The New York State Department of Economic Development (or ESD, for Empire State Development), through its Division of Minority and Women's Business Development, has issued proposed regulatory amendments to its Minority- and Women-Owned Business Enterprise (MWBE) program, with particular emphasis on certification standards and practices. It is currently accepting public comments on the proposed amendments until June 29, 2026, at 5 PM (comments may be submitted to Ericka Fang for ESD at Ericka.Fang@esd.ny.gov).
The changes are various in scope and are meant to codify many practices ESD has adopted over the years as a result of addressing disputes. The amendments include: specifying that certain forms of passive investments by owners of an MWBE (other than the owner relied upon for certification) will not be considered when assessing MWBE certification, so long as the investments meet certain criteria; requiring the qualifying owner of an MWBE firm to be able to "critically evaluate" the work performed by the business and have "technical competence" in the relevant industry, while still allowing for various forms of normal business delegation; explicitly giving ESD final authority over the assignation of business codes, and specifying ESD will not assign codes for goods or services that are not "directly provided" by the MWBE; allocating the amount of "credit" a MWBE can receive on a contract when performing as a prime, subcontractor, supplier, distributor, or broker, as well as defining those terms; and requiring that MWBEs perform a "commercially useful function" to be certified, among other changes.
Find the proposed amendments on the ESD site at https://esd.ny.gov/doing-business-ny/mwbe (under "MWBE 2026 Proposed Regulatory Amendments").
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