 972, 992 Far Rockaway – Census Tract 1032, excluding 998, 1010 Broad Channel – Census Tract 1072.01, excluding 1072.02 Forest Hills – Census Tract 725, excluding 645, 707, 709, 711, 713.01, 719, 727, 729, 731, 733, 735, 737, 739, 741, 743, 745, 747, 757, 769.01, 769.02, 771 Ridgewood – Census Tracts 545, 553, 559, 589, excluding 539, 547, 549, 551, 555, 557, 581, 583, 585, 587, 591, 593, 595, 603, 613 Flushing – Census Tracts 867, 871, 875, excluding 797, 845, 851, 853, 855, 865, 889, 907, 1161 Corona – Census Tracts 411, 413, 415, 427, 439, excluding 437, 443, 455 North Corona – Census Tracts 375, 377, 379, 401, 403, 405, 407, 409, excluding 381 East Elmhurst – Census Tracts 353, 361, 365, 369, 373, excluding 355, 363, 367, 371 Jackson Heights – Census Tracts 273, 275, 277, 279, 281, 283, 285, 287, 289, 291, 309.02, 327, 329, 337, 339, 347, 351 Maspeth – Census Tracts 535, excluding 205.01, 205.02, 219, 229, 243, 489, 493.01, 493.02, 495, 497, 511, 513, 515, 517, 521, 525, 527, 529, 599, 601, 667 Sunnyside – Census Tracts 179, 197, 235, excluding 169, 171, 181, 183, 185, 187, 189, 191, 253 Hunter’s Point – Census Tract 019, excluding 001, 007 Queens Village – Census Tracts 516, 540, excluding 496, 512, 536, 538, 542, 548, 552, 554, 556, 558, 560, 562, 564, 566, 568, 578, 580, 588 Jamaica Hills – Census Tracts 446.02, excluding 448, 450, 452, 454, 456 Briarwood – Census Tracts 236, 238, excluding 214, 220.01, 220.02, 230, 779.05 Richmond Hill – Census Tracts 142.01, 142.02, 152, excluding 024, 026, 028, 098, 108, 110, 118, 120, 122, 124, 126.01, 126.02, 128, 130, 132, 144, 148, 150, 154, 156 South Ozone Park – Census Tracts 158, 174, 178, 180, 814, 818, excluding 094, 096, 100, 102, 104, 106, 164, 166, 168, 170, 172, 176, 838, 840, 846.01, 846.02, 864 Ozone Park – Census Tract 050, excluding 032, 034, 036, 038, 040.01, 040.02, 042, 044.01, 052, 054, 058, 086, 088, 112, 114, 116, 878 Lindenwood – Census Tract 044.02, excluding 062 Jamaica – Census Tracts 194.01, 194.02, 196, 198, 202, 204, 206, 208, 212, 240, 244, 246, 248, 250, 252, 258, 260, 262, 264, 266, 270, 410, 414, 440, 442, 460, excluding 434, 446.01, 462, 468, 470, 480 Woodside – Census Tracts 163, 297, excluding 245, 247, 249, 251, 255, 257, 259, 261, 263, 293, 295, 299 Astoria – Long Island City – Census Tracts 025, 029, 035, 043, 055, 079, 081, 087, 141, 155, 157, 161, excluding 027, 031, 037, 041, 045, 047, 049, 051, 053, 057, 059, 061, 063, 065, 069, 071, 073, 075, 077, 083, 091, 143, 145, 147, 149, 151, 153, 159 Laurelton – Census Tracts 328, 358, excluding 616.01, 618, 620, 624, 626, 630, 632, 646, 650, 682

Bronx Bathgate – Census Tracts 165, 167, 375.01, 377, 385 Baychester, Historic Village of – Census Tract 302 Bedford Park – Census Tracts 403.01, 403.02, 405, excluding 407.01, 407.02, 411, 413, 415 Belmont – Census Tracts 387, 389, 391, 393, 397 Bronxdale – Census Tracts 336, 338, 340, excluding 324, 328, 330, 332 Bronx River – Census Tracts 062, 064, 066, 214, 054, 056, excluding 058 Castle Hill – Census Tracts 086, 088, excluding 074, 084, 102 Claremont – Census Tracts 145, 147, 169 Concourse Village – Census Tracts 059.02, excluding 061 East Concourse – Census Tracts 173, 175, 177, 179, 181, 183 East Tremont – Census Tracts 359, 361, 363, 365.01, 365.02, 367, 369.01, 369.02, 371, 373, 375.02, 375.03 Fordham – Census Tracts 237.01, 237.02, 239, 383, 399.01, 399.02, 401 Highbridge – Census Tracts 189, 193, 199, 201, 211, 213.02, 219 Hunt’s Point – Census Tracts 089, 099, 115.01, 115.02, 119, 121.01, 121.02, 123, 125, 127.01, 127.02, 129.02, 153, 155, 157, 161, excluding 081, 091, 097, 105 Jerome Park – Census Tract 273, excluding 267, 277, 279, 281, 409 Kingsbridge Heights – Census Tracts 263, 265, excluding 261, 269, 271.02 Longwood – Census Tracts 083, 085, 087, 129.01, 131 Melrose – Census Tracts 065, 067, 069, 139, 141, 143 Morris Heights – Census Tracts 205, 213.01, 215.01, 215.02, 217.01, 243, 245 Morrisania – Census Tracts 135, 149, 151 Mott Haven – Census Tracts 023, 025, 027.01, 027.02, 031, 033, 035, 037, 039, 041, 043, 047, 049, 071, 073, 075, 077, 079 Mount Eden – Census Tracts 225, 227.03, 229.02, excluding 171 Mount Hope – Census Tracts 227.01, 229.01, 231, 233.01, 233.02, 235.01, 235.02, 241, 379, 381 Norwood – Census Tract 431, excluding 419, 421, 423, 425, 429.01, 429.02 Olinville – Census Tracts 374, 376, excluding 370, 372 Park Stratton – Census Tract 218, excluding 216.01 Port Morris – Census Tracts 011, 015, 017 Parkchester – Census Tract 206.02, excluding 208, 210, 212, 216.02 Soundview – Census Tracts 016, 020, 036, 038, 046, excluding 024, 028, 040.02 Soundview/Bruckner – Census Tracts 044, 048, 050, 052, 068, 070, excluding 040.01, 072 Throgs Neck – Census Tracts 110, 144, excluding 130, 132, 154, 156, 158, 162, 164, 166 University Heights – Census Tracts 247, 251, 253, 255, 257, excluding 249 Van Nest – Census Tracts 230, 242, excluding 232, 234, 236, 240 Wakefield – Census Tract 446, excluding 410, 414, 418, 428, 430, 432, 436, 438, 440, 442 West Concourse – Census Tracts 057, 059.01, 195, 197, 217.02, 221, 223, 227.02, excluding 187 West Farms – Census Tracts 060, 220 Williamsbridge – Census Tracts 390, 406, excluding 368, 378, 380, 382, 388, 392, 394, 396, 398, 404, 408, 420, 422, 424 Woodstock – Census Tracts 133, 137

Staten Island Arlington – Census Tract 319.02 Clifton/Fox Hills – Census Tract 40 New Brighton – Census Tract 77, excluding 81 Port Richmond – Census Tract 207, excluding 213, 219, 247 St. George – Census Tracts 7, 11, excluding 3, 9 Stapleton – Census Tracts 15, 21, 27, 29 West Brighton/Bodine Creek – Census Tracts 133.01, 133.02, excluding 65, 105, 121, 125, 141 Posebank/Arrochar – Census Tract 74, excluding 8, 20.01, 20.02, 36

APPENDIX B: MAPS OF ECONOMIC DEVELOPMENT AREA

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Manhattan Economic Development 1 of 5

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Manhattan Economic Development 2 of 5

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Manhattan Economic Development 3 of 5

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Manhattan Economic Development 4 of 5

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Manhattan Economic Development 5 of 5

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Brooklyn Economic Development 1 of 11

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Brooklyn Economic Development 2 of 11

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Brooklyn Economic Development 3 of 11

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Brooklyn Economic Development 4 of 11

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Brooklyn Economic Development 5 of 11

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Brooklyn Economic Development 6 of 11

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Brooklyn Economic Development 7 of 11

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Brooklyn Economic Development 8 of 11

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Brooklyn Economic Development 9 of 11

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Brooklyn Economic Development 10 of 11

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Brooklyn Economic Development 11 of 11

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Queens Economic Development 1 of 17

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Queens Economic Development 2 of 17

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Queens Economic Development 3 of 17

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Queens Economic Development 4 of 17

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Queens Economic Development 5 of 17

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Queens Economic Development 6 of 17

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Queens Economic Development 7 of 17

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Queens Economic Development 8 of 17

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Queens Economic Development 9 of 17

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Queens Economic Development 10 of 17

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Queens Economic Development 11 of 17

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Queens Economic Development 12 of 17

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Queens Economic Development 13 of 17

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Queens Economic Development 14 of 17

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Queens Economic Development 15 of 17

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Queens Economic Development 16 of 17

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Queens Economic Development 17 of 17

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Bronx Economic Development 1 of 8

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Bronx Economic Development 2 of 8

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Bronx Economic Development 3 of 8

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Bronx Economic Development 4 of 8

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Bronx Economic Development 5 of 8

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Bronx Economic Development 6 of 8

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Bronx Economic Development 7 of 8

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Bronx Economic Development 8 of 8

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Staten Island 1 of 9

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Staten Island 2 of 9

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Staten Island 3 of 9

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Staten Island 4 of 9

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Staten Island 5 of 9

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Staten Island 6 of 9

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Staten Island 7 of 9

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Staten Island 8 of 9

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Staten Island 9 of 9

APPENDIX C: 1989 LOWER LIVING STANDARD INCOME LEVEL TABLE

Effective: May 4, 1989

a   Effective July 1, 1989, Tompkins will merge with Broome-Tioga to form the Broome-Tioga-Tompkins SDA. Until June 30, 1989, Tompkins must use the non-metro area income guidelines. As of July 1, 1989, the metro income guidelines are to be used by Tompkins intake staff.

1989 POVERTY INCOME GUIDELINES  
Size of Family Unit Poverty Guidelines
1 $5,980
2 $8,020
3 $10,060
4 $12,100
5 $14,140
6 $16,180
7 $18,220
8 $20,260

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For family units with more than 8 members, add $2,040 for each additional member.

Effective Date: February 16, 1989

Subchapter B: Minority- and Women-owned Business Enterprise Certification Program

§ 11-21 Definitions.

As used in this subchapter, the following terms have the following meanings:

Applicant. “Applicant” means a business enterprise which has applied for certification as an MBE and/or WBE.

Audit. “Audit” means an examination of a business enterprise to determine whether the business enterprise is eligible for certification as an MBE and/or WBE, and may include an examination of books, records, physical facilities and interviews of applicants.

Business enterprise. “Business enterprise” means any entity, including a sole proprietorship, partnership or corporation which is authorized to and engages in lawful business transactions in accordance with the laws of New York State.

Certified business. “Certified business” means a business enterprise which has been approved for certification as an MBE and/or WBE in accordance with the procedures set forth in 66 RCNY § 11-22, subsequent to verification that the business enterprise is owned, operated, and controlled by minority group members as defined in 66 RCNY § 11-21, or women.

Certification director. “Certification director” means the director of the minority- and women-owned business enterprise program or his or her designee or his or her successor in function.

Certification letter. “Certification letter” means the letter sent by DSBS to an applicant notifying it of its certification as an MBE and/or WBE.

City. “City” means the City of New York.

Commissioner. “Commissioner” means the Commissioner of the New York City Department of Small Business Services or his or her designee or his or her successor in function.

Day. “Day” means a calendar day unless otherwise specified.

Denial or denied. “Denial” or “denied” means a determination by DSBS that a business enterprise is not eligible for certification as an MBE and/or WBE because it does not meet the criteria for certification.

Division. “Division” means the division of economic and financial opportunity within the department of small business services.

DSBS. “DSBS” means the New York City Department of Small Business Services or its successor in function.

Geographic Market. “Geographic market” of the City means the following counties: Bronx, Kings, New York, Queens, Richmond, Nassau, Putnam, Rockland, Suffolk and Westchester within the State of New York; and Bergen, Hudson, and Passaic within the State of New Jersey.

Graduate MBE and/or graduate WBE. “Graduate MBE” and/or “graduate WBE” means an MBE and/or WBE which has been awarded contracts by one or more agencies within the past three years where the total city funding from the expense and capital budgets for such contracts was equal to or greater than fifty million dollars and whose size has exceeded the size standards established for its industry by the United States small business administration for three years.

Minority group member. “Minority group member” means a United States citizen or permanent resident alien who is, and can demonstrate membership in, one of the following groups:

   (1) Black persons having origins in any of the Black African racial groups;

   (2) Hispanic persons of Mexican, Puerto Rican, Dominican, Cuban, Central or South American descent of either Indian or Hispanic origin, regardless of race; or

   (3) Asian and Pacific Islander persons having origins in any of the Far East countries, South East Asia, the Indian Subcontinent or the Pacific Islands.

Minority-owned business enterprise or MBE. “Minority-owned business enterprise” or “MBE” means a minority-owned business enterprise that is certified in accordance with § 1304 of the charter.

Minority- and women-owned business enterprise certification application or certification application. “Minority- and women-owned business enterprise certification application” or “certification application” means the form that DSBS requires an applicant to submit for purposes of applying for certification as an MBE and/or WBE.

Non-certified firm. “Non-certified firm” means a business enterprise that has not been certified as an MBE and/or WBE in accordance with § 1304 of the charter.

Principal office or place of business. “Principal office or place of business” means where the main office and regular meeting place of the board of directors that manages, conducts, and directs the business is located.

Rejected or rejection. “Rejected” or “rejection” means the refusal by DSBS to certify a business enterprise as an MBE and/or WBE due to an insufficiency in documentation submitted by the applicant.

Women-owned business enterprise or WBE. “Women-owned business enterprise” or “WBE” means a woman-owned business enterprise that is certified pursuant to § 1304 of the charter.

§ 11-22 Eligibility Criteria.

The following standards will be used to determine whether a business enterprise is eligible for certification as an MBE and/or WBE.

  1. Nexus. In order to be eligible for certification as an MBE and/or WBE, a business enterprise must have a real and substantial business presence in the geographic market for the city of New York. An MBE and/ or WBE which meets one of the following conditions will be deemed to have a real and substantial business presence in the geographic market for the city of New York:

   (1) the business enterprise’s principal office or place of business or headquarters is located within the City; or

   (2) the business enterprise maintains full-time employees in one or more of the business enterprise’s offices within the City to conduct or solicit business in the City the majority of their working time; or

   (3) the business enterprise’s principal office or place of business or headquarters is located within the geographic market of the City, and (i) has transacted business more than once in the City within the last three years, or (ii) has sought to transact business more than once in the City within the last three years; or

   (4) twenty-five percent (25%) of the business enterprise’s annual gross receipts for the last three years were derived from transacting business in the City; or

   (5) the business enterprise’s principal office or place of business or headquarters is not located within the geographic market of the City but the business enterprise has demonstrated two or more of the following indicia of a real and substantial presence in the market for the City of New York: (i) the business enterprise has maintained a bank account or engaged in other banking transactions in the City; (ii) the business enterprise, or at least one of its owners, possesses a license issued by an agency of the City to do business in the City; (iii) the business enterprise has transacted or sought to transact business in or with the City more than once in the past three years.

  1. Ownership. For the purposes of determining whether an applicant should be certified as an MBE and/or WBE, or whether such certification should be revoked, the following rules concerning ownership will be applied:

   (1) The equity interest of minority group member(s) and/or women owners must be proportionate to the contribution of the minority group member(s) and/or women owners as demonstrated by, but not limited to, contributions of money, property, equipment or expertise;

   (2) A sole proprietorship must be owned by a minority group member and/or woman;

   (3) A partnership must demonstrate that minority group members and/or women have a fifty-one (51%) percent or greater share of the partnership; and

   (4) A corporation must have issued at least fifty-one (51%) percent of its issued and authorized voting and all other stock to minority group members and/or women shareholders.

  1. Control. Determinations as to whether minority group members and/or women control the business enterprise will be made according to the following criteria:

   (1) Decisions pertaining to the operations of the business enterprise must be made by minority group members and/or women claiming ownership of that business enterprise. The following will be considered in determining whether the minority group members and/or women are making such decisions:

      (i) whether minority group members and/or women have experience and technical competence in the business enterprise seeking certification;

      (ii) whether minority group members and/or women demonstrate the working knowledge and ability needed to operate the business enterprise; and

      (iii) whether minority group members and/or women show that they devote time on an ongoing basis to the daily operation of the business enterprise.

   (2) Articles of incorporation, corporate by-laws, partnership agreements, business certificates, corporate tax returns, unincorporated business tax returns, partnership tax returns and other agreements, including, but not limited to, loan agreements, lease agreements, supply agreements, credit agreements or other agreements must permit minority group members and/or women who claim ownership of the business enterprise to make those decisions pertaining to operations of the business enterprise without restrictions.

   (3) Minority group members and/or women must demonstrate control of negotiations, signature authority for payroll, leases, letters of credit, insurance bonds, banking services and contracts, and other business transactions through production of relevant documents.

  1. Additional eligibility provisions. The following provisions apply to all applicants seeking certification as an MBE and/or WBE:

   (1) Documentation may be required to substantiate the claim of membership in a minority group. This documentation may include, but is not limited to, birth certificates, foreign passports, naturalization papers, registration on Native American tribal rolls and nonresident visas;

   (2) Where the actual management of the business enterprise is contracted out to individuals other than minority group members and/or women, minority group members and/or women must demonstrate that they have the ultimate power to hire and fire these managers, that they exercise this power and make other substantial decisions which reflect control of the business enterprise;

   (3) Documentation of one (1) year’s business activity will be required in order to provide sufficient information upon which certification can be reasonably made. The commissioner, in his or her discretion, may permit documentation for a lesser period;

   (4) Any business enterprise that satisfies the eligibility criteria as set forth in 66 RCNY § 11-22, is presumptively eligible for certification as an MBE and/or WBE under these rules; provided that the commissioner may decline to certify, or revoke the certification of, any business enterprise on the ground that there is not a firm basis for believing that there is a compelling state interest to justify certification of that business enterprise under these rules.

  1. Graduate MBE and/or WBE determinations. The division will, upon reviewing applications for certification and recertification, determine whether a business enterprise qualifies as a graduate MBE and/or WBE. The division will make such determinations in accordance with the following procedures:

   (1) In the event that the division determines a business enterprise seeking new certification as an MBE and/or WBE qualifies as a graduate MBE and/or WBE pursuant to 66 RCNY § 11-21, the division will provide a written notice of such determination to the applicant business enterprise stating the reason(s) for such determination and the procedures for challenging the graduate MBE and/or WBE determination.

   (2) In the event that the division determines a certified MBE and/or WBE qualifies as a graduate MBE and/or WBE pursuant to 66 RCNY § 11-21, the division will provide a written notice of such determination to the business enterprise seeking recertification setting forth the reason(s) for such determination and the procedures for challenging the graduate MBE and/or WBE determination.

   (3) In the event that the division determines a business enterprise seeking new certification or a certified MBE and/or WBE to be a graduate MBE and/or WBE pursuant to 66 RCNY § 11-21, the business enterprise may challenge such a determination pursuant to the procedures set forth in 66 RCNY §§ 11-24 and 11-25.

   (4) In the event that the division has determined a business enterprise to be a graduate MBE and/or WBE, and the business enterprise has not made a timely challenge to that determination, or has made such a challenge and the department has affirmed its determination, the business enterprise may not apply to have the designation lifted for at least two years from the date of the original determination notice. The division will lift the designation if the firm demonstrates that (i) it has not been awarded contracts by one or more agencies within the past three years where the total city funding from the expense and capital budgets for such contracts was equal to or greater than fifty million dollars; and (ii) it has been below the size standards established by the United States small business administration for its industry for a period of two years or more.

  1. Certification as both an MBE and a WBE. In order to be certified as both an MBE and a WBE, a business enterprise must show that the ownership standard described in subdivision b of this section and the control standard described in subdivision c of this section are met by women who are minority group members.

§ 11-23 Application Intake and Verification.

(a) Minority- and/or women-owned business enterprise certification applications may be obtained from, and must be returned to DSBS or may be submitted electronically, to the extent an online application process is available. DSBS will record the date that each application is received.
  1. An applicant must submit such information or documentation as may be required by DSBS in connection with its certification as an MBE and/or WBE. Failure to submit such information or documentation may result in the rejection or revocation of such certification.
  2. If a certification application is received by DSBS and required documents are missing, questions are unanswered or the certification application is not properly signed, DSBS will send to the applicant, within 45 days of the date the application was received by DSBS, a notice of status and deficiency (the “Notice”), stating any deficiency arising from missing documents, unfinished questions or deficiencies in signature. An applicant may cure the noticed deficiency by providing DSBS with documents or information requested in the Notice, within 30 days of the date of the Notice.
  3. When the applicant cures a noticed deficiency, pursuant to procedures set forth in 66 RCNY § 11-23(c), DSBS will have an additional forty-five (45) days to advise the applicant of any further deficiency which may be cured in accordance with 66 RCNY § 11-23(c).
  4. If the applicant does not cure a noticed deficiency, pursuant to procedures set forth in 66 RCNY § 11-23(c), and the certification application remains incomplete for at least forty-two (42) days of the date of the Notice, unless such time is extended by the certification director, the applicant must be sent a notice stating that its certification application has been rejected and will not be processed, together with its rejected certification application.
  5. An applicant whose certification as an MBE and/or WBE is rejected may not reapply for certification for at least one hundred twenty (120) days of the date of the notice of rejection of its application.
  6. Applicants may be required to consent to inquiries of their bonding companies, banking institutions, credit agencies, contractors, affiliates, clients and other entities to ascertain the applicant’s eligibility for certification. Refusal to permit such inquiries will be grounds for rejection of a certification application.
  7. All applicants and certified businesses will be subject to an audit at any time. An applicant’s or certified business’ refusal to facilitate an audit will be grounds for denial of its certification application or revocation of its certification.
  8. A certification application may be withdrawn by an applicant without prejudice at any time prior to an audit. Following the withdrawal of a certification application, the applicant may not reapply for certification for a period of at least one hundred twenty (120) days from the date of withdrawal of the application.
  9. All applicants and certified businesses may be required to provide documentation to substantiate that the business has the skill and expertise to perform in the particular area of work for which it is requesting listing or is listed on the M/WBE Directory.
  10. The division will conduct site visits for at least 5% of all MBE and/or WBE certification applications received during a fiscal year to verify that such business enterprises are eligible for certification under these rules.

§ 11-24 Notice of Determination and Right to Appeal.

(a) The certification director will provide the applicant with written notice of a determination approving or denying certification.
  1. In the event certification is approved by the certification director, the applicant must be sent a certification letter and will be certified as an MBE and/or WBE for five years from the date of the certification letter or until notified of the need to reapply at the certification director’s request, whichever is earlier, so long as the applicant submits to the division an affidavit of no material change in ownership or control annually.
  2. In the event certification is denied by the certification director, a written notice of such determination will be provided to the applicant stating the reason(s) for such denial. Such notice will also state the procedures for filing an appeal.
  3. The applicant may appeal the determination within thirty (30) days after the date of the notice denying the business enterprise’s certification. In the event that a request for an appeal is not made within the thirty (30) day period, the certification director’s determination will be deemed final and the applicant may not reapply for certification for two (2) years from the date of the written notice denying certification, provided, however, that if the facts and circumstances forming the basis of the denial decision have changed significantly, the applicant, at the discretion of the certification director, may be granted permission to reapply sooner.
  4. The request for an appeal must state the grounds upon which the denial of certification is being appealed.

§ 11-25 Appeals.

A business entity denied certification or re-certification as an MBE and/or WBE will be given written notice by DSBS of the grounds for such denial and an opportunity to appeal such denial in writing to the commissioner. Such appeal or a request for an extension to file an appeal must be received by the commissioner no later than sixty (60) days after the date of the notice denying the business enterprise’s certification or re-certification. The commissioner may extend the period in which to initiate an appeal for good cause shown. Such appeal must include, at a minimum, a description of the reasons why the decision to deny certification or re-certification is in error and provide evidence to support the appeal. Such business entity must provide such other documentation or information as is requested by the commissioner, in his or her sole discretion. The commissioner will render a written determination no later than one hundred twenty (120) days after receipt of the appeal, unless the time to render a determination has been extended upon agreement of the commissioner and the business enterprise. If the commissioner’s determination is not made within the prescribed one hundred twenty (120) days after receipt of the appeal or within the agreed upon extended time period, then the appeal is deemed denied. The decision of the commissioner granting or denying such appeal will constitute the final agency determination.

§ 11-26 Revocation of Minority- or Women-Owned Business Enterprise Status.

(a)  A certified business must notify DSBS within forty-five (45) days of any material change in the information contained in the certification application. A material change may include, but is not limited to, a change in any of the following: ownership; address; officers; services provided by the certified business; market sector in which the business enterprise operates, bonding capacity of the business enterprise; and the union affiliation(s), if any, of the business enterprise. If a material change occurs, a review may be conducted by DSBS and certification may be revoked. If an MBE's and/or WBE's certification is revoked, such business enterprise may reapply for certification at any time following revocation. If a certified business fails to notify the certification director of such material change, the certification director may in his or her discretion, revoke the certification of an MBE and/or WBE for a period of up to five years.
  1. DSBS, upon having reason to believe or upon receiving allegations indicating that a certified business enterprise is not eligible for certification as an MBE and/or WBE, may meet with minority group members and/or women claiming ownership and control of the certified business and/or conduct an audit of such business enterprise, and will take the following actions:

   (1) Determine whether the allegation can be substantiated;

   (2) Obtain in writing, if possible, the basis of any allegation from the person or persons making the allegation;

   (3) Notify a certified business in writing that its certification as an MBE and/or WBE is under review by the certification director and may be revoked. This notice will specify the bases for such review and any facts specifically at issue; and

   (4) Provide the certified business with an opportunity to respond in writing to any allegations set forth in any notices questioning the certification status of a certified business, within twenty-eight (28) days of the date of such notice, by personal service or certified mail, return receipt requested.

  1. If the minority group members or women claiming ownership of the certified business fail to respond timely in writing to the notice of certification status review, or fail to meet with a DSBS representative or agree to an audit, the certification of the MBE and/or WBE may be revoked by the certification director.
  2. The certification director will notify, in writing, a certified business of the revocation of its certification as an MBE and/or WBE within fourteen (14) days of revoking such certification. The minority group members and/or women claiming ownership and control of a business enterprise which has had its certification as an MBE and/or WBE revoked, may request an appeal of this decision within thirty (30) days of the date of the notice of revocation. Such appeal must be conducted in accordance with procedures set forth in 66 RCNY § 11-25. If a request for an appeal is not made within the thirty (30) day period, the certification director’s determination will be final and the business enterprise may not reapply for certification for two (2) years from the date of the notice of revocation provided, however, that if the facts and circumstances forming the basis of the revocation decision have changed significantly, the business enterprise may, at the discretion of the certification director, be granted permission to reapply sooner.
  3. If at any time DSBS has reason to believe that an applicant or certified business has willfully and knowingly provided incorrect information or made false statements, it will refer the matter to the Department of Investigation for investigation. Falsification of any document by an applicant or a certified business may lead to the imposition of civil and criminal penalties as provided by law and contract, revocation of certification as an MBE and/or WBE and debarment from City contracts.

§ 11-27 Certification Criteria and Procedures for Firms Certified as Minority- and/or Women-Owned Business Enterprises by Other Governmental Entities.

(a) DSBS may grant MBE and/or WBE certification status to eligible firms certified as minority owned businesses and/or women owned businesses by other governmental entities in accordance with the criteria and procedures contained in this section.
  1. Eligibility. Firms certified as minority owned businesses and/or women owned businesses by other governmental entities must satisfy the following eligibility requirements to be recognized by the division as certified MBEs and/or WBEs by the city of New York:

   (1) The business enterprise must be eligible under 66 RCNY § 11-22; and

   (2) The business enterprise must be (i) certified as an MBE and/or WBE by the New York State Department of Economic Development, Division of Minority and Women’s Business Development pursuant to Article 15-A of the New York State Executive Law and any rules or regulations promulgated thereunder; or

      (ii) The business enterprise must be certified as an MBE and/or WBE by another governmental entity whose minority- and women-owned business enterprise whose certification criteria the commissioner has determined to be consistent with the certification criteria set forth in these rules and must be able to submit documentation evidencing such certification;

   (3) The business enterprise must submit the appropriate application(s), form(s) and/or similar document(s) identified by the DSBS for certification pursuant to this section. Failure to submit such information or documentation may result in the rejection of such certification; and

   (4) The business enterprise must submit such information or documentation as may be required by DSBS in connection with its certification as an MBE and/or WBE pursuant to this section. Failure to submit such information or documentation may result in the rejection of such certification.

  1. Certification period. Unless the commissioner determines otherwise, the maximum period for which any certification granted by DSBS pursuant to this subdivision is valid will be the period during which the business enterprise is certified as an MBE and/or WBE with the original certifying entity.

Subchapter C: Participation by Minority-owned and Women-owned Business Enterprises in Procurements of the City of New York [Repealed]

Subchapter D: Participation by Minority-owned and Women-owned Business Enterprises in City Procurement

§ 11-60 Definitions.

As used in this subchapter, the following terms have the following meanings:

  1. “Agency” means a city, county, borough, or other office, position, administration, department, division, bureau, board or commission, or a corporation, institution or agency of government, the expenses of which are paid in whole or in part from the city treasury.
  2. “Agency chief contracting officer” means the individual to whom an agency head has delegated authority to organize and supervise the agency’s procurement activity.
  3. “Availability rate” means the percentage of business enterprises within an industry classification that are owned by minorities, women or individuals who are socially and economically disadvantaged willing and able to perform agency contracts.
  4. “Bidder” means any person submitting a bid or proposal in response to a solicitation for such bid or proposal from an agency.
  5. “Bidders list” or “proposers list” means a list maintained by an agency that includes persons from whom bids or proposals can be solicited.
  6. “City” means the city of New York.
  7. “City chief procurement officer” means the individual to whom the mayor has delegated authority to coordinate and oversee the procurement activity of mayoral agency staff, including the agency chief contracting officers and any offices that have oversight responsibility for procurement.
  8. “Commercially useful function” means a real and actual service that is a distinct and verifiable element of the work called for in a contract. In determining whether an MBE, WBE or EBE is performing a commercially useful function, factors including but not limited to the following will be considered:

   (a) whether it has the skill and expertise to perform the work for which it is being utilized, and possesses all necessary licenses;

   (b) whether it is in the business of performing, managing or supervising the work for which it has been certified and is being utilized; and

   (c) whether it purchases goods and/or services from another business and whether its participation in the contract would have the principal effect of allowing it to act as a middle person or broker in which case it may not be considered to be performing a commercially useful function for purposes of this section.

  1. “Commissioner” means the commissioner of small business services or his or her designee or his or her successor in function.
  2. “Construction” means construction, reconstruction, demolition, excavation, renovation, alteration, improvement, rehabilitation, or repair of any building, facility, physical structure of any kind.
  3. “Contract” means any agreement, purchase order or other instrument whereby the city is committed to expend or does expend funds in return for goods, professional services, standard services, or construction.
  4. “Contractor” means a person who has been awarded a contract by a city agency.
  5. “Direct subcontractor” means a person who has entered into an agreement with a contractor to provide services or perform work required pursuant to a contract with a city agency.
  6. “Director” means an individual designated by the mayor to perform the oversight functions of the director described in this title who either reports directly to the mayor or is a commissioner.
  7. “Directory” means a list prepared by the division of firms certified pursuant to § 1304 of the charter.
  8. “Division” means the division of economic and financial opportunity within the department of small business services.
  9. “EBE” means an emerging business enterprise certified in accordance with § 1304 of the charter.
  10. “Geographic market of the city” means the following counties: Bronx, Kings, New York, Queens, Richmond, Nassau, Putnam, Rockland, Suffolk and Westchester within the state of New York; and Bergen, Hudson, and Passaic within the state of New Jersey.
  11. “Goal” means a numerical target.
  12. “Graduate MBE,” “graduate WBE” or “graduate EBE” means an MBE, WBE or EBE which must have been awarded contracts by one or more agencies within the past three years where the total city funding from the expense and capital budgets for such contracts was equal to or greater than fifty million dollars and whose size has exceeded the size standards established for its industry by the United States small business administration for three years.
  13. “Human services” means services provided to third parties, including social services such as day care, foster care, home care, homeless assistance, housing and shelter assistance, preventive services, youth services, and senior centers; health or medical services including those provided by health maintenance organizations; legal services; employment assistance services, vocational and education programs; and recreation programs.
  14. “Indirect subcontractor” means a person who has entered into an agreement with a direct subcontractor to provide services or perform work required pursuant to the direct subcontractor’s contract with a contractor.
  15. “Industry classification” means one of the following classifications:

   (a) construction;

   (b) professional services;

   (c) standard services; and

   (d) goods.

  1. “Joint venture” means an association, of limited scope and duration, between two or more persons who have entered into an agreement to perform and/or provide services required by a contract, in which each such person contributes property, capital, effort, skill and/or knowledge, and in which each such person is entitled to share in the profits and losses of the venture in reasonable proportion to the economic value of its contribution.
  2. “MBE” means a minority-owned business enterprise certified in accordance with § 1304 of the charter.
  3. “Minority group” means Black Americans; Asian Americans, and Hispanic Americans, provided that the commissioner is authorized to add additional groups to this definition upon a finding that there is statistically significant disparity between the availability of firms owned by individuals in such a group and the utilization of such firms in city procurement.
  4. “Non-certified firm” means a business enterprise that has not been certified as an MBE, WBE or EBE in accordance with § 1304 of the charter.
  5. “Person” means any business, individual, partnership, corporation, firm, company, or other form of doing business.
  6. “Professional services” means services that require specialized skills and the exercise of judgment, including but not limited to accountants, lawyers, doctors, computer programmers and consultants, architectural and engineering services, and construction management services.
  7. “Qualified joint venture agreement” means a joint venture between one or more MBEs, WBEs, and/or EBEs and another person, in which the percentage of profit or loss to which the certified firm or firms is entitled or exposed for participation in the contract, as set forth in the joint venture agreement, is at least 25% of the total profit or loss.
  8. “Scope of work” means specific tasks required in a contract and/or services or goods that must be provided to perform specific tasks required in a contract.
  9. “Socially and economically disadvantaged” refers to an individual who has experienced social disadvantage in American society as a result of causes not common to individuals who are not socially disadvantaged, and whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business.
  10. “Standard services” means services other than professional services and human services or services procured under a construction contract.
  11. “Utilization rate” means the percentage of total contract expenditures expended on contracts or subcontracts with firms that are owned by women, minorities, or individuals who are socially and economically disadvantaged, respectively, in one or more industry classifications.
  12. “WBE” means a women-owned business enterprise certified in accordance with § 1304 of the charter.

§ 11-61 Citywide Goals.

(1)  The citywide contracting participation goals for MBEs, WBEs and EBEs, which may be met through awards of prime contracts or subcontracts as described in 66 RCNY § 11-67, are as follows:
For construction contracts:Category:Black AmericansAsian AmericansHispanic AmericansWomenEmerging Participation goal:8% of total annual agency expenditures on such contracts8% of total annual agency expenditures on such contracts4% of total annual agency expenditures on such contracts18% of total annual agency expenditures on such contracts6% of total annual agency expenditures on such contracts
For professional services contracts:Category:Black AmericansHispanic AmericansWomenEmerging Participation goal:12% of total annual agency expenditures on such contracts8% of total annual agency expenditures on such contracts17% of total annual agency expenditures on such contracts6% of total annual agency expenditures on such contracts
For standard services contracts:Category:Black AmericansAsian AmericansHispanic AmericansWomenEmerging Participation goal:12% of total annual agency expenditures on such contracts3% of total annual agency expenditures on such contracts6% of total annual agency expenditures on such contracts10% of total annual agency expenditures on such contracts6% of total annual agency expenditures on such contracts
For goods contracts under one hundred thousand dollars:Category:Black AmericansAsian AmericansHispanic AmericansWomenEmerging Participation goal:7% of total annual agency expenditures on such contracts8% of total annual agency expenditures on such contract5% of total annual agency expenditures on such contracts25% of total annual agency expenditures on such contracts6% of total annual agency expenditures on such contracts

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   (2) (a) The division and the city chief procurement officer will develop a citywide utilization plan for the procurements of goods.

      (b) Agencies will develop agency utilization plans pursuant to 66 RCNY § 11-64. The citywide goals will not be summarily adopted as goals for all annual agency utilization plans; rather, goals for such plans may be set at levels higher, lower, or the same as the citywide goals, subject to the approval of the commissioner as described in paragraph three of 66 RCNY § 11-64. When setting its goals, each agency must consider the citywide goals, the size and nature of its own procurement portfolio, and the availability of MBEs, WBEs and EBEs with the capacity to perform the specific types and scale of work for which the agency anticipates it will solicit procurements during the year. Agencies will seek to ensure substantial progress toward the attainment of these goals in as short a time as practicable.

   (3) The citywide goals will not be summarily adopted as goals for individual procurements; rather, as set forth in 66 RCNY § 11-66, goals for such procurements may be set at levels higher, lower, or the same as the citywide goals. In setting such goals, each agency must take into account the citywide goals and the agency’s annual utilization plan, the size and nature of the procurement, and the availability of MBEs, WBEs and EBEs with the capacity to perform the specific types and scale of work involved in its procurements.

   (4) (a) No later than 2015, the commissioner, in consultation with the city chief procurement officer, will, for each industry classification and each minority group, review and compare the availability rates of firms owned by minorities and women to the utilization rates of such firms in agency contracts and direct subcontracts, and will on the basis of such review and any other relevant information, where appropriate, revise by rule the citywide participation goals set forth in this section. In making such revision, the commissioner will consider the extent to which discrimination continues to have an impact on the ability of minorities and women to compete for city contracts and subcontracts. The commissioner will submit the results of such review and any proposed revisions to the participation goals to the speaker of the council at least sixty days prior to publishing a proposed rule that would revise participation goals. Such review will thereafter be conducted at least once every two years.

      (b) No later than 2015, the commissioner will review information collected by the department to determine the availability and utilization of EBEs, and will on the basis of such review and any other relevant information, where appropriate, revise by rule the citywide participation goals set forth in this section. Such revised goals will be set at a level intended to assist in overcoming the impact of discrimination on such businesses. Such review will be conducted in 2015 and at least once every two years thereafter.

§ 11-62 Responsibilities of the Division.

(1) The division will create and maintain and periodically update directories by industry classification of MBEs, WBEs and EBEs which it will supply to all agencies, post on its website and on other relevant city websites and make available for dissemination and/or public inspection at its offices and other locations within each borough. In addition, the division will prepare, periodically update, and post on the division's website a directory of such city certified business enterprises for use by city agencies and contractors, which will include, but is not limited to, the following information for each such business enterprise, as applicable: (i) identification of the market sector in which the business enterprise operates; (ii) the bonding capacity of the business enterprise; (iii) the union affiliation, if any, of the business enterprise; (iv) the contract price and specific tasks performed by the business enterprise for its last three contracts; and (v) the renewal date for the business enterprise's certification.
  1. The division will make its resources available to assist agencies and contractors in (i) determining the availability of MBEs, WBEs and EBEs to participate in their contracts as prime contractors and/or subcontractors; and (ii) identifying opportunities appropriate for participation by MBEs, WBEs and EBEs in contracts.
  2. The division will develop and maintain relationships with organizations representing contractors, including MBEs, WBEs and EBEs, and solicit their support and assistance in efforts to increase participation of MBEs, WBEs and EBEs in city procurement.
  3. The division will coordinate with city and state entities that maintain databases of MBEs, WBEs and EBEs and work to enhance city availability data and directories.
  4. The division will keep agency M/WBE officers informed of conferences, contractor fairs, and other services that are available to assist them in pursuing the objectives of this section.
  5. The division will conduct, coordinate and facilitate technical assistance and educational programs for MBEs, WBEs and EBEs and other contractors designed to enhance participation of MBEs, WBEs and EBEs in city procurement. The division will further develop a clearinghouse of information on programs and services available to MBEs, WBEs and EBEs. The division will conduct meetings with MBEs, WBEs and EBEs to discuss what agencies look for in evaluating bids and proposals. The division will also educate prime contractors on opportunities to partner or subcontract with certified MBEs, WBEs and EBEs.
  6. The division will develop standardized forms and reporting documents for agencies and contractors to facilitate the reporting requirements of this section.
  7. The division will direct and assist agencies in their efforts to increase participation by MBEs, WBEs and EBEs in any city-operated financial, technical, and management assistance program.
  8. The division will study and recommend to the commissioner methods to streamline the M/WBE and EBE certification process.
  9. Each fiscal year the division, in consultation with the city chief procurement officer, will audit at least 5% of all open contracts for which contractor utilization plans have been established in accordance with 66 RCNY § 11-66 and 5% of all contracts awarded to MBEs, WBEs and EBEs to assess compliance with this subchapter. All solicitations for contracts for which contractor utilization plans are to be established will include notice of potential audit.
  10. The division will assist agencies in identifying and seeking ways to reduce or eliminate practices such as bonding requirements or delays in payment by prime contractors that may present barriers to competition by MBEs, WBEs and EBEs.
  11. The division will encourage prime contractors to enter joint venture agreements with MBEs, WBEs and EBEs.
  12. The division will assist appropriate certified business enterprises in becoming prequalified for those categories of procurement for which they may be eligible and for which contracting agencies utilize prequalification in the procurement process;
    1. The division will, upon reviewing applications for certification and recertification, determine whether a firm qualifies as a graduate MBE, WBE, or EBE.

   (b) At any time more than two years after the division has determined that a firm qualifies as a graduate MBE, WBE or EBE, the firm may apply to have such designation lifted. The division will lift the designation if the firm demonstrates that it has not been awarded contracts by one or more agencies within the past three years where the total city funding from the expense and capital budgets for such contracts was equal to or greater than fifty million dollars and it has been below the size standards established by the United States small business administration for its industry for a period of two years or more.

§ 11-63 Responsibilities of Agency M/WBE Officers.

Each agency head will designate a deputy commissioner or other executive officer to act as the agency M/WBE officer who will be directly accountable to the agency head concerning the activities of the agency in carrying out its responsibilities pursuant to this section, including the responsibilities relating to EBE participation. The duties of the M/WBE officer will include, but not be limited to:

  1. creating the agency’s utilization plan in accordance with 66 RCNY § 11-64;
  2. acting as the agency’s liaison with the division;
  3. acting as a liaison with organizations and/or associations of MBEs, WBEs and EBEs, informing such organizations and/or associations of the agency’s procurement procedures, and advising them of future procurement opportunities;
  4. ensuring that agency bid solicitations and requests for proposals are sent to MBEs, WBEs and EBEs in a timely manner, consistent with this section and rules of the procurement policy board;
  5. referring MBEs, WBEs and EBEs to technical assistance services available from agencies and other organizations;
  6. reviewing requests for waivers and/or modifications of participation goals and contractor utilization plans in accordance with 66 RCNY § 11-66;
  7. working with the division and city chief procurement officer in creating directories of certified MBEs, WBEs and EBEs pursuant to 66 RCNY § 11-68. In fulfilling this duty, the agency M/WBE officer will track and record each contractor that is an MBE, WBE or EBE and each subcontractor hired pursuant to such officer’s agency contracts that is an MBE, WBE or EBE, and will share such information with the director, the commissioner, and the city chief procurement officer;
  8. for contracts for which contractor utilization plans have been established pursuant to 66 RCNY § 11-66, monitoring each contractor’s compliance with its utilization plan by appropriate means, which will include, but need not be limited to, job site inspections, contacting MBEs, WBEs and EBEs identified in the plan to confirm their participation, and auditing the contractor’s books and records;
  9. monitoring the agency’s procurement activities to ensure compliance with its agency utilization plan and progress towards the participation goals as established in such plan;
  10. providing to the city chief procurement officer information for the reports required in 66 RCNY § 11-69 and providing any other plans and/or reports required pursuant to this subchapter or requested by the director and/or the city chief procurement officer; and
  11. participating in meetings required pursuant to 66 RCNY § 11-70.

§ 11-64 Agency Utilization Plans.

(1) Beginning May 15, 2006, and on April 1 of each year thereafter, each agency which, during the fiscal year which ended on June 30 of the preceding year, has made procurements in excess of five million dollars, without counting procurements exempt pursuant to paragraph two of 66 RCNY § 11-74, must submit an agency utilization plan for the fiscal year commencing in July of the year when such plan is to be submitted to the commissioner. Upon approval by the commissioner such plan will be submitted to the speaker of the council. Each such plan will, at a minimum, include the following:

   (a) the agency’s participation goals for MBEs, WBEs and EBEs for the year, provided however, that when setting its goals, each agency must consider the citywide goals, the size and nature of its own procurement portfolio (excluding contracts described in paragraph two of 66 RCNY § 11-74), and the availability of MBEs, WBEs and EBEs with the capacity to perform the specific types and scale of work for which the agency anticipates it will solicit procurements during the year;

   (b) an explanation for any agency goal that is different than the participation goal for the relevant group and industry classification as determined pursuant to 66 RCNY § 11-61;

   (c) a list of the names and titles of agency personnel responsible for implementation of the agency utilization plan;

   (d) methods and relevant activities proposed for achieving the agency’s participation goals; and

   (e) any other information which the agency or the commissioner deems relevant or necessary.

  1. An agency utilization plan must set forth specific participation goals for MBEs, WBEs and/or EBEs for purchases of professional services, standard services, construction and goods valued at or below twenty thousand dollars, and for purchases of professional services, standard services, construction and goods valued at or below one hundred thousand dollars. When setting its goals for such purchases, in addition to the factors set forth in paragraph (1) of this section, each agency must specifically consider the potential for such purchases to provide opportunities for MBEs, WBEs and EBEs to develop greater capacity, thereby increasing competition for city procurements.
  2. An agency utilization plan may be amended from time to time to reflect changes in the agency’s projected expenditures or other relevant circumstances and resulting changes in such agency’s participation goals. Such amendments must be submitted to the commissioner, the city chief procurement officer and the speaker of the council at least thirty days prior to implementation.
  3. In planning its procurement activities over the course of the fiscal year, each agency subject to this section must consider how it will achieve the goals set forth in its approved agency utilization plan. This determination should be guided by the agency’s knowledge of the market involved in the procurement, and the level of progress it has made during the fiscal year toward meeting its goal for the relevant category of procurement.
  4. Prior to approving individual agency utilization plans, the commissioner, in consultation with the city chief procurement officer, will consider whether such plans viewed in the aggregate establish any goals exceeding the corresponding citywide goals set forth in 66 RCNY § 11-61. If the commissioner, in consultation with the city chief procurement officer, finds any aggregated goals exceed the corresponding citywide goal, the commissioner will require agencies to adjust their goals so that plans, viewed in the aggregate, do not establish goals exceeding the citywide goals. Nothing in this paragraph will be construed to limit the award of contracts and subcontracts that may be made to MBEs, WBEs and EBEs without using goals.
  5. The commissioner, in consultation with the city chief procurement officer, will, no later than July 31 of each year, publish on the division’s website a plan and schedule for each agency detailing the anticipated contracting actions for the upcoming fiscal year that form the basis for the agency utilization plan of each such agency. The plan and schedule will include information specific to each prospective invitation for bids, request for proposal, or other solicitation, including, but not limited to, the specific type and scale of the services and/or goods to be procured, the term of the proposed contract, the method of solicitation the agency intends to utilize, and the anticipated fiscal year quarter of the planned solicitation.

§ 11-65 Achieving Agency Participation Goals.

(1) Each agency head must be directly accountable for the goals set forth in his or her agency's utilization plan.
  1. Each agency must make all reasonable efforts to meet the participation goals established in its agency utilization plan. Agencies will, at a minimum, use the following methods to achieve participation goals:

   (a) Agencies must engage in outreach activities to encourage MBEs, WBEs and EBEs to compete for all facets of their procurement activities, including contracts awarded by negotiated acquisition, emergency and sole source contracts, and each agency will seek to utilize MBEs, WBEs and/or EBEs for all types of goods, services and construction they procure.

   (b) Agencies must encourage eligible businesses to apply for certification as MBEs, WBEs and EBEs and inclusion in the directories of MBEs, WBEs and EBEs. Agencies must also encourage MBEs, WBEs and EBEs to have their names included on their bidders lists, seek pre-qualification where applicable, and compete for city business as contractors and subcontractors. Agencies are encouraged to advertise procurement opportunities in general circulation media, trade and professional association publications and small business media, and publications of minority and women’s business organizations, and send written notice of specific procurement opportunities to minority and women’s business organizations.

   (c) All agency solicitations for bids or proposals must include information referring potential bidders or proposers to the directories of MBEs, WBEs and EBEs prepared by the division.

   (d) In planning procurements, agencies must consider the effect of the scope, specifications and size of a contract on opportunities for participation by MBEs, WBEs and EBEs.

   (e) Prior to soliciting bids or proposals for contracts valued at over ten million dollars, other than contracts for capital projects valued at over twenty-five million dollars and contracts that are exempt pursuant to paragraph two of 66 RCNY § 11-74, an agency must submit the bid or proposal to the city chief procurement officer for a determination whether it is practicable to divide the proposed contract into smaller contracts and whether doing so will enhance competition for such contracts among MBEs, WBEs and EBEs and other potential bidders or proposers. The agency must follow the instructions of the city chief procurement officer in cases where he or she determines that it is both practicable and advantageous in light of cost and other relevant factors to divide such contracts into smaller contracts.

   (f) Agencies must examine their internal procurement policies, procedures and practices and, where practicable, address those elements, if any, that may negatively affect participation of MBEs, WBEs and EBEs in city procurement.

§ 11-66 Participation Goals for Contracts for Construction and Professional and Standard Services.

(1) Prior to issuing the solicitation of bids or proposals for individual contracts, agencies must establish participation goals for MBEs, WBEs and/or EBEs. Such goals may be greater than, less than or the same as the relevant citywide goal or goals established pursuant to 66 RCNY § 11-61. Taking into account the factors listed in this subdivision, an agency may establish a goal for a procurement that may be achieved by a combination of prime contract and subcontract dollars, a combination of construction and services performed pursuant to the contract, and/or a combination of MBEs, WBEs and/or EBEs. Alternatively, an agency may establish specific goals for particular types of services, and/or goals for particular types of certified firms. In determining the participation goals for a particular contract, an agency must consider the following factors:

   (a) the scope of work;

   (b) the availability of MBEs, WBEs and EBEs able to perform the particular tasks required in the contract;

   (c) the extent to which the type and scale of work involved in the contract present prime contracting and subcontracting opportunities for amounts within the capacity of MBEs, WBEs and EBEs;

   (d) the agency’s progress to date toward meeting its annual participation goals through race-neutral, gender-neutral and other means, and the agency’s expectations as to the effect such methods will have on participation of MBEs, WBEs and EBEs in the agency’s future contracts; and

   (e) any other factors the contracting agency deems relevant.

  1. A contracting agency shall not be required to establish participation goals (i) for procurements described in 66 RCNY § 11-74; or (ii) when the agency has already attained the relevant goal in its annual utilization plan, or expects that it will attain such goal without the use of such participation goals.
  2. For each contract in which a contracting agency has established participation goals, such agency shall state in the solicitation for such contract that bidders and/or proposers shall be required to agree as a material term of the contract that the contractor must meet the participation goals unless such goals are waived or modified by the agency in accordance with this section. An agency must permit a contractor that is an MBE, WBE or EBE to count its own participation toward fulfillment of the relevant participation goal, provided that the agency has determined the value of such a contractor’s participation by subtracting from the total value of the contract any amounts that the contractor pays to direct subcontractors. An agency must permit a contractor that is a qualified joint venture to count a percentage of its own participation toward fulfillment of the relevant participation goal. The agency must determine the value of such a contractor’s participation by subtracting from the total value of the contract any amounts that the contractor pays to direct subcontractors, and then multiplying the remainder by the percentage to be applied to total profit to determine the amount to which an MBE, WBE or EBE is entitled pursuant to the joint venture agreement. Notwithstanding any provision of this paragraph to the contrary, a contractor’s achievement of participation goals must be determined as described in paragraph two of 66 RCNY § 11-67.
  3. For each contract in which participation goals are established, the agency must include in its solicitation and/or bidding materials, a referral to the directories prepared by the division pursuant to 66 RCNY § 11-62.
  4. For each contract for which participation goals are established the contractor must submit with its bid or proposal a utilization plan indicating:

   (a) whether the contractor is an MBE, WBE, EBE, or a qualified joint venture;

   (b) the percentage of work it intends to award to direct subcontractors; and

   (c) in cases where the contractor intends to award direct subcontracts, a description of the type and dollar value of work designated for participation by MBEs, WBEs and/or EBEs, and the time frames in which such work is scheduled to begin and end. When the contractor utilization plan indicates that the bidder or proposer does not intend to meet the participation goals, the bid or proposal will not be deemed responsive unless the agency has granted a pre-award request for change pursuant to subdivision 11 of this section.

    1. For each contract for which a contractor utilization plan has been submitted, the contracting agency must require that within thirty days of the issuance of notice to proceed, and at least once per year thereafter, the contractor submit a list of persons to which it intends to award subcontracts within the next twelve months, and a written confirmation that the contractor has notified each MBE, WBE or EBE included in such list. For multi-year contracts, the contractor must submit such a list of persons and written confirmation of notification to the agency annually. In the event that a contracting agency disapproves a contractor’s selection of a subcontractor or subcontractors, the contracting agency must allow such contractor a reasonable time to propose alternate subcontractors.

   (b) The contracting agency may also require the contractor to report periodically about the contracts awarded by its direct subcontractors to indirect subcontractors.

  1. For each contract for which a contractor utilization plan has been submitted, the contractor must, with each voucher for payment, and/or periodically as the agency may require, submit statements, certified under penalty of perjury, which must include, but not be limited to, the total amount the contractor paid to its direct subcontractors, and, where applicable pursuant to subparagraph (l) of paragraph (1) of 66 RCNY § 11-67, the total amount direct subcontractors paid to indirect subcontractors, the names, addresses and contact numbers of each MBE, WBE or EBE hired as a subcontractor by the contractor or any of the contractor’s direct subcontractors, as well as the dates and amounts paid to each MBE, WBEs or EBEs. The contractor must also submit, along with its voucher for final payment, the total amount it paid to subcontractors, and, where applicable pursuant to subparagraph (l) of paragraph (1) of 66 RCNY § 11-67, the total amount its direct subcontractors paid directly to their indirect subcontractors; and a final list, certified under penalty of perjury, which must include the name, address and contact information of each subcontractor that is an MBE, WBE or EBE, the work performed by, and the dates and amounts paid to each.
  2. If payments made to, or work performed by, MBEs, WBEs or EBEs are less than the amount specified in the contractor’s utilization plan, the agency must take appropriate action in accordance with 66 RCNY § 11-72, unless the contractor has obtained a modification of its utilization plan pursuant to paragraph 12 of this section.
  3. When advertising a solicitation for bids or proposals for a contract for which a participation goal has been established, the agency must include in the advertisement a general statement that the contract will be subject to participation goals for MBEs, WBEs and/or EBEs.
  4. In the event that a contractor with a contract that includes a contractor utilization plan submits a request for a change order the value of which exceeds the greater of ten percent of such contract or $500,000, the agency must review the scope of work for the contract, and the scale and types of work involved in the change order, and determine whether the participation goals should be modified.
  5. Requests from bidders or proposers for changes in participation goals.

   (a) A bidder or proposer may request that an agency change the participation goal or goals established for the procurement on the grounds that goals are unreasonable in light of the availability of certified firms to perform the services required, or by demonstrating that it has legitimate business reasons for proposing a lower level of subcontracting in its utilization plan.

   (b) If the contracting agency determines that the participation goals established for the procurement are unreasonable in light of the availability of certified firms to perform the services required, it must revise the solicitation and extend the deadline for bids and proposals.

   (c) Subject to paragraph (d) of this section, the contracting agency may grant a full or partial waiver of the participation goals to a bidder or proposer who demonstrates that it has legitimate business reasons for proposing the level of subcontracting in its utilization plan. The contracting agency will make its determination in light of factors that must include, but not be limited to, whether the bidder or proposer has the capacity and the bona fide intention to perform the contract without any subcontracting, or to perform the contract without awarding the amount of subcontracts represented by the participation goals. In making such determination, the agency may consider whether the utilization plan is consistent with past subcontracting practices of the bidder or proposer, whether the bidder or proposer has made efforts to form a joint venture with a certified firm, and whether the bidder or proposer has made good faith efforts to identify portions of the contract that it intends to subcontract. The city chief contracting officer will notify the council of any such waiver granted with respect to a registered contract in the quarterly report required pursuant to 66 RCNY § 11-69.

   (d) The agency M/WBE officer shall provide written notice of requests for a full or partial waiver of the participation goals to the division and the city chief procurement officer and will not approve any such request without the approval of the city chief procurement officer, provided that the city chief procurement officer, upon adequate assurances of an agency’s ability to administer its utilization plan in accordance with the provisions of this section, may determine that further approval from the city chief procurement officer is not required with respect to such requests for an agency’s contracts or particular categories of an agency’s contracts. The city chief procurement officer will notify the speaker of the council and the division in writing in the quarterly report required pursuant to 66 RCNY § 11-69 following the registration of the contract for which the agency granted a request for a full or partial waiver of a participation goal, provided that where an agency has been authorized to grant waivers without approval of the chief procurement officer, such notice will be provided to the speaker of the council and the division by the agency. Such notification will include, but not be limited to, the name of the contractor, the original participation goal, the waiver request, including all documentation, and an explanation for the approval of such request.

  1. Modification of utilization plans at contractor’s request or agency’s initiative.

   (a) A contractor may request modification of its utilization plan after the award of a contract. Subject to paragraph (b) of this section, an agency may grant such request if it determines that such contractor has established, with appropriate documentary and other evidence, that it made all reasonable, good faith efforts to meet the goals set by the agency for the contract. In making such determination, the agency will consider evidence of the following efforts, as applicable, along with any other relevant factors:

      (i) The contractor advertised opportunities to participate in the contract, where appropriate, in general circulation media, trade and professional association publications and small business media, and publications of minority and women’s business organizations;

      (ii) The contractor provided notice of specific opportunities to participate in the contract, in a timely manner, to minority and women’s business organizations;

      (iii) The contractor sent written notices, by certified mail or facsimile, in a timely manner, to advise MBEs, WBEs and EBEs that their interest in the contract was solicited;

      (iv) The contractor made efforts to identify portions of the work that could be substituted for portions originally designated for participation by MBEs, WBEs and/or EBEs in the contractor utilization plan, and for which the contractor claims an inability to retain MBEs or WBEs or EBEs;

      (v) The contractor held meetings with MBEs, WBEs and/or EBEs prior to the date their bids or proposals were due, for the purpose of explaining in detail the scope and requirements of the work for which their bids or proposals were solicited. Documentation of such meetings must include the dates, times, and locations of such meetings, meeting announcements and invitations, meeting agendas, documents distributed at such meetings, and attendance lists;

      (vi) The contractor made efforts to negotiate with MBEs, WBEs and/or EBEs as relevant to perform specific subcontracts, or act as suppliers or service providers. Documentation of such negotiation must include the names, addresses, and telephone numbers of MBEs, WBEs and/or EBEs that were solicited; the date of each such solicitation; a description of the information provided regarding the plans and specifications for the work selected for subcontracting; and evidence as to the reasons that agreements could not be reached with MBEs, WBEs and/or EBEs to perform the work.

      (vii) Timely written requests for assistance made by the contractor to the agency M/WBE officer and to the division as well as documented requests for assistance made by the contractor to organizations that provide assistance in the recruitment and placement of MBEs, WBEs and/or EBEs, including but not limited to, minority and/or women community organizations, minority and/or women contractors’ groups; local, state and federal business assistance offices;

      (viii) Description of how recommendations made by the division and the contracting agency, and other organizations described in subparagraph (G) of this paragraph were acted upon and an explanation of why action upon such recommendations did not lead to the desired level of participation of MBEs, WBEs and/or EBEs.

      (ix) The contractor rejected bids by MBEs, WBEs and/or EBEs for sound reasons based upon a thorough investigation of their capabilities. The MBE’s, WBE’s and/or EBE’s political or social affiliations or lack thereof will not be a legitimate reason for rejecting or not soliciting bids to meet the goals.

      (x) The contractor designated portions of the work to be performed by MBEs, WBEs and/or EBEs in order to increase the likelihood that the goals will be met, including but not limited to, breaking out the work under the contract into feasible units to facilitate MBE, WBE and/or EBE participation.

      (xi) The contractor made efforts to assist interested MBEs, WBEs and/or EBEs in obtaining bonding, lines of credit, or insurance as required by the City or the contractor.

      (xii) The contractor made efforts to assist interested MBEs, WBEs and/or EBEs in obtaining necessary equipment, supplies, materials, or related assistance or services.

   (b) The agency M/WBE officer must provide written notice of requests for such modifications to the division and the city chief procurement officer and will not approve any such request for modification without the approval of the city chief procurement officer, provided that the city chief procurement officer, upon adequate assurances of an agency’s ability to administer its utilization plan in accordance with the provisions of this section, may determine that further approval from the city chief procurement officer is not required with respect to such requests for an agency’s contracts or particular categories of an agency’s contracts. The city chief procurement officer, will notify the speaker of the council and the division in writing within seven days of the approval of a request for modification of a utilization plan, provided that where an agency has been authorized to grant modifications without approval of the chief procurement officer, such notice will be provided to the speaker of the council and the division by the agency. Such notification must include, but not be limited to, the name of the contractor, the original utilization plan, the modification request, including all documentation, and an explanation for the approval of such request.

   (c) An agency may modify the participation goals established for a procurement when the agency has changed the scope of the work in a manner that affects the scale and types of work that the contractor indicated in its contractor utilization plan would be awarded to subcontractors.

   (d) The agency M/WBE officer will provide written notice to the contractor of its determination that must include the reasons for such determination.

  1. Substitution of the MBE, WBE and/or EBE subcontractor whose participation was necessary to achieve a participation goal will be permitted only with approval of the contracting agency, and only in the following circumstances:

   (a) Unavailability after receipt of reasonable notice to proceed;

   (b) Poor performance;

   (c) Financial incapacity;

   (d) Refusal by the subcontractor to honor the bid or proposal price or scope;

   (e) Mistake of fact or law about the elements of the scope of work of a solicitation where a reasonable price cannot be agreed;

   (f) Failure of the subcontractor to meet insurance, licensing, or bonding requirements;

   (g) The subcontractor’s withdrawal of its bid or proposal;

   (h) Revocation of the subcontractor’s certification as an MBE, WBE or EBE;

   (i) The contractor becomes aware of information negatively reflecting on the subcontractor’s business integrity;

   (j) Other circumstances allowed by the agency after consultation with the division.

Where the contractor has established the basis for substitution to the satisfaction of the contract compliance officer, it must make good faith efforts to substitute with a subcontractor which can be counted toward achievement of the relevant goal. If the contractor plans to hire a subcontractor on any scope of work that was not previously disclosed in the compliance plan, the contractor must obtain approval of the agency M/WBE officer and must make good faith efforts to ensure that MBEs, WBEs and/or EBEs have a reasonable opportunity to bid on the new scope of work.

  1. For each contract in which a contracting agency has established participation goals, the agency will evaluate and assess the contractor’s performance in meeting each such goal. Such evaluation and assessment must be a part of the contractor’s overall contract performance evaluation required pursuant to § 333 of the charter.

§ 11-67 Determining Credit for MBE, WBE and EBE Participation.

(1)  An agency's achievement of its annual goals will be calculated as follows:

   (a) The dollar amount that an agency has paid or is obligated to pay to a prime contractor which is an MBE, WBE or EBE, reduced by the dollar amount the contractor has paid or is obligated to pay its direct subcontractors upon their completion of work, will be credited toward the relevant goal. Where an agency has paid or is obligated to pay a prime contractor that is both an MBE and a WBE, such amount will be credited toward the relevant goal for MBEs or the goal for WBEs.

   (b) Except as provided in subparagraph (c) of this paragraph, the total dollar amount that a prime contractor of any agency has paid or is obligated to pay to a direct subcontractor that is an MBE, WBE or EBE will be credited toward the relevant goal. Where such a contractor has paid or is obligated to pay a direct subcontractor that is both an MBE and a WBE, such amount will be credited toward the relevant goal for MBEs or the goal for WBEs.

   (c) In the case of contracts of the types identified pursuant to subparagraph (l) of this paragraph, the total dollar amount that a prime contractor of an agency has paid or is obligated to pay a direct subcontractor that is an MBE, WBE, or EBE, reduced by the dollar amount the direct subcontractor has paid or is obligated to pay its indirect subcontractors upon completion of work, will be credited toward the relevant goal. Where such a contractor has paid or is obligated to pay a direct contractor that is both an MBE and a WBE, such amount will be credited toward the relevant goal for MBEs or the goal for WBEs.

   (d) In the case of contracts of the types identified pursuant to subparagraph (l) of this paragraph, the total dollar amount that a direct subcontractor of the prime contractor has paid or is obligated to pay to an indirect subcontractor that is an MBE, WBE or EBE will be credited toward the relevant goal. Where such a contractor has paid or is obligated to pay an indirect contractor that is both an MBE and a WBE, such amount will be credited toward the relevant goal for MBEs or the goal for WBEs.

   (e) For requirements contracts, credit will be given for the actual dollar amount paid under the contract.

   (f) Where one or more MBEs, WBEs or EBEs is participating in a qualified joint venture, the amounts that the joint venture is required to pay its direct subcontractors will be subtracted as provided in subparagraph (a) of this paragraph, and then a percentage of the remaining dollar amount of the contract equal to the percentage of total profit to which MBEs, WBEs or EBEs are entitled pursuant to the joint venture agreement will be credited toward the relevant goal. Where such a participant in a joint venture is both an MBE and a WBE, such amount will be credited toward the relevant goal for MBEs or the goal for WBEs.

   (g) No credit will be given for participation in a contract by an MBE, WBE or EBE that does not perform a commercially useful function.

   (h) No credit will be given for the participation in a contract by any company that has not been certified as an MBE, WBE or EBE in accordance with § 1304 of the charter.

   (i) In the case of a contract for which the contractor is paid on a commission basis, the dollar amount of the contract may be determined on the basis of the commission earned or reasonably anticipated to be earned under the contract.

   (j) No credit will be given to a contractor for participation in a contract by a graduate MBE, WBE or EBE.

   (k) The participation of a certified company will not be credited toward more than one participation goal.

   (l) The city chief procurement officer may identify types of contracts where payments to indirect subcontractors will be credited toward the relevant participation goals.

  1. A contractor’s achievement of its participation goals established in its utilization plan will be calculated as follows:

   (a) A contractor’s use of direct subcontractors and their indirect subcontractors toward achievement of each goal established in its utilization plan will be calculated in the same manner as described for calculating the achievement of agency utilization goals as described in paragraph (1) of this subdivision, except that a contractor’s use of a subcontractor that is both an MBE and a WBE will not be credited toward the contractor’s achievement of more than one goal;

   (b) An agency must permit a contractor that is an MBE, WBE or EBE to count its own participation toward fulfillment of the relevant participation goal, provided that the value of such a contractor’s participation be determined by subtracting from the total value of the contract any amounts that the contractor pays to direct subcontractors, and provided further that a contractor that is both an MBE and a WBE will not be credited for its participation toward more than one goal;

   (c) No credit will be given to the contractor for the participation of a company that is not certified in accordance with § 1304 of the charter before the date that the subcontractor completes the work under the subcontract.

   (d) An agency will permit a contractor that is a qualified joint venture to count a percentage of its own participation toward fulfillment of the relevant participation goal. The value of such a contractor’s participation will be determined by subtracting from the total value of the contract any amounts that the contractor pays to direct subcontractors, and then multiplying the remainder by the percentage to be applied to total profit to determine the amount to which an MBE, WBE or EBE is entitled pursuant to the joint venture agreement; provided that where such a participant in a joint venture is both an MBE and a WBE, such amount will not be credited toward more than one goal.

§ 11-68 Small Purchases.

Whenever an agency solicits bids or proposals for small purchases pursuant to section three hundred fourteen of the charter, the agency must maintain records identifying the MBEs, WBEs and EBEs it solicited, which will become part of the contract file.

§ 11-69 Compliance Reporting.

(1) The city chief procurement officer, in consultation with the division, will prepare and submit quarterly reports to the speaker of the council as described in this section. Preliminary reports containing information for the fiscal year in progress will be submitted to the speaker of the council by January first, April first, and July first of each year, and a final report containing information for the preceding fiscal year will be submitted to the speaker of the council by October first of each year. The reports, which will also be posted on the division's website, must contain the following information, disaggregated by agency:

   (a) the number and total dollar value of contracts awarded, disaggregated by industry classification and size of contract, including but not limited to, contracts valued at or below twenty thousand dollars, contracts valued above twenty thousand dollars and at or below one hundred thousand dollars, contracts valued above one hundred thousand dollars and at or below one million dollars, contracts valued above one million dollars and at or below five million dollars, contracts valued above five million dollars and at or below twenty five million dollars, and contracts valued above twenty five million dollars;

   (b) for those contracts for which an agency set participation goals in accordance with 66 RCNY § 11-66:

      (i) the number and total dollar amount of such contracts disaggregated by industry classification, size of contract and status as MBE, WBE, EBE, or non-certified firm, and further disaggregated by minority and gender group, and the number and dollar value of such contracts that were awarded to firms that are certified both as MBEs and WBEs;

      (ii) the number and total dollar value of such contracts that were awarded to qualified joint ventures and the total dollar amount attributed to the MBE, WBE or EBE joint venture partners, disaggregated by minority and gender group, size of contract and industry classification, and the number the dollar value of such contracts that were awarded to firms that are certified both as MBEs and WBEs;

      (iii) the number and total dollar value of subcontracts approved during the reporting period that were entered into pursuant to contracts for which the agency has established participation requirements under this section (including both contracts awarded during the current reporting period and those awarded in earlier reporting periods that remain open during the current reporting period), and the number and total dollar amount of such subcontracts awarded to MBEs, WBEs and EBEs, disaggregated by minority and gender group, size of subcontract and industry classification, and the number and dollar value of such subcontracts that were awarded to firms that are certified both as MBEs and WBEs;

      (iv) a list of the requests for full or partial waivers of participation requirements for such contracts made pursuant to paragraph 11 of 66 RCNY § 11-66 and the determination made with respect to such requests, and the number and dollar amount of those contracts for which such waivers were granted, disaggregated by industry classifications; and

      (v) a list of the requests for modification of participation requirements for such contracts made pursuant to subdivision 12 of 66 RCNY § 11-66 and the determinations made with respect to such requests, and the number and dollar amount of those contracts for which such modifications were granted, disaggregated by industry classification;

   (c) a detailed list of each complaint received pursuant to subdivision 1 of 66 RCNY § 11-72 which will, at a minimum, include the nature of each complaint and the action taken in investigating and addressing such complaint including whether and in what manner the enforcement provisions of 66 RCNY § 11-72 were invoked and the remedies applied;

   (d) a detailed list of all non-compliance findings made pursuant to subdivision 4 of 66 RCNY § 11-72 and actions taken in response to such findings;

   (e) the number of firms certified or recertified in accordance with § 1304 of the charter during the six months immediately preceding such report;

   (f) the number and percentage of contracts audited pursuant to subdivision 10 of 66 RCNY § 11-62 and a summary of the results of each audit;

   (g) a summary of efforts to reduce or eliminate barriers to competition as required pursuant to paragraph 11 of 66 RCNY § 11-62;

   (h) a list of all solicitations submitted to the city chief procurement officer pursuant to paragraph e of subdivision 2 of 66 RCNY § 11-65 and a summary of the determination made regarding each such submission; and

   (i) any other information as may be required by the director and/or the commissioner.

  1. The annual reports submitted in October will, in addition, contain a determination made by the director and the commissioner, as to whether each agency has made substantial progress toward achieving its utilization goals and whether the city has made substantial progress toward achieving the citywide goals established pursuant to 66 RCNY § 11-61.
  2. If an agency that has submitted an agency utilization plan pursuant to 66 RCNY § 11-64 fails to achieve its utilization goal, the agency head must prepare and submit to the director, the commissioner, the city chief procurement officer, and the speaker of the council by October first a performance improvement plan which must describe in detail the efforts such agency intends to undertake to increase M/WBE participation.
  3. The data that provide the basis for the reports required by this section must be made available electronically to the council at the time the reports are submitted.

§ 11-70 Agency Compliance.

(1) Each agency must submit to the commissioner and the city chief procurement officer such information as is necessary for the city chief procurement officer to complete his or her reports as required in 66 RCNY § 11-69. The director, the commissioner, and the city chief procurement officer will review each agency's submissions. The director will convene the agency M/WBE officers for those agencies that have submitted utilization plans pursuant to 66 RCNY § 11-64 as often as the director deems necessary, but no less frequently than once per quarter, in order to have agency M/WBE officers (i) discuss the results of the reports required in 66 RCNY § 11-69; (ii) offer detailed information concerning their effectuation of their performance improvement plans and any additional efforts undertaken to meet goals established in agency utilization plans; (iii) share the practices that have yielded successes in increasing M/WBE participation; and (iv) devise strategic plans to improve the performance of those failing to meet goals established in agency utilization plans. No less frequently than twice per year, agency heads for those agencies that have submitted utilization plans pursuant to 66 RCNY § 11-64 must join such quarterly meetings. Whenever it has been determined that an agency is not making adequate progress toward the goals established in its agency utilization plan, the director, the commissioner, and the city chief procurement officer will act to improve such agency's performance, and may take any of the following actions:

   (a) require the agency to submit more frequent reports about its procurement activity;

   (b) require the agency to notify the director, the commissioner and the city chief procurement officer, prior to solicitation of bids or proposals for, and/or prior to award of, contracts in any category where the agency has not made adequate progress toward achieving its utilization goals;

   (c) reduce or rescind contract processing authority delegated by the mayor pursuant to §§ 317 and 318 of the charter; and

   (d) any other action the director, the commissioner, and the city chief procurement officer deem appropriate.

  1. Noncompliance. Whenever the director, the city chief procurement officer, or the commissioner finds that an agency has failed to comply with its duties under this section, he or she will attempt to resolve such noncompliance informally with the agency head. In the event that the agency fails to remedy its noncompliance after such informal efforts, the director and the city chief procurement officer will submit such findings in writing to the mayor and the speaker of the council, and the mayor will take appropriate measures to ensure compliance.
  2. Failure by an agency to submit information required by the director, the division, or the city chief procurement officer, in accordance with this section, including but not limited to the utilization plan required pursuant to 66 RCNY § 11-64 of this subchapter, will be deemed noncompliance.

§ 11-71 Pre-Qualification.

An agency establishing a list of pre-qualified bidders or proposers may deny pre-qualification to prospective contractors who fail to demonstrate in their application for pre-qualification that they have complied with applicable federal, state and local requirements for participation of MBEs, WBEs and EBEs in procurements. A denial of pre-qualification may be appealed pursuant to applicable procurement policy board rules.

§ 11-72 Enforcement.

(1) Any person who believes that a violation of the requirements of § 6-129 of the administrative code of the city of New York or these rules, or any provision of a contract that implements § 6-129 of the administrative code of the city of New York or these rules, including, but not limited to, any contractor utilization plan, has occurred may submit a complaint in writing to the division, the city chief procurement officer and the comptroller. The division will promptly investigate such complaint and determine whether there has been a violation.
  1. Any complaint alleging fraud, corruption or other criminal behavior on the part of a bidder, proposer, contractor, subcontractor or supplier will be referred to the commissioner of the department of investigation.
  2. Contract award.

   (a) When an agency receives a protest from a bidder or proposer regarding a contracting action that is related to § 6-129 of the administrative code of the city of New York or these rules, the agency must send copies of the protest and any appeal thereof, and any decisions made on the protest or such appeal, to the division and the comptroller.

   (b) Whenever a contracting agency has determined that a bidder or proposer has violated § 6-129 of the administrative code of the city of New York, or these rules, the agency may disqualify such bidder or proposer from competing for such contract and the agency may revoke such bidder’s or proposer’s prequalification status.

  1. Contract administration.

   (a) For each contract for which an agency has established participation requirements under this section, at least once annually during the term of such contract, the agency must review the contractor’s progress toward attainment of its utilization plan, including but not limited to, reviewing the percentage of work the contractor has actually awarded to MBE, WBE and/or EBE subcontractors and the payments the contractor has made to such subcontractors.

   (b) Whenever an agency believes that a contractor or a subcontractor is not in compliance with § 6-129 of the administrative code of the city of New York, these rules, or any provision of a contract that implements § 6-129 of the administrative code of the city of New York or these rules, including, but not limited to any contractor utilization plan, the agency must send a written notice to the city chief procurement officer, the division and the contractor describing the alleged noncompliance and offering the contractor an opportunity to be heard. The agency must then conduct an investigation to determine whether such contractor or subcontractor is in compliance.

   (c) In the event that a contractor has been found to have violated § 6-129 of the administrative code of the city of New York, these rules, or any provision of a contract that implements § 6-129 of the administrative code of the city of New York or these rules, including, but not limited to any contractor utilization plan, the contracting agency must, after consulting with the city chief procurement officer and the division, determine whether any of the following actions should be taken:

      (i) enter an agreement with the contractor allowing the contractor to cure the violation;

      (ii) revoke the contractor’s pre-qualification to bid or make proposals for future contracts;

      (iii) make a finding that the contractor is in default of the contract;

      (iv) terminate the contract;

      (v) declare the contractor to be in breach of contract;

      (vi) withhold payment or reimbursement;

      (vii) determine not to renew the contract;

      (viii) assess actual and consequential damages;

      (ix) assess liquidated damages or reduction of fees, provided that liquidated damages may be based on amounts representing costs of delays in carrying out the purposes of the program established by this section, or in meeting the purposes of the contract, the costs of meeting utilization goals through additional procurements, the administrative costs of investigation and enforcement, or other factors set forth in the contract;

      (x) exercise rights under the contract to procure goods, services or construction from another contractor and charge the cost of such contract to the contractor that has been found to be in noncompliance; or

      (xi) take any other appropriate remedy.

  1. To the extent available pursuant to rules of the procurement policy board, a contractor may seek resolution of a dispute regarding a contract related to § 6-129 of the administrative code of the city of New York or these rules. The contracting agency must submit a copy of such submission to the division.
  2. Whenever an agency has reason to believe that an MBE, WBE or EBE is not qualified for certification, or is participating in a contract in a manner that does not serve a commercially useful function, or has violated any provision of § 6-129 of the administrative code of the city of New York or these rules, the agency must notify the commissioner who will determine whether the certification of such business enterprise should be revoked.
  3. Statements made in any instrument submitted to an agency pursuant to these rules will be submitted under penalty of perjury and any false or misleading statement or omission will be grounds for the application of any applicable criminal and/or civil penalties for perjury. The making of a false or fraudulent statement by an MBE, WBE or EBE in any instrument submitted pursuant to these rules will, in addition, be grounds for revocation of its certification.
  4. A contractor’s record in implementing its contractor utilization plan will be a factor in the evaluation of its performance. Whenever a contracting agency determines that a contractor’s compliance with a contractor utilization plan has been unsatisfactory, the agency must, after consultation with the city chief procurement officer, file an advice of caution form for inclusion in VENDEX as caution data.
  5. Any complaint alleging fraud, corruption or other criminal behavior on the part of a bidder, proposer, contractor, subcontractor or supplier must in addition be referred to the department of investigation.

§ 11-73 Procurements by Elected Officials and the Council.

(1) In the case of procurements by independently elected city officials other than the mayor, where these rules provide for any action to be taken by the director or the city chief procurement officer, such action will instead be taken by such elected officials.
  1. In the case of procurements by the council, where these rules provide for any action to be taken by the director or the city chief procurement officer, such action will instead be taken by the speaker of the council.

§ 11-74 Applicability.

Agencies will not be required to apply participation requirements to the following types of contracts:

  1. those subject to federal or state funding requirements which preclude the city from imposing the requirements of this subchapter;
  2. those subject to federal or state law participation requirements for MBEs, WBEs, disadvantaged business enterprises, and/or EBEs;
  3. contracts between agencies;
  4. procurements made through the United States general services administration or another federal agency, or through the New York state office of general services or another state agency, or any other governmental agency.
  5. emergency procurements pursuant to section three hundred fifteen of the charter;
  6. sole source procurements pursuant to section three hundred twenty-one of the charter;
  7. contracts for human services; and
  8. contracts awarded to not-for-profit organizations.

§ 11-75 Comptroller.

The comptroller shall randomly examine contracts for which contractor utilization plans are established to assess compliance with such plans. All solicitations for contracts for which contractor utilization plans are to be established shall include notice of potential comptroller examinations.

Subchapter E: Emerging Business Enterprise Certification Program

§ 11-81 Definitions.

As used in this subchapter, the following terms have the following meanings:

Applicant. “Applicant” means a business enterprise which has applied for certification as an EBE.

Audit. “Audit” means an examination of a business enterprise to determine whether the business enterprise is eligible for certification as an EBE, and may include an examination of books, records, physical facilities and interviews of applicants.

Business enterprise. “Business enterprise” means any entity, including a sole proprietorship, partnership or corporation, which is authorized to and engages in lawful business transactions in accordance with the laws of New York State.

Certified business. “Certified business” means a business enterprise which has been approved for certification as an EBE in accordance with the procedures set forth in 66 RCNY § 11-82, subsequent to verification that the business enterprise is owned, operated, and controlled by socially and economically disadvantaged persons as defined in 66 RCNY § 11-82.

Certification director. “Certification director” means the director of the emerging business enterprise certification program or his or her designee or his or her successor in function.

Certification letter. “Certification letter” means the letter sent by DSBS to an applicant notifying it of its certification as an EBE.

City. “City” means the City of New York.

Commissioner. “Commissioner” means the commissioner of the New York City Department of Small Business Services or his or her designee or his or her successor in function.

Day. “Day” means a calendar day unless otherwise specified.

Denial or denied. “Denial” or “denied” means a determination by DSBS that a business enterprise is not eligible for certification as an EBE because it does not meet the criteria for certification.

Division. “Division” means the division of economic and financial opportunity within the department of small business services.

DSBS. “DSBS” means the New York City Department of Small Business Services or its successor in function.

Economically disadvantaged. “Economically disadvantaged” refers to a socially disadvantaged person whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.

Non-certified firm. “Non-certified firm” means a business enterprise that has not been certified as an EBE in accordance with § 1304 of the charter.

Emerging business enterprise or EBE. “Emerging business enterprise” or “EBE” means a business enterprise that is certified in accordance with § 1304 of the charter.

Emerging business enterprise certification application. “Emerging business enterprise certification application” means the form that DSBS requires an applicant to submit for purposes of applying for certification as an EBE.

Geographic Market. “Geographic market” of the city means the following counties: Bronx, Kings, New York, Queens, Richmond, Nassau, Putnam, Rockland, Suffolk and Westchester within the State of New York; and Bergen, Hudson, and Passaic within the state of New Jersey.

Graduate EBE. “Graduate EBE” means an EBE which has been awarded contracts by one or more agencies within the past three years where the total city funding from the expense and capital budgets for such contracts was equal to or greater than fifty million dollars and whose size has exceeded the size standards established for its industry by the United States small business administration for three years.

Immediate family. “Immediate family” means a spouse, domestic partner, unemancipated child (including children of a domestic partner), and if they live with the individual claiming disadvantage, parent or sibling.

Principal office or place of business. “Principal office” or “place of business” means where the main office and regular meeting place of the board of directors that manages, conducts, and directs the business is located.

Rejected or rejection. “Rejected” or “rejection” means the refusal by DSBS to certify a business enterprise as an EBE due to an insufficiency in documentation submitted by the applicant.

Socially and economically disadvantaged. “Socially and economically disadvantaged” refers to an individual who has experienced social disadvantage in American society as a result of causes not common to individuals who are not socially disadvantaged, and whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged. An individual’s race, national origin, or gender, by itself, does not qualify the individual as “socially disadvantaged” and the net worth of individuals to be “economically disadvantaged” must be less than one million dollars. In determining such net worth, the division will exclude the ownership interest in the business enterprise and the equity in the primary personal residence.

§ 11-82 Eligibility Criteria.

The following standards will be used to determine whether a business enterprise is eligible for certification as an EBE.

  1. Nexus. In order to be eligible for certification as an EBE, a business enterprise will have a real and substantial business presence in the geographic market for the city of New York. An EBE which meets one of the following conditions will be deemed to have a real and substantial business presence in the geographic market for the city of New York:

   (1) the business enterprise’s principal office or place of business or headquarters is located within the City; or

   (2) the business enterprise maintains full-time employees in one or more of the business enterprise’s offices within the City to conduct or solicit business in the City the majority of their working time; or

   (3) the business enterprise’s principal office or place of business or headquarters is located within the geographic market of the City, and

      (i) has transacted business more than once in the City within the last three (3) years, or

      (ii) has sought to transact business more than once in the City within the last three (3) years; or

   (4) twenty-five percent (25%) of the business enterprise’s annual gross receipts for the last three (3) years were derived from transacting business in the City; or

   (5) the business enterprise’s principal office or place of business or headquarters is not located within the geographic market of the City but the business enterprise has demonstrated two or more of the following indicia of a real and substantial presence in the market for the City of New York:

      (i) the business enterprise has maintained a bank account or engaged in other banking transactions in the City;

      (ii) the business enterprise, or at least one of its owners, possesses a license issued by an agency of the City to do business in the City;

      (iii) the business enterprise has transacted or sought to transact business in or with the City more than once in the past three years.

  1. Ownership. For the purposes of determining whether an applicant should be certified as an EBE, or whether such certification should be revoked, the following rules concerning ownership will be applied:

   (1) The equity interest of socially and economically disadvantaged individuals must be proportionate to the contribution of the socially and economically disadvantaged individuals as demonstrated by, but not limited to, contributions of money, property, equipment or expertise;

   (2) A sole proprietorship must be owned by a socially and economically disadvantaged individual;

   (3) A partnership must demonstrate that socially and economically disadvantaged individuals a fifty-one (51%) percent or greater share of the partnership; and

   (4) A corporation must have issued at least fifty-one (51%) percent of its issued and authorized voting and all other stock to socially and economically disadvantaged individuals.

  1. Control. Determinations as to whether socially and economically disadvantaged individuals control the business enterprise will be made according to the following criteria:

   (1) Decisions pertaining to the operations of the business enterprise must be made by socially and economically disadvantaged individuals claiming ownership of that business enterprise. The following will be considered in determining whether the socially and economically disadvantaged persons are making such decisions:

      (i) whether socially and economically disadvantaged individuals have experience and technical competence in the business enterprise seeking certification;

      (ii) whether socially and economically disadvantaged individuals demonstrate the working knowledge and ability needed to operate the business enterprise; and

      (iii) whether socially and economically disadvantaged individuals show that they devote time on an ongoing basis to the daily operation of the business enterprise.

   (2) Articles of incorporation, corporate by-laws, partnership agreements, business certificates, corporate tax returns, unincorporated business tax returns, partnership tax returns and other agreements, including, but not limited to, loan agreements, lease agreements, supply agreements, credit agreements or other agreements must permit socially and economically disadvantaged individuals who claim ownership of the business enterprise to make those decisions pertaining to operations of the business enterprise without restrictions.

   (3) Socially and economically disadvantaged individuals must demonstrate control of negotiations, signature authority for payroll, leases, letters of credit, insurance bonds, banking services and contracts, and other business transactions through production of relevant documents.

  1. Additional eligibility provisions. The following provisions apply to all applicants seeking certification as an EBE:

   (1) Where the actual management of the business enterprise is contracted out to individuals other than socially and disadvantaged individuals, socially and economically disadvantaged individuals must demonstrate that they have the ultimate power to hire and fire these managers, that they exercise this power and make other substantial decisions which reflect control of the business enterprise;

   (2) Documentation of one (1) year’s business activity will be required in order to provide sufficient information upon which certification can be reasonably made. The commissioner, in his or her discretion, may permit documentation for a lesser period;

   (3) DSBS may grant eligible status to any business enterprise eligible under 66 RCNY § 11-82, and certified as an EBE or disadvantaged business enterprise by another governmental or other certifying entity whose emerging business enterprise or disadvantaged business enterprise certification criteria are determined by the commissioner to be consistent with the certification criteria set forth in these rules. Unless otherwise determined by the commissioner, the maximum period for which any certification granted by DSBS pursuant to this subdivision is valid will be the period during which the business enterprise is certified as an EBE or disadvantaged business enterprise with the original certifying entity;

   (4) Any business enterprise that satisfies the eligibility criteria as set forth in 66 RCNY § 11-82 is presumptively eligible for certification under these rules; provided that the commissioner may decline to certify, or revoke the certification of, any business enterprise on the ground that there is not a firm basis for believing that there is a compelling state interest to justify certification of that business enterprise under these rules.

  1. Evidence of social and economic disadvantage.

   (1) (A) Evidence of individual social disadvantage must include the following elements:

         (i) At least one objective distinguishing feature that has contributed to social disadvantage, such as physical or mental disability, long-term residence in an environment isolated from the mainstream of United States society, or other similar causes not common to individuals who are not socially disadvantaged;

         (ii) Personal experiences of substantial and chronic social disadvantage in United States society, not in other countries; and

         (iii) Negative impact on entry into or advancement in the business world because of the social disadvantage. DSBS will consider any relevant evidence in assessing this element. In every case, however, DSBS will consider education, employment and business history, where applicable, to see if the totality of circumstances shows disadvantage in entering into or advancing in the business world.

      (B) Education. DSBS will consider such factors as denial of equal access to institutions of higher education, exclusion from social and professional association with students or teachers, denial of educational honors rightfully earned, and social patterns or pressures which discouraged the individual from pursuing a professional or business education.

      (C) Employment. DSBS will consider such factors as unequal treatment in hiring, promotions and other aspects of professional advancement, pay and fringe benefits, and other terms and conditions of employment; retaliatory or discriminatory behavior by an employer; and social patterns or pressures which have channeled the individual into nonprofessional or non-business fields.

      (D) Business history. DSBS will consider such factors as unequal access to credit or capital, acquisition of credit or capital under commercially unfavorable circumstances, unequal treatment in opportunities for government contracts or other work, unequal treatment by potential customers and business associates, and exclusion from business or professional organizations.

   (2) Evidence of individual economic disadvantage must include the following elements:

      (A) Submission of narrative and financial information.

         (i) Each individual claiming economic disadvantage must describe it in a narrative statement, and must submit personal financial information supporting the assertions contained in the narrative statement.

         (ii) An individual claiming economic disadvantage who is married or a member of a domestic partnership must submit separate financial information for his or her spouse or domestic partner, provided that such financial information will not be required where the individual and the spouse are legally separated.

      (B) DSBS evaluation of diminished capital and credit opportunities. DSBS will examine factors relating to the personal financial condition of any individual claiming disadvantaged status, including personal income for the past two years (including bonuses and the value of company stock given in lieu of cash), personal net worth, and the fair market value of all assets, whether encumbered or not. DSBS will also consider the financial condition of the applicant compared to the financial profiles of small businesses in the same primary industry classification, or, if not available, in similar lines of business, which are not owned and controlled by socially and economically disadvantaged individuals in evaluating the individual’s access to credit and capital. The financial profiles that DSBS compares will include total assets, net sales, pre-tax profit, sales/working capital ratio, and net worth.

      (C) Transfers within two years.

         (1) Except as set forth in 66 RCNY § 11-82(e)(2)(C)(2), DSBS will attribute to an individual claiming disadvantaged status any assets which that individual has transferred to an immediate family member, or to a trust a beneficiary of which is an immediate family member, for less than fair market value, within two years prior to a business enterprise’s application for participation in the EBE program or within two years of a participant’s annual renewal, unless the individual claiming disadvantaged status can demonstrate that the transfer is to or on behalf of an immediate family member for that individual’s education, medical expenses, or some other form of essential support.

         (2) DSBS will not attribute to an individual claiming disadvantaged status any assets transferred by that individual to an immediate family member that are consistent with the customary recognition of special occasions, such as birthdays, graduations, anniversaries, and retirements.

         (3) In determining an individual’s access to capital and credit, DSBS may consider any assets that the individual transferred within such two-year period described by 66 RCNY § 11-82(e)(2)(C)(1), that DSBS does not consider in evaluating the individual’s assets and net worth (e.g., transfers to charities).

  1. Net worth. For EBE eligibility, the net worth of an individual claiming disadvantage must be less than one million dollars. In determining such net worth, DSBS will exclude the ownership interest in the applicant and the applicant’s equity in the primary personal residence (except any portion of such equity which is attributable to excessive withdrawals from the applicant). Exclusions for purposes of determining net worth are not exclusions for asset valuation or access to capital and credit purposes. A contingent liability does not reduce an individual’s net worth.
    • Graduate EBE determinations. The division will, upon reviewing applications for certification and recertification, determine whether a business enterprise qualifies as a graduate EBE. The division will make such determinations in accordance with the following procedures:

   (1) In the event that the division determines a business enterprise seeking new certification as an EBE qualifies as a graduate EBE pursuant to 66 RCNY § 11-81, the division will provide a written notice of such determination to the applicant business enterprise stating the reason(s) for such determination and the procedures for challenging the graduate EBE determination.

   (2) In the event that the division determines a certified EBE qualifies as a graduate EBE pursuant to 66 RCNY § 11-81, the division will provide a written notice of such determination to the business enterprise seeking recertification setting forth the reason(s) for such determination and the procedures for challenging the graduate EBE determination.

   (3) In the event that the division determines a business enterprise seeking new certification or a certified EBE to be a graduate EBE pursuant to 66 RCNY § 11-81, the business enterprise may challenge such a determination pursuant to the procedures set forth in 66 RCNY §§ 11-84 and 11-85.

   (4) In the event that the division has determined a business enterprise to be a graduate EBE, and the business enterprise has not made a timely challenge to that determination, or has made such a challenge and the department has affirmed its determination, the business enterprise may not apply to have the designation lifted for at least two years from the date of the original determination notice. The division will lift the designation if the firm demonstrates that: (i) it has not been awarded contracts by one or more agencies within the past three years where the total city funding from the expense and capital budgets for such contracts was equal to or greater than fifty million dollars; and (ii) it has been below the size standards established by the United States small business administration for its industry for a period of two years or more.

§ 11-83 Application Intake and Verification.

(a)  Emerging business enterprise certification applications may be obtained from, and must be returned to DSBS. DSBS will date stamp the date of receipt of a certification application upon receiving it.
  1. An applicant must submit such information or documentation as may be required by DSBS in connection with its certification as an EBE. Failure to submit such information or documentation may result in the rejection or revocation of such certification.
  2. If a certification application is received by DSBS and required documents are missing, questions are unanswered or the certification application is not properly notarized, DSBS must send to the applicant, within forty-five (45) days of the initial date stamped on the certification application, a notice of status and deficiency (the “Notice”), stating any deficiency arising from missing documents, unfinished questions or deficiencies in notarization. An applicant may cure the noticed deficiency by providing DSBS with documents or information requested in the Notice, within thirty (30) days of the date of the Notice.
  3. When the applicant cures a noticed deficiency, pursuant to procedures set forth in 66 RCNY § 11-83(c), DSBS has an additional forty-five (45) days to advise the applicant of any further deficiency which may be cured in accordance with 66 RCNY § 11-83(c).
  4. If the applicant does not cure a noticed deficiency, pursuant to procedures set forth in 66 RCNY § 11-83(c), and the certification application remains incomplete for at least forty-five (45) days of the date of the Notice, unless such time is extended by the certification director, the applicant must be sent a notice stating that its certification application has been rejected and will not be processed, together with its rejected certification application.
  5. An applicant whose certification as an EBE is rejected may not reapply for certification for at least one hundred twenty (120) days of the date of the notice of rejection of its application.
  6. Applicants may be required to consent to inquiries of their bonding companies, banking institutions, credit agencies, contractors, affiliates, clients and other entities to ascertain the applicant’s eligibility for certification. Refusal to permit such inquiries will be grounds for rejection of a certification application.
  7. All applicants and certified businesses will be subject to an audit at any time. An applicant’s or certified business’ refusal to facilitate an audit will be grounds for denial of its certification application or revocation of its certification.
  8. A certification application may be withdrawn by an applicant without prejudice at any time prior to an audit. Following the withdrawal of a certification application, the applicant may not reapply for certification for a period of at least one hundred twenty (120) days from the date of withdrawal of the application.
  9. All applicants and certified businesses may be required to provide documentation to substantiate that the business has the skill and expertise to perform in the particular area of work for which it is requesting listing or is listed on the EBE Directory.
  10. The division will conduct site visits for at least 5% of all EBE certification applications received during a fiscal year to verify that such business enterprises are eligible for certification under these rules.

§ 11-84 Notice of Determination and Right to Appeal.

(a)  The director of certification shall provide the applicant with written notice of a determination approving or denying certification.
  1. In the event certification is approved by the director of certification, the applicant will be sent a certification letter and will be certified as an EBE for five (5) years from the date of the certification letter or until notified for the need to reapply at the director of certification’s request, whichever is earlier.
  2. In the event certification is denied by the director of EBE, a written notice of such determination shall be provided to the applicant stating the reason(s) for such denial. Such notice shall also state the procedures for filing an appeal.
  3. The applicant may appeal the determination within thirty (30) days after the date of the notice denying the business enterprise’s certification. In the event that a request for an appeal is not made within the thirty (30) day period, the director of certification’s determination shall be deemed final and the applicant may not reapply for certification for two (2) years from the date of the written notice denying certification, provided, however, that if the facts and circumstances forming the basis of the denial decision have changed significantly, the applicant, at the discretion of the director of certification, may be granted permission to reapply sooner.
  4. The request for an appeal shall state the grounds upon which the denial of certification is being appealed.

§ 11-85 Appeals.

A business entity denied certification or re-certification as an EBE shall be given written notice by DSBS of the grounds for such denial and an opportunity to appeal such denial in writing to the commissioner. Such appeal or a request for an extension to file an appeal, must be received by the commissioner no later than thirty (30) days after the date of the notice denying the business enterprise’s certification or re-certification. The commissioner may extend the period in which to initiate an appeal for good cause shown. Such appeal shall include, at a minimum, a description of the reasons why the decision to deny certification or re-certification is in error and provide evidence to support its appeal. Such person shall provide such other documentation or information as is requested by the commissioner, in his or her sole discretion. The commissioner shall render a written determination no later than sixty days after receipt of the appeal, unless the time to render a determination has been extended upon agreement of the commissioner and the business enterprise. If the commissioner’s determination is not made within the prescribed sixty days after receipt of the appeal or within the agreed upon extended time period, then the appeal is deemed denied. The decision of the commissioner granting or denying such appeal shall constitute the final agency determination.

§ 11-86 Revocation of Emerging Business Enterprise Status.

(a)  A certified business must notify DSBS within forty-five (45) days of any material change in the information contained in the original certification application. A material change may include, but is not limited to, a change in any of the following: ownership; address; officers; or services provided by the certified business. If a material change occurs, a review may be conducted by DSBS and certification may be revoked. If an EBE's certification is revoked, such business enterprise may reapply for certification at any time following revocation. If a certified business fails to notify the director of EBE of such material change, the director of EBE may in his or her discretion, revoke the certification of an EBE for a period of up to five (5) years.
  1. DSBS, upon having reason to believe or upon receiving allegations indicating that a certified business enterprise is not eligible for certification as an EBE, may meet with socially and economically disadvantaged persons claiming ownership and control of the certified business and/or conduct an audit of such business enterprise, and shall take the following actions:

   (1) Determine whether the allegation can be substantiated;

   (2) Obtain in writing, if possible, the basis of any allegation from the person or persons making the allegation;

   (3) Notify a certified business in writing that its certification as an EBE is under review by the director of EBE and may be revoked. This notice shall specify the bases for such review and any facts specifically at issue; and

   (4) Provide the certified business with an opportunity to respond in writing to any allegations set forth in any notices questioning the certification status of a certified business, within thirty (30) days of the date of such notice, by personal service or certified mail, return receipt requested.

  1. If the socially and economically disadvantaged persons claiming ownership of the certified business fail to respond timely in writing to the notice of certification status review, or fail to meet with a DSBS representative or agree to an audit, the certification of the EBE may be revoked by the director of certification.
  2. The director of certification shall notify, in writing, a certified business of the revocation of its certification as an EBE within fourteen (14) days of revoking such certification. The socially and economically disadvantaged persons claiming ownership and control of a business enterprise which has had its certification as an EBE revoked may request an appeal of this decision within thirty (30) days of the date of the notice of revocation. Such appeal shall be conducted in accordance with procedures set forth in 66 RCNY § 11-84. If a request for an appeal is not made within the thirty (30) day period, the director of certification’s determination shall be final and the business enterprise may not reapply for certification for two (2) years from the date of the notice of revocation provided, however, that if the facts and circumstances forming the basis of the revocation decision have changed significantly, the business enterprise may, at the discretion of the director of certification, be granted permission to reapply sooner.
  3. If at any time DSBS has reason to believe that an applicant or certified business has willfully and knowingly provided incorrect information or made false statements, it shall refer the matter to the Department of Investigation for investigation. Falsification of any document by an applicant or a certified business may lead to the imposition of civil and criminal penalties as provided by law and contract, de-certification as an EBE and the inclusion of an advice of caution in the City Vendor Information Exchange System (“VENDEX”) database.

Subchapter F: School Bus Transportation Grant Program

§ 11-87 Definitions.

As used in this subchapter, the following terms mean:

Attendant. “Attendant” means a person employed as a school bus attendant by a company that currently has or previously had (i) a contract with the department of education or (ii) a subcontract with any company that currently has or previously had a contract with the department of edu-cation to provide transportation services for children in grades kindergarten through twelve.

Department. “Department” means the department of small business services.

Department of education. “Department of education” means the department of education of the city of New York.

Dispatcher. “Dispatcher” means a person employed as a school bus dispatcher by any company that currently has or previously had (i) a contract with the department of education or (ii) a subcontract with any company that currently has or previously had a contract with the department of education to provide transportation services for children in grades kindergarten through twelve.

Master seniority lists. “Master seniority lists” means the industry-wide lists established pursuant to contractual employee protection provisions with the department of education to provide transportation services for children in grades kindergarten through twelve.

Master seniority lists qualified employee. “Master seniority lists qualified employee” means a person who:

   (1) is a resident of the city of New York;

   (2) is certified by the department of education’s office of pupil transportation as a school bus driver or attendant, in the event such person is employed as a school bus driver or attendant;

   (3) was a school bus driver, attendant, dispatcher or mechanic on, or eligible for placement on, the master seniority lists as of June 30, 2014, or any date thereafter through June 30, 2018;

   (4) is a school bus driver, attendant, dispatcher or mechanic for a qualified employer in connection with such employer’s contract or subcontract pursuant to request for bids number B2321 with the department of education during the 2018-19 school year; and

   (5) is paid by a qualified employer a 2018-19 regular rate that is less than the regular rate dating to the placement on master seniority lists.

Mechanic. “Mechanic” means a person employed as a school bus mechanic by any company that currently has or previously had (i) a contract with the department of education or (ii) a sub-contract with any company that currently has or previously had a contract with the department of education to provide transportation services for children in grades kindergarten through twelve.

Provider of transportation services. “Provider of transportation services” means an entity or a subsidiary of such entity that (i) had a contract with the department of education or (ii) had a subcontract with any entity that had a contract with the department of education, to provide transportation services for children in grades kindergarten through twelve which expired on June 30, 2014.

Qualified employer. “Qualified employer” means any entity that has a contract with the department of education or a subcontract with an entity that has a contract with the department of education to provide transportation services for children in grades kindergarten through twelve for the 2018-19 school year pursuant to request for bids number B2321.

Regular rate. “Regular rate” means “regular rate” as defined pursuant to 29 U.S.C. § 207, and further specified in 29 C.F.R. § 778.109, or any succeeding provisions.

Regular rate dating to the placement on master seniority lists. “Regular rate dating to the placement on master seniority lists” means the regular rate of pay earned by any master seniority lists qualified employee on the last date of employment prior to being placed on, or becoming eligible for, the master seniority lists.

Recess adjustment payment. “Recess adjustment payment” means any additional compensation received for five days during winter and spring recess.

School bus driver. “School bus driver” means any person employed as a school bus driver by a company that currently has or previously had (i) a contract with the department of education or (ii) a subcontract with any company that currently has or previously had a contract with the department of education to provide transportation services for children in grades kindergarten through twelve.

Summer accrual. “Summer accrual” means any additional compensation received at or about the completion of the school year based on the years of service of the 2018 qualified employee or of the master seniority lists qualified employee.

2018 qualified employee. “2018 qualified employee” means any person who:

   (1) is a resident of the city of New York;

   (2) is certified by the department of education’s office of pupil transportation as a school bus driver or attendant, in the event such person is employed as a school bus driver or attendant;

   (3) was a school bus driver, attendant, dispatcher or mechanic employed by a provider of transportation services on June 30, 2014 in connection with such provider’s contracts with the department of education;

   (4) is a school bus driver, attendant, dispatcher or mechanic for a qualified employer in connection with such employer’s contract or subcontract pursuant to request for bids number B2321 with the department of education during the 2018-19 school year; and

   (5) is paid by a qualified employer a 2018-19 regular rate that is less than the 2013-14 regular rate.

2013-14 regular rate. “2013-14 regular rate” means the regular rate paid by any provider of transportation services to any 2018 qualified employee during the 2013-14 school year.

2018-19 regular rate. “2018-19 regular rate” means the regular rate paid by any qualified employer to any 2018 qualified employee or any master seniority lists qualified employee during the 2018-19 school year. Provided, that, for any 2018 qualified employee or master seniority lists qualified employee covered by a collective bargaining agreement or to whom a best and final offer has been imposed, the regular rate means either the hourly rate pursuant to (i) the collective bargaining agreement in effect at the time payment is due or (ii) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher.

§ 11-88 Calculation of Grants and Eligibility Criteria.

(a) The department will provide monetary grants to any qualified employer for each 2018 qualified employee hired by such qualified employer in an amount equal to the sum of:

   (i) the product of: (A) the excess, if any, of the 2013-14 regular rate over the 2018-19 regular rate; and (B) the number of hours for which such 2018 qualified employee was paid, less any hours for which such employee was paid overtime, by such qualified employer in connection with such employer’s contracts with the department of education during the 2018-19 school year; and

   (ii) the product of: (A) the excess, if any, of the 2013-14 regular rate over the 2018-19 regular rate; and (B) one-and-a-half; and (C) the number of overtime hours for which such 2018 qualified employee was paid by such qualified employer in connection with such employer’s contracts with the department of education during the 2018-19 school year; and

   (iii) such qualified employer’s portion of all legally required city, state and federal payroll taxes associated with the amounts described in paragraphs (i) and (ii) of this subdivision; and

   (iv) the costs incurred by such qualified employer to maintain the recess adjustment payment for such 2018 qualified employee in place during the 2013-14 school year, to the extent that, but for the award of this grant, the recess adjustment payment for the 2018-19 school year for such employee would have been lower than the recess adjustment payment in place during the 2013-14 school year, provided, that, for a 2018 qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the recess adjustment payment for the 2018-19 school year shall be either the recess adjustment payment pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher; and

   (v) the costs incurred by such qualified employer to maintain the payment for holiday and vacation days for such 2018 qualified employee in place during the 2013-14 school year, to the extent that, but for the award of this grant, the payment for holiday and vacation days for the 2018-19 school year for such employee would have been lower than the payment in place during the 2013-14 school year, provided, that, for a 2018 qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the payment for holiday and vacation days in place during the 2018-19 school year shall be either the payment for holiday and vacation days pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher; and

   (vi) the costs incurred by such qualified employer to maintain the payment for summer accrual for such 2018 qualified employee in place during the 2013-14 school year, to the extent that, but for the award of this grant, the payment for summer accrual for the 2018-19 school year for such employee would have been lower than the payment in place during the 2013-14 school year, provided, that, for a 2018 qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the payment for summer accrual in place during the 2018-19 school year shall be either the payment for summer accrual pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher; and

   (vii) the costs incurred by such qualified employer to maintain the contributions for the retirement and health benefits of such 2018 qualified employee in place during the 2013-14 school year, to the extent that, but for the award of this grant, the contributions for the 2018-19 school year for such employee would have been lower than those in place during the 2013-14 school year, provided, that, for a 2018 qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the contributions for the 2018-19 school year shall be either the contributions pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher; and

   (viii) the costs associated with any increase in workers’ compensation insurance for such employee associated with the amounts described in paragraphs (i) and (ii) of this subdivision.

  1. Notwithstanding any provision to the contrary in this subchapter, the department will not award a grant for any 2018 qualified employee unless:

   (i) any such 2018 qualified employee receives retirement and health benefits from the same health and retirement funds from which such employee received such benefits during the 2013-14 school year, provided that such employee is represented by the same employee organization for the 2013-14 and 2018-19 school years;

   (ii) thirty-nine weeks of employment during the school year are provided by such qualified employer to such employee, provided that a prorated portion of thirty-nine weeks of employment may be provided by such qualified employer to such employee hired after September 5, 2018; and

   (iii) the customary work day of such employee is eight hours, if the work day of such employee was eight hours during the 2013-14 school year.

  1. The department will provide monetary grants to any qualified employer for each master seniority lists qualified employee hired by such qualified employer in an amount equal to the sum of:

   (i) the product of: (A) the excess, if any, of the regular rate during the school year dating to the placement on master seniority lists over the 2018-19 regular rate; and (B) the number of hours for which such master seniority lists qualified employee was paid, less any hours for which such employee was paid overtime, by such qualified employer in connection with such employer’s contracts with the department of education during the 2018-19 school year; and

   (ii) the product of: (A) the excess, if any, of the regular rate during the school year dating to the placement on master seniority lists over the 2018-19 regular rate; and (B) one-and-a-half; and (C) the number of overtime hours for which such master seniority lists qualified employee was paid by such qualified employer in connection with such employer’s contracts with the department of education during the 2018-19 school year; and

   (iii) such qualified employer’s portion of all legally required city, state and federal payroll taxes associated with the amounts described in paragraphs (i) and (ii) of this subdivision; and

   (iv) the costs incurred by such qualified employer to maintain the recess adjustment payment for such master seniority lists qualified employee in place during the school year dating to the placement on master seniority lists, to the extent that, but for the award of this grant, the recess adjustment payment for the 2018-19 school year for such employee would have been lower than the payment in place during the school year dating to the placement on master seniority lists, provided, that, for a master seniority lists qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the recess adjustment payment for the 2018-19 school year shall be either the recess adjustment payment pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher; and

   (v) the costs incurred by such qualified employer to maintain the payment for holiday and vacation days for such master seniority lists qualified employee in place during the school year dating to the placement on master seniority lists, to the extent that, but for the award of this grant, the payment for holiday and vacation days for the 2018-19 school year for such employee would have been lower than the payment in place during the school year dating to the placement on master seniority lists, provided, that, for a master seniority lists qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the payment for holiday and vacation days in place for the 2018-19 school year shall be either the payment for holiday and vacation days pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, which-ever is higher; and

   (vi) the costs incurred by such qualified employer to maintain the payment for summer accrual for such master seniority lists qualified employee in place during the school year dating to the placement on master seniority lists, to the extent that, but for the award of this grant, the payment for summer accrual for the 2018-19 school year for such employee would have been lower than the payment in place during the school year dating to the placement on master seniority lists, provided, that, for a master seniority lists qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the payment for summer accrual in place during the 2018-19 school year shall be either the payment for summer accrual pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher; and

   (vii) the costs incurred by such qualified employer to maintain the contributions for the retirement and health benefits of such master seniority lists qualified employee in place during the school year dating to the placement on master seniority lists, to the extent that, but for the award of this grant, the contributions for the 2018-19 school year for such employee would have been lower than those in place during the school year dating to the placement on master seniority lists, provided, that, for a master seniority lists qualified employee covered by a collective bargaining agreement or, as to whom a best and final offer has been imposed, the contributions for the 2018-19 school year shall be either the contributions pursuant to (A) the collective bargaining agreement in effect at the time payment is due or (B) the best and final offer of the qualified employer for the 2018-19 school year, whichever is higher; and

   (viii) the costs associated with any increase in workers’ compensation insurance for such master seniority lists qualified employee associated with the amounts described in paragraphs (i) and (ii) of this subdivision.

  1. Notwithstanding any provision to the contrary in this subchapter, the department shall not award a grant for a master seniority lists qualified employee unless:

   (i) any such master seniority lists qualified employee receives retirement and health benefits from the same health and retirement funds from which such employee received such benefits for the school year dating to placement on master seniority lists, provided that such employee is represented by the same employee organization as of the school year dating to placement on master seniority lists and the 2018-19 school year;

   (ii) thirty-nine weeks of employment during the school year are provided by such qualified employer to such employee, provided that a pro-rated portion of thirty-nine weeks of employment may be provided by such qualified employer to such employee hired after September 5, 2018; and

   (iii) the customary work day of such employee is eight hours, if the work day of such employee was eight hours as of the last date of employment prior to being placed on master seniority lists.

  1. No qualified employer shall be eligible for an award of a grant pursuant to this section unless such qualified employer agrees that during the 2018-19 school year every school bus driver, attendant, dispatcher and mechanic shall be hired from the master seniority lists in the order of his or her seniority, provided that this requirement shall not apply to hiring by qualified employers for the 2018-19 school year that occurred prior to September 5, 2018.

§ 11-89 Notice.

Each qualified employer must provide written notice to the department upon the hiring of any 2018 qualified employee or master seniority lists qualified employee for whom the qualified employer seeks a monetary grant.

§ 11-90 Payments.

(a) The department shall provide the grant authorized by this section to qualified employers in monthly installments over a ten-month period for each 2018 qualified employee or master seniority lists qualified employee who is employed in connection with such qualified employer's contract pursuant to request for bids number B2321 with the department of education. Any such grant to the qualified employer shall be reduced if the employee is employed by such qualified employer for less than ten months.
  1. The department will provide the grant described in 66 RCNY § 11-88 in monthly installments after receiving satisfactory proof from the qualified employer that:

   (i) the qualified employer has paid the 2018 qualified employee or the master seniority lists qualified employee the amounts described in paragraphs (i) and (ii) of subdivisions a and c of 66 RCNY § 11-88 respectively; and

   (ii) the qualified employer has made payments of the amounts described in paragraphs (iii) through (viii) of subdivisions a and c of 66 RCNY § 11-88 respectively in a manner consistent with those paragraphs.

§ 11-91 Conditions of Grants.

(a) The award by the department of a grant to a qualified employer pursuant to this subchapter shall not make the city of New York, the department or the department of education the employer of any 2018 qualified employee or master seniority lists qualified employee.
  1. The grant authorized by this subchapter shall not: (i) impair the terms of any collective bargaining agreement to which any qualified employer and employee may be subject, and shall not (ii) interfere with any rights a school bus driver, attendant, dispatcher or mechanic has pursuant to any collective bargaining agreement.
  2. The qualified employer and 2018 qualified employee or master seniority lists qualified employee, as applicable, shall be solely responsible for withholding and payment of any taxes and other government required payments.

§ 11-92 Appropriations.

The total amount of the grants authorized by this subchapter shall be limited to the appropriation of funds available for this program. The department will allocate such amount based on the order of receipt by the department of the notifications required by 66 RCNY § 11-89.

§ 11-93. Withdrawal by a Qualified Employer from Grant.*

(a) A qualified employer may withdraw from continued participation in a grant awarded, pursuant to this subchapter by providing written notice of withdrawal to the department.
  1. Withdrawal from continued participation in a grant awarded, pursuant to this subchapter shall become effective immediately upon receipt of such written notice of withdrawal by the department.
  2. In the event of withdrawal from continued participation in a grant awarded, pursuant to this subchapter by a qualified employer:

   (i) the department shall not make a grant installment to such qualified employer for any cost incurred by such employer on behalf of a 2018 qualified employee or master seniority lists qualified employee after the date the department receives such written notice of withdrawal; and

   (ii) such qualified employer shall not be required to satisfy the conditions described in subdivision b or d of 66 RCNY § 11-88 with respect to a 2018 qualified employee or master seniority lists qualified employee respectively, or the condition described in subdivision e of such section with respect to any employee hired after the date the department receives such written notice of withdrawal.

*Editor’s note: The original rule numbered this as § 11-92; because that section number already existed, it has been renumbered at the discretion of the editor.

Chapter 12: Adjudications

§ 12-01 Adjudications of the Department of Business Services.

New York City Department of Business Services adjudications regarding the fitness and discipline of department employees will be conducted by the Office of Administrative Trials and Hearings. After conducting an adjudication and analyzing all testimony and other evidence, the hearing officer shall make written proposed findings of fact and recommend decisions, which shall be reviewed and finally determined by the Commissioner.

Chapter 13: [Financial Hardship Waiver of Prohibition of Use of Certain Expanded Polystyrene Items]

§ 13-01 Definitions.

As used in these rules, the following terms shall have the following meanings:

Applicant means a business or not-for-profit corporation which has applied for a financial hardship waiver.

Business means any food service establishment, mobile food commissary, or store that is not a not-for-profit corporation.

Acknowledgement Letter means the letter sent by DSBS to an applicant notifying the applicant of its pending application for a financial hardship waiver.

City means the City of New York.

Commissioner means the Commissioner of the New York City Department of Small Business Services or his or her designee or his or her successor in function.

Comparable alternative product means a product to be used by the business or not-for-profit corporation in place of an expanded polystyrene single service item prohibited by § 16-329 of the Administrative Code or any successor provision.

Day means a calendar day unless otherwise specified.

Denial or Denied means a determination by DSBS that an applicant is not eligible for a financial hardship waiver.

DSBS means the New York City Department of Small Business Services or its successor in function.

DSNY means the New York City Department of Sanitation or its successor in function.

DSNY Commissioner means the commissioner of the New York City Department of Sanitation or his/her designee or his/her successor in function.

Expanded polystyrene means blown polystyrene and expanded and extruded foams that are thermoplastic petrochemical materials utilizing a styrene monomer and processed by any number of techniques including, but not limited to, fusion of polymer spheres (expandable bead foam), injection molding, foam molding, and extrusion-blown molding (extruded foam polystyrene). Such term shall not include rigid polystyrene.

Food service establishment means a premises or part of a premises where food is provided directly to the consumer whether such food is provided free of charge or sold, and whether consumption occurs on or off the premises or is provided from a pushcart, stand or vehicle. Food service establishment shall include, but not be limited to, full-service restaurants, fast food restaurants, cafes, delicatessens, coffee shops, grocery stores, vending trucks or carts and cafeterias.

Mobile food commissary means any facility that:

   1. disposes of solid waste generated by the operation of a food service establishment that is located in or is a pushcart, stand or vehicle; or

   2. supplies potable water and food, whether pre-packaged or prepared at the mobile food commissary, and supplies non-food items.

Store means a retail or wholesale establishment other than a food service establishment.

Undue financial hardship means that an applicant has demonstrated any of the following, based on submitted financial projections:

   1. The cost of using a comparable alternative product will result in an increase of more than 5% of the business’s annual cost of operations;

   2. The increased costs will result in the elimination of at least one employee; or

   3. The increased cost will result in a reduction in annual net profit of more than 5%.

§ 13-02 Application for a Waiver.

(a) To be eligible for consideration of a financial hardship waiver, a business must:

   (1) Submit its tax returns for the most recent tax year, which must demonstrate that the business had an annual gross income of less than five hundred thousand dollars per location for such year;

   (2) Provide a list of expanded polystyrene single service items used by the business for which a waiver is sought;

   (3) Provide a list of comparable alternative products that cost more than the expanded polystyrene single service items the business currently uses;

   (4) Provide a detailed explanation of why the use of comparable alternative products creates an undue financial hardship for the business; and,

   (5) Provide any additional information related to the waiver request as requested by DSBS or DSNY.

  1. Applicants that are not-for-profit corporations must:

   (1) Submit a certificate of incorporation demonstrating that the applicant is a not-for-profit corporation;

   (2) Submit a current Form 990 filed with the Internal Revenue Service;

   (3) Provide a list of expanded polystyrene single service items used by the not-for-profit corporation for which a waiver is sought;

   (4) Provide a list of comparable alternative products that cost more than the expanded polystyrene single service items the not-for-profit corporation currently uses;

   (5) Provide a detailed explanation of why the use of comparable alternative products creates an undue financial hardship for the not-for-profit corporation; and

   (6) Provide any additional information related to the waiver request as requested by DSBS or DSNY.

§ 13-03. Waiver Determinations.

(a) Determinations by the DSBS Commissioner approving or denying an applicant's waiver request, made in consultation with the DSNY Commissioner, shall be made in writing on the basis of all the circumstances presented by the applicant.
  1. A copy of the waiver determination shall be sent to the applicant and filed with DSBS and DSNY. Such determinations shall be made available for public inspection upon request.
  2. Waivers shall be valid for twelve months from the date of determination and shall be renewable upon written application to DSBS. All determinations shall be final.
  3. Applicants receiving a denial of a waiver request may reapply after twelve months from the date of the denial of the initial application. Applicants receiving a denial of a waiver request or a renewal request shall have two months from the date of the denial to come into compliance with section 16-329 of the Administrative Code.
  4. DSBS will send applicants an acknowledgment letter notifying the applicant of receipt of its pending application for a financial hardship waiver within twenty calendar days from the date of receipt of a waiver request application. A pending application for a financial hardship waiver or application for renewal of a waiver shall be a defense to any notice of violation issued pursuant to § 16-329 Administrative Code to which such pending application relates and such notice of violation shall be dismissed.

§ 13-04. Renewals.

A business may request renewal of a waiver no later than 30 days before the termination date of the waiver. A request for renewal shall certify that there has been no material change with respect to the relevant facts or circumstances that existed at the time the initial waiver was granted. Any application submitted after the termination date or less than 30 days before the termination date of the waiver shall be treated as a new application.

Chapter 14: Neighborhood 360 Grant Program

§ 14-01 Purpose.

The objective of the Neighborhood 360 Grant program is to support the responsible growth and economic vitality of New York City commercial districts and small businesses so they can better serve the needs of a growing base of local residents, workers, and visitors. The Neighborhood 360 Grant Program will provide grant funding to eligible not-for-profit corporations working to plan, develop, and implement a variety of commercial revitalization activities that directly address locally identified community development needs in designated neighborhoods throughout New York City.

§ 14-02: Definitions.

As used in this chapter, the following terms have the following meanings:

Applicant. The term “Applicant” means any duly incorporated not-for-profit corporation that operates in New York City and that is applying individually or jointly for grants on behalf of one or more commercial districts within New York City that are located in a Designated Service Area.

Application. “Application” means a written request in a form satisfactory to DSBS, with any supporting documents, made by an Applicant to DSBS to determine the eligibility of Applicants for Neighborhood 360 Grants.

Application Review Committee. “Application Review Committee” means a committee comprised of at least three persons selected by DSBS.

Business Improvement District. “Business Improvement District” means an area of New York City in which a business improvement district has been established and is administered by a district management association pursuant to chapter 4 of title 25 of the New York City Administrative Code as required by law.

City. “City” means the City of New York.

Commercial Business. “Commercial Business” means a storefront business predominantly involved in the sale of goods and/or services directly to the public.

Commercial District Needs Assessment. “Commercial District Needs Assessment” means a customized analysis conducted by a not-for-profit corporation in coordination with DSBS of a

Commercial Revitalization Area(s). “Commercial Revitalization Area(s)”, mean(s) the designated geographic location in New York City described as the target area(s) in any Commercial Revitalization Contract(s) with DSBS and amendment(s) thereto, including Commercial Revitalization Contract(s) no longer in effect.

Commercial Revitalization Contract(s). “Commercial Revitalization Contract(s)” mean(s) any grant(s) or contract(s) with DSBS for the provision of Commercial Revitalization Activities. Commercial Revitalization Activities. “Commercial Revitalization Activities” are services, programs, and technical assistance that include, but need not be limited to, neighborhood beautification projects, supplemental sanitation and public safety services, public space activation/maintenance/management, branding/marketing campaigns, production and coordination of local events, business improvement district planning, merchant organizing, retail recruitment strategy development, minor physical improvements to the public realm, neighborhood planning, organizational development, and general program administration.

Commissioner. “Commissioner” means the commissioner of Small Business Services or his or her designee or successor in function.

DSBS. “DSBS” means the Department of Small Business Services or its successor in function.

Designated Service Area. “Designated Service Area” means an area of New York City that is eligible for Neighborhood 360 Grant funding. A Designated Service Area must be located in one or more of the following areas: (1) a Business Improvement District or a Special Assessment District; (2) a Commercial Revitalization Area; (3) an area undergoing a Rezoning that will result in a change in allowable commercial or industrial space; or (4) an area where a Commercial District Needs Assessment or a comparable comprehensive neighborhood study or plan has been completed and reviewed by DSBS.

District Management Association. “District Management Association” means an association established pursuant to § 25-414 of the New York City Administrative Code.

Fiscal year. “Fiscal Year” means the time starting July 1st and ending June 30th of the next year.

Neighborhood 360 Program. “Neighborhood 360 Program” means a program administered by DSBS in which not-for-profit corporations enter into Commercial Revitalization Contracts with DSBS to develop and implement Commercial Revitalization Activities that improve and enhance Designated Service Areas and the Commercial Businesses that are located in these Designated Service Areas. The objective of the Neighborhood 360 Program is to support the economic vitality of commercial districts across New York City by directly addressing locally identified, community development needs through the planning, development, and implementation of a

Grant. “Grant” means a grant from the Neighborhood 360 Program to a not-for-profit corporation for the costs of developing and implementing Commercial Revitalization Activities in a Designated Service Area.

Rezoning. “Rezoning” means changing the zoning designation(s) for an area on the zoning map or zoning text. A zoning map amendment is subject to the uniform land use review process, set forth in § 197-c of the New York City Charter.

Special Assessment District. “Special Assessment District” means the Jamaica Center Mall special assessment district in the borough of Queens established pursuant to Chapter 665 of the Laws of New York of 1978, as amended by Chapter 466 of the Laws of New York of 1984; or the Fulton Mall special assessment district in the borough of Brooklyn established pursuant to Chapter 911 of the Laws of New York of 1976, as amended by Chapter 17 of the Laws of New York of 1981; or the 165th Street Mall special assessment district in the borough of Queens established pursuant to Chapter 910 of the Laws of New York of 1976.

§ 14-03 General Eligibility Requirements.

Applicants must meet the following eligibility criteria:

  1. Eligible Geographic Areas.

   (1) Proposed projects must be primarily located within a Designated Service Area identified by DSBS in the Application.

  1. Eligible Recipients. To be eligible to receive grants, an Applicant must at a minimum comply with the following criteria:

   (1) Applicant must demonstrate a capability to provide Commercial Revitalization activities to a Designated Service Area and advance the goals of the Neighborhood 360 program;

   (2) Applicant must be incorporated as a not-for-profit corporation and operate, or have the authority to operate, in New York, in accordance with applicable law;

   (3) Applicant is in compliance with all applicable annual city, state and federal filing requirements that are relevant to the Applicant’s type of organization, including New York State Charities Bureau filings; and

   (4) Applicant does not owe any unpaid taxes to the City or State, is not engaged in any litigation against the City, and, along with any officers, directors or members, has demonstrated the requisite business integrity to receive public tax dollars.

  1. Eligible Activities. All eligible activities must be Commercial Revitalization Activities that generally address the Neighborhood 360 Program needs of a Designated Service Area. Eligible Commercial Revitalization Activities include, but need not be limited to, the following:

   (1) Neighborhood beautification projects (e.g. landscaping, plantings, public art);

   (2) Supplemental sanitation and public safety services (e.g. sidewalk cleaning, garbage bagging, security camera installation);

   (3) Public space activation, maintenance and management (e.g. public plazas/parks/markets);

   (4) Local branding and marketing campaigns (e.g. shop local campaigns, banners);

   (5) Production and coordination of local events (e.g. street fairs, festivals, performances, tours);

   (6) Planning for BID formation or BID boundary expansion;

   (7) Merchant organizing;

   (8) Retail recruitment and retention strategy development;

   (9) Minor physical improvements located in or on publicly owned streets, sidewalks, pathways, right of ways, parks, publicly accessible open spaces or any public facility (e.g. outdoor/street furniture and amenities, lighting, art installations);

   (10) Neighborhood planning studies;

   (11) Tracking business and neighborhood conditions;

   (12) Organizational development (e.g. governance support, strategic planning, performance measurement);

   (13) General program administration (e.g. staffing).

  1. Applicants must follow any additional eligibility requirements outlined in the Application which will be made available online at www.nyc.gov/sbs or by directly contacting DSBS.

§ 14-04 Application Requirements and Selection Criteria.

All Applicants will be evaluated and funds will be awarded each Fiscal Year by an Application Review Committee. The Application Review Committee will use the following criteria to evaluate Neighborhood 360 Grant applications:

  1. Eligibility. Eligibility shall be determined by 66 RCNY § 14-03 (General Eligibility Requirements).
  2. Need. The degree to which the Applicant’s proposed Commercial Revitalization Activities will address the needs of a Designated Service Area, to be determined by analyzing criteria demonstrated by the Applicant including, but not limited to:

   (1) Indications of inhibited commercial activity and economic inequality;

   (2) Deteriorating physical conditions of streetscapes;

   (3) Inadequate public facilities;

   (4) Rapid changes to the commercial character and uses as a result of new development and/or land use actions; or

   (5) Other needs identified by means of a Commercial District Needs Assessment or a comparable comprehensive neighborhood study or plan.

  1. Local Support and Capability as Demonstrated by Applicant.

   (1) Organizational experience and financial resources to meet contractual obligations, efficiently and effectively manage high-quality initiatives, and sustain Commercial Revitalization Activities during and beyond the term of the Grant;

   (2) Completion of a Commercial District Needs Assessment or a comparable comprehensive neighborhood study or plan;

   (3) Successful implementation of a past Commercial Revitalization contract with DSBS;

   (4) Commitment of merchants, property owners, and other local stakeholders to supporting and participating in the Neighborhood 360 program and the implementation of Commercial Revitalization Activities in a Designated Service Area;

   (5) Support of local community groups in a Designated Service Area; or

   (6) Evidence of additional financial support for the Neighborhood 360 Program and Commercial Revitalization Activities from other sources.

  1. Applicants must follow any additional, detailed Application requirements outlined in the Application which will be made available online at www.nyc.gov/sbs or by directly contacting DSBS.

§ 14-05 Program and Contract Compliance.

DSBS shall prepare a grant agreement to be executed by the Applicant and DSBS which shall stipulate terms of compliance and participation in the Neighborhood 360 Program and provide at a minimum:

  1. Relevant terms and conditions, including applicable insurance requirements;
  2. A scope of services;
  3. A budget for the eligible and awarded services;
  4. A map of the Designated Service Area;
  5. Any additional program requirements established by DSBS.

Chapter 15: Love Your Local Small Business Grant Program

§ 15-01 Purpose.

The objective of the Love Your Local Small Business Grant Program (“Grant Program” or “Program”) is to add to the City of New York’s economic development toolkit by devising and testing business-level interventions to support the survival of neighborhood businesses in New York City. The Program will incentivize participation by small businesses citywide by providing an opportunity for businesses to receive assistance to identify business challenges and recommended interventions, and, subject to appropriation, implementation funding to make suggested operational or physical changes. DSBS will collect baseline and follow-up performance data to evaluate the effectiveness of these interventions in assisting participating business in continuing to provide jobs, goods, and services in their current locations. Knowledge gained through the Program will allow DSBS to disseminate informed advice through its Business Solutions Center network and other business support and education programs, to assist small, commercial tenant businesses citywide in remaining competitive in neighborhoods experiencing rising commercial rents.

§ 15-02 Definitions.

As used in this chapter, the following terms have the following meanings:

Applicant. “Applicant” means a commercial business that is applying for this Grant.

Application. “Application” means a written request in a form satisfactory to DSBS, supplemented by all requested supporting documents, made by an Applicant to DSBS to determine the eligibility of an Applicant for a Grant.

Business Needs Assessment. “Business Needs Assessment” means a customized analysis of Applicant’s business operations, conducted by an expert in coordination with DSBS, which describes strategies for Applicants to adapt their operations to improve their businesses and increase their chances to thrive in their current locations despite changing real estate conditions.

City. “City” means the City of New York.

Business. “Business” means a sole proprietorship, partnership, corporation or other legal entity involved in the sale of goods or services directly to the public from a physical location in the City.

DSBS. “DSBS” means the Department of Small Business Services or its successor.

Fiscal year. “Fiscal Year” means the period beginning July 1st and ending June 30th of the next calendar year.

Franchise. “Franchise” means, as defined by 16 C.F.R. § 436.1, a continuing commercial relationship or arrangement, whatever it may be called, in which the terms of the offer or contract specify, or the franchise seller promises or represents, orally or in writing that: (1) the franchisee will obtain the right to operate a business that is identified or associated with the franchisor’s trademark, or to offer, sell or distribute goods, services or commodities that are identified or associated with the franchisor’s trademark; (2) the franchisor will exert or has authority to exert a significant degree of control over the franchisee’s method of operation, or provide significant assistance in the franchisee’s method of operation; and (3) as a condition of obtaining or commencing operation of the franchise, the franchisee makes a required payment or commits to make a required payment to the franchisor or its affiliate.

Grant. “Grant” means one or more disbursements from the Love Your Local Small Business Grant Program to an Applicant for the purpose of implementing recommendations made in the Business Needs Assessment.

Grant Agreement. “Grant Agreement” means a duly executed, legally binding contract between DSBS and an Applicant setting out terms and conditions for the use of grant funds.

National Retailers/Chains. “National Retailers/Chains” means a business that has at least two locations in the City and at least one location outside the City limits.

Small Business. “Small Business” means a small business as described by the United States Small Business Administration (“SBA”) pursuant to part 121 of title 13 of the Code of Federal Regulations.

§ 15-03 General Eligibility Requirements.

  1. Eligible Recipients. To be eligible for a Grant, an Applicant must satisfy the following criteria:

   1. Applicant must operate a Business;

   2. Applicant must not be in violation of any applicable federal, state, or local law, rule or regulation;

   3. Food businesses subject to inspection by the New York City Department of Health and Mental Hygiene must have an A or B letter grade;

   4. Applicant must be a small business;

   5. Applicant must have been operating in the City for a minimum of three (3) years prior to the date of the application;

   6. Applicant must not operate a Franchise, except that Franchises that the SBA has determined to be small businesses may be eligible;

   7. Applicant must rent its current location of operation from an entity or individual that is not affiliated with the Applicant, as such affiliation is defined in the City’s Vendor’s Guide to VENDEX (https://www1.nyc.gov/assets/mocs/downloads/pdf/VendorsGuideToVendex-2012_07_31.pdf);

   8. Applicant must not owe any federal, state or city taxes and must not be delinquent in payments owed to resolve judgments or liens;

   9. All required licenses or permits relating to the Applicant’s commercial business must be current;

   10. Applicant must document that within the ten (10) years prior to its Application to the Program, it has experienced at least a five percent (5%) increase in costs directly related to operating in rented commercial space. Documentation may include, but need not be limited to: lease(s), utility bills, property tax bills or cancelled checks, which reflect increased rental costs, an increased burden relating to payment of property taxes or increased utility costs at its current location; and

   11. Applicant must complete an Application. Application will be available online at www.nyc.gov/sbs and by directly contacting DSBS.

  1. Business Improvement Projects. Grants may only be used to implement recommendations from the Business Needs Assessment at the location that is the subject of the Grant. Eligible business improvement projects may include:

   1. Operational improvements to Applicant’s business;

   2. Performing outreach and interviewing prospective employees for Applicant’s business;

   3. Training Applicant’s employees;

   4. Technological updates to Applicant’s business;

   5. Physical enhancements of Applicant’s business location; or

   6. Financial management changes to Applicant’s business.

§ 15-04 Selection Criteria.

  1. Eligibility. Basic eligibility will be determined based on an Applicant’s ability to meet the requirements set forth in subdivision a of 66 RCNY § 15-03. Ineligible Applicants will be eliminated from further consideration.
  2. Preliminary Ranking. DSBS will rank all eligible Applicants using the following numerical rating scale:

   1. Business Criteria.

      (a) Number of years in operation (1 - 5 points, with 1 point for 3 - 5 years and 5 points for 12 years or longer);

      (b) Time remaining on current lease (0 - 5 points, with zero points for less than 1 year and 5 points for more than 10 years);

      (c) Amount of real estate cost increase (1 - 5 points, with 1 point for 5 - 10% and 5 points for 40% or more);

      (d) Number of employees (0 - 5 points, with zero points for 0 - 1 employees and five points for twenty or more employees);

      (e) Nomination for DSBS’ Community Cornerstone Program (1 point for nominated businesses);

      (f) National retailers/chain store(s) within a five block radius of Applicant’s business location offering the same goods or services (0 - 5 points with zero points for no nearby chain competitor and 5 points for 5 or more chain competitors); and

      (g) Neighborhood/community engagement (0 or 1 point for engagement that may include, but not be limited to, sponsoring local community projects, hosting community events, featuring local artists, musicians or performers, and/or sourcing/featuring local products or services).

   2. Neighborhood Criteria. DSBS will consult independent and current data sources to assign a score to Applicant for each of the following neighborhood criteria:

      (a) The percentage of small businesses in the neighborhood of the Applicant’s Business (1 - 3 points, with 1 point for neighborhoods where the percentage of small businesses is greater than 30% of all local businesses and 3 points for neighborhoods where the percentage of small businesses is less than 20% of all local businesses). “Small business” and “neighborhood” will have the same meanings as those terms have when used in the Association for Neighborhood Housing and Development’s Equitable Economic Development Indicators;

      (b) The number of small business loans in the neighborhood of the Applicant’s Business (1 - 3 points, with 1 point for neighborhoods determined to have a high number of small business loans (approximately 3,000 or more) and 3 points for neighborhoods determined to have a low number of small business loans (approximately 1,200 or fewer)). “Small business” and “neighborhood” will have the same meanings as those terms have when used in the Association for Neighborhood Housing and Development’s Equitable Economic Development Indicators;

      (c) The household median income in the neighborhood of the Applicant’s Business (1 - 3 points, with 1 point for neighborhoods determined to have a neighborhood household median income of approximately $60,000 per year or higher and 3 points for neighborhoods determined to have a neighborhood household median income of approximately $42,000 per year or lower). “Neighborhood” has the definition set forth in the American Community Survey;

      (d) The percentage of change in the presence of national retailers/chains in the neighborhood of the Applicant’s Business . “Neighborhood” will have the same meaning as the term has when used in the Center for an Urban Future’s annual reports on the prevalence of chain restaurants;

      (e) Neighborhood affordability (1 - 3 points, with 1 point for businesses in neighborhoods classified as high income and 3 points for neighborhoods classified as both low income and gentrifying, as defined in the Furman Center State of New York City’s Housing and Neighborhoods. “Neighborhood” will have the same meaning as the term has when used in the Gentrification Analysis of the Furman Center’s periodic reports on New York City’s housing and neighborhoods.

   3. Based on the numerical scores assigned to each Applicant, DSBS will identify the fifty Applicants with the highest scores. A tie between Applicants with the same scores will be broken by analyzing points granted for individual business criteria first, followed by neighborhood criteria. These fifty Applicants will be given an opportunity to receive an initial Business Needs Assessment. In the event that one or more of these fifty Applicants do not complete the initial Business Needs Assessment, DSBS may select replacements from the remaining ranked businesses, in order in which such businesses are ranked.

   4. Any Applicant that is not identified as being among the fifty Applicants with the highest scores will be offered other DSBS services to address its needs.

  1. Initial Business Needs Assessment.

   1. The initial Business Needs Assessment will require each Applicant to attend in-person meeting(s) with an expert advisor assigned by DSBS. The meeting(s) may take place at Applicant’s business and/or a NYC Business Solutions Center and will span a total of up to four (4) hours.

      (a) During the initial Business Needs Assessment, Applicants will be asked to provide business financial statements, and to answer questions about the business’ financial position. In addition, Applicants will be asked to rate and demonstrate their willingness to implement and make operational changes recommended by DSBS.

      (b) Businesses that fail to participate fully in the initial Business Needs Assessment or to timely provide requested documentation will be deemed ineligible for further consideration for the Program, but will be referred for other appropriate DSBS services.

   2. The following rubric will be used to complete the initial Business Needs Assessment, resulting in a score for each Applicant.

Financial Management        
The Financial Management assessment category considers the adequacy of key financial management practices and systems, and the availability of financial statements covering a time period appropriate to assess Applicant’s financial position.        
Availabilityof FinancialStatements Possible Points      
0 1 2 3  
Income statement Cannot produce 1 year or less Between 1 & 3 years More than 3 years
Balance sheet Cannot produce 1 year or less Between 1 & 3 years More than 3 years
         
Inventory Controls 0 1 2 3
Does applicant have a system or practices to accurately track inventory on a daily, weekly or monthly basis? No system or practices Existing but inadequate system or practices Existing & adequate system or practices N/A
Months of inventory reports available Less than 1 1 - 6 7 - 12 More than 12
         
Sales Tracking 0 1 2 3
Does applicant have a system or practices that accurately track sales on a daily, weekly or monthly basis? No system or practices Existing but inadequate system or practices Existing & adequate system or practices N/A
Months of sales reports available Less than 1 1 - 6 7 - 12 More than 12
         
Payroll Records 0 1 2 3
Does applicant use a payroll provider, payroll software, or other system that provides accurate records of wages, taxes, and related benefits? No system or practices Existing but inadequate system or practices Existing & adequate system or practices N/A
Months of payroll records available Less than 1 1 - 6 7 - 12 More than 12

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Financial Position        
The Financial Position assessment category considers how Applicant performs against industry standards for key financial metrics provided by expert consultants on NYC business performance and/or national standards. Information gathered during the Financial Management assessment will be analyzed and scored, as described below.        
Product Cost Possible Points      
0 5 5 10  
Divide total sales by cost of goods sold to calculate this percentage for every month over the past twelve month period, then calculate an average describing the year overall. Insufficient records to calculate one year average At financial risk = higher than 35% At competitive risk = lower than 18% Healthy = 18 - 35%
         
  0 0 1 2
Calculate the same average for all prior years for which reliable data is available and consider whether there is an upward, neutral or downward trend. Insufficient records to calculate trend Upward trend Neutral trend Downward trend
         
Labor Cost 0 5 5 10
Divide total sales by cost of labor (wages, taxes, insurance) to calculate this percentage for every month over the past twelve month period, then calculate an average describing the year overall. Insufficient records to calculate 1 year average At financial risk = higher than 35% At competitive risk = lower than 18% Healthy = 18 - 35%
         
  0 0 1 2
Calculate the same labor cost average for all prior years for which reliable data is available and consider whether there is an upward, neutral or downward trend. Insufficient records to calculate trend Upward trend Neutral trend Downward trend
         
Occupancy Cost 0 5 10 N/A
Divide total revenue by total occupancy costs (rent + real estate taxes + property insurance) to calculate this percentage for every month over the past twelve month period, then calculate an average describing the year overall. Insufficient records to calculate At financial risk – higher than 10% Healthy – 10% or lower N/A
         
Net Profit Margin 0 0 5 10
Using data from the past twelve months, subtract all costs (operating expenses, cost of goods sold, etc.) from all revenues (sales, fees, other income) to find net profit. Divide net profit by revenue to find net profit margin and compare to industry standards. Insufficient records to calculate or negative Positive & more than 50% above industry standard Positive & more than 50% below industry standard Within 50% of industry standard

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Implementation Feasibility            
The Implementation Feasibility assessment category considers the feasibility of implementing projects to improve the Applicant’s financial position. Applicant will be asked to rate its openness to make specific types of changes and asked to describe examples of past, related attempts to strengthen the business.            
  Openness Rating (OR)     Openness Demonstration (OD)    
  Unwilling or Resistant Somewhat Willing Enthusiastic Past attempt?   Total(OR x OD)
  1 2 3 Yes (x2) No (x1)  
Willingness to cut operating costs (ex: add Point of Sale system to improve inventory control, upgrade equipment to lower energy costs)            
             
Willingness to adapt existing goods & services (ex: analyze profitability of specific products services and eliminate unprofitable offerings; reduce product costs; increase prices)            
             
Willingness to try to increase profits by adding new products & services (ex: add alcohol sales, new product line or online sales)            

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   3. The twenty Applicants with the highest initial Business Needs Assessment score will be selected to receive an Intensive Business Needs Assessment and grant funding. In the event of a tie, Applicants with the highest number of years in business, in descending order, will be selected. If the number of years in business also results in a tie, Applicants with the greatest number of employees, in descending order, will be selected.

   4. In the event that one of the twenty selected Applicants does not complete an Intensive Business Needs Assessment and/or enter into a grant agreement, DSBS may select replacements from the remaining Applicants, in the order of their total scores.

§ 15-05 Intensive Business Needs Assessment.

  1. The Intensive Business Needs Assessment will provide each of the twenty selected Applicants with an expert business advisor to analyze each Applicant’s business condition with respect to operations, regulatory compliance and procedures, employees and hiring, technology, physical condition of premises and financial management. The expert business advisor will also explore the potential for changes to maximize business success and survival.
  2. Intensive Business Needs Assessments will require each Applicant to attend in-person meetings with a DSBS assigned advisor at Applicant’s business location and/or a NYC Business Solutions Center for a total of up to twenty-one (21) hours. During the intensive assessment period, each Applicant will be asked detailed questions related to their business’ real estate costs, inventory, premises, operations, marketing, staffing and other topics. An applicant that fails to participate fully in the Intensive Business Needs Assessment or to timely provide requested documentation will be dismissed from the Program and will not be eligible for the disbursement of a Grant, but may be referred for other appropriate DSBS services.
  3. The Intensive Business Needs Assessment will result in recommendations for how Applicant can improve its business and increase its chance of survival in its current location despite changing real estate conditions. Applicants who participate fully in the intensive Business Needs Assessment will receive recommended business improvement projects to implement using a Grant. The Grant must be used to implement such business improvement projects.

§ 15-06 Compliance.

DSBS shall prepare a Grant Agreement to be executed by the Applicants and DSBS. The Grant Agreement shall stipulate terms of compliance and participation in the Program and provide at a minimum:

  1. Relevant terms and conditions, including applicable insurance requirements;
  2. A list of eligible business improvement projects;
  3. A budget for the business improvement projects for which the Applicant will receive grant funds;
  4. A schedule for disbursing Grant funds;
  5. A schedule for reporting and monitoring Grant use and impact, including sharing data on job retention and creation and annual business revenues for three years following receipt of the Grant.