AAC-09-10-00013-P Submission and Approval of State Authority Contracts to the Comptroller

3/3/10 N.Y. St. Reg. AAC-09-10-00013-P

NEW YORK STATE REGISTER

VOLUME XXXII, ISSUE 9

March 03, 2010

RULE MAKING ACTIVITIES

DEPARTMENT OF AUDIT AND CONTROL

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. AAC-09-10-00013-P

Submission and Approval of State Authority Contracts to the Comptroller

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Addition of Part 206 to Title 2 NYCRR.

Statutory authority:

NYS Constitution, section 5, art. X; State Finance Law, section 8(14); and Public Authorities Law, section 2879-a

Subject:

Submission and approval of State Authority Contracts to the Comptroller.

Purpose:

To set forth standards and procedures for submission and approval of State Authority contracts to the Comptroller.

Text of proposed rule:

Part 206 is added to Title 2 NYCRR as follows:

PART 206

Comptroller Approval of Contracts Made by State Authorities.

(Statutory Authority: N.Y. Const. art. X, § 5; State Finance Law § 8(14); and Public Authorities Law § 2879-a)

§ 206.1 Purpose. (a) The purpose of this Part is to set forth:

(1) the standards for the Comptroller's determination of state authority contracts and contract amendments subject to the Comptroller's approval;

(2) the criteria for the Comptroller's approval of such contracts and contract amendments;

(3) the responsibilities of state authorities with respect to the filing of exempt contracts and any amendments thereto, certain eligible contracts and certain eligible contract amendments as defined in this Part; and

(4) the procedural requirements for overall compliance with section two thousand eight hundred seventy nine-a of the Public Authorities Law.

(b) Nothing contained in this Part shall diminish, or in any way adversely affect, the Comptroller's existing authority to approve state authority contracts where such approval is otherwise required, or provided for, by law or by resolution of a state authority, including, but not limited to, contracts made "for" the State by a state authority. A contract is made "for" the State by a state authority where the state authority is entering into a contract with a third party, but the primary role of the state authority is to act on behalf of the State or a state agency. Such third-party contracts are contracts for the State and are subject to the Comptroller's approval under section one hundred twelve of the State Finance Law notwithstanding any of the thresholds or criteria contained in this Part.

§ 206.2 Definitions. For purposes of this Part:

(a) Competitive procurement shall mean a procurement where a state authority has:

(1) published notice of the procurement opportunity in the procurement opportunities newsletter where required by article 4C of the Economic Development Law or, where not required by law, in the procurement opportunities newsletter or another newspaper, journal or periodical which is reasonably designed to give notice to all vendors capable of providing the requisite product, service or work to be performed;

(2) given actual notice of the procurement opportunity to all vendors known to the state authority to be capable of providing the requisite product, service or work to be performed; and

(3) awarded the contract as a result of a balanced and fair method of evaluation and selection.

(b) Contract shall mean any written agreement including, but not limited to: any agreement for the acquisition or sale of goods or services of any kind; public work, construction, alterations, improvements to public facilities; grant contracts; revenue or concession contracts; the exchange of personal or real property; the exchange of services; or any combination thereof.

(c) Eligible contract shall mean any contract executed by a state authority on or after March 1, 2010, other than an exempt contract, where the aggregate consideration proposed for exchange may reasonably be valued in excess of one million dollars and such contract either:

(1) shall be paid in whole or in part with monies appropriated by the State; or

(2) was or shall be awarded on a single source basis, a sole source basis or pursuant to any other method of procurement that is not competitive.

(d) Eligible contract amendment shall mean:

(1) any modification to an eligible contract; or

(2) any modification to a contract entered into by a state authority where such modification was executed on or after March 1, 2010, and where the aggregate consideration under the contract as amended may reasonably be valued in excess of one million dollars and either:

(i) the contract as amended will be paid in whole or in part with monies appropriated by the State;

(ii) the contract was originally awarded on a noncompetitive basis; or

(iii) the contract was originally awarded on the basis of a competitive procurement, but the modification was not provided for in the solicitation for such competitive procurement.

(e) Executed shall mean that the contract or contract amendment has been signed by all contractors and the state authority.

(f) Exempt contract shall mean any contract or contract amendment, executed by a state authority on or after March 1, 2010, that would otherwise be an eligible contract or eligible contract amendment, but is exempt pursuant to subdivision 3 of section two thousand eight hundred seventy nine-a of the Public Authorities Law because it is:

(1) for the issuance of commercial paper or bonded indebtedness, other than contracts with the state providing for the payment of debt service subject to an appropriation;

(2) entered into by an entity established under article ten-c of the Public Authorities Law and is for:

(i) projects approved by the Department of Health or the Public Health Council in accordance with article twenty-eight, thirty-six or forty of the Public Health Law or article seven of the Social Services Law;

(ii) projects approved by the Office of Mental Health, the Office of Mental Retardation and Developmental Disabilities, or the Office of Alcoholism and Substance Abuse Services in accordance with article sixteen, thirty-one or thirty-two of the Mental Hygiene Law;

(iii) services, affiliations or joint ventures for the provision or administration of health care services or scientific research;

(iv) payment for direct health care services or goods used in the provision of health care services; or

(v) participation in group purchasing arrangements;

(3) for the procurement of goods, services or both goods and services to meet emergencies arising from unforeseen causes or to effect repairs to critical infrastructure that are necessary to avoid a delay in the delivery of critical services that could compromise the public welfare;

(4) for the purchase or sale of energy, electricity or ancillary services made by an authority on a recognized market for the goods, services or commodities in question in accordance with standard terms and conditions of purchase or sale at a market price;

(5) for the purchase, sale or delivery of power or energy, fuel, costs and services ancillary thereto, or financial products related thereto, with a term of less than five years; or

(6) for the sale or delivery of power or energy and costs and services ancillary thereto for economic development purposes pursuant to title one of article five of the Public Authorities Law or article six of the Economic Development Law.

(g) Monies appropriated by the state shall mean:

(1) monies from the state treasury or any of its funds, or any of the funds under its management pursuant to law; or

(2) the proceeds of bonds, where such bonds shall be paid in whole or in part with monies from the state treasury or any of its funds, or any of the funds under its management pursuant to law.

(h) Procurement record shall mean documentation of the decisions made and the approach taken by the state authority in the procurement process.

(i) Single source shall mean a procurement in which although two or more offerors can supply the required goods or services, the state authority, upon written findings setting forth the material and substantial reasons therefore, may award a contract or amendment to a contract to one offerer over the other.

(j) Sole source shall mean a procurement in which only one offerer is capable of supplying the required goods or services.

(k) State authority shall mean a public authority or public benefit corporation created by or existing under any law of the state of New York, with one or more of its members appointed by the governor or who serve as members by virtue of holding a civil office of the state, other than an interstate or international authority or public benefit corporation, including subsidiaries of such public authority or public benefit corporation.

(l) State Authorities Contract Submission Manual shall mean guidelines for state authorities for contract submission, created by the Office of the State Comptroller and updated as necessary.

(m) Subsidiary shall mean a corporate body or company:

(1) having more than half of its voting shares owned or held by a state authority; or

(2) having a majority of its directors, trustees or members in common with the directors, trustees or members of a state authority or as designees of a state authority.

(n) Written determination shall mean notification provided in writing either in paper or electronic format of the Comptroller's final approval or rejection of any contract submitted for approval by a state authority.

(o) Written notice shall mean notification provided in writing either in paper or electronic format.

§ 206.3 Annual Reporting Requirement. (a) No later than 30 days before the end of the state authority's fiscal year, each state authority shall submit to the Office of the State Comptroller a report, in such form as prescribed by the Comptroller, which includes a description of every eligible contract and eligible contract amendment which the state authority reasonably anticipates entering into in the following fiscal year.

(b) The description for each anticipated contract or contract amendment specified in the report shall include, but not be limited to, the following elements:

(1) the purpose of the contract or contract amendment;

(2) the anticipated value of the contract or contract amendment;

(3) whether it is anticipated that the contract will be awarded on a competitive basis, and, if not, the basis upon which the contract will be awarded;

(4) the anticipated date for the release of the solicitation, if applicable, or execution of the contract or contract amendment; and

(5) the source of funding for the contract or contract amendment.

(c) The state authority shall provide written notice to the Office of the State Comptroller of any significant change in, or addition to, the information provided in the reports submitted by the state authority pursuant to this section. Such written notice shall be submitted no later than seven days after the state authority has identified the need for such significant change or addition.

§ 206.4 Determination of eligible contracts and eligible contract amendments subject to the Comptroller's approval.

(a)(1) The Comptroller shall periodically determine which eligible contracts and eligible contract amendments shall be subject to the Comptroller's approval.

(2) Once the Comptroller has determined that any eligible contract, eligible contract amendment, category of eligible contracts or category of eligible contract amendments shall be subject to approval by the Comptroller, the Comptroller shall provide written notice of such determination to the affected state authorities.

(3) Such written notice shall include instructions for submitting any such contracts or contract amendments and the period of time during which the state authority is required to submit the contracts and/or contract amendments.

(4) Where the Comptroller has provided written notice pursuant to this section and, where a state authority is subject to the publication requirements contained in article 4C of the Economic Development Law and believes that an eligible contract described in the notice is exempt from such requirements under subdivision (1)(a) of section 144 of such law, the state authority must obtain the Comptroller's approval for such exemption.

(b) The Comptroller's determination of which eligible contracts or eligible contract amendments shall be subject to his or her approval may include, but shall not be limited to, consideration of one or more the following criteria:

(1) number and dollar value of contracts entered into, or anticipated to be entered into, by the state authority;

(2) past practices of the state authority with respect to its contracting or procurement process as identified by audits performed by regulating bodies including, but not limited to, the Office of the State Comptroller;

(3) the types of contracts entered into by the state authority;

(4) the presence or absence of competition in the procurement process;

(5) the level of financial risk posed by the state authority's contracts;

(6) any potential liability for the State posed by the state authority's contracts;

(7) the content and adequacy of the state authority's existing procurement guidelines; and

(8) the state authority's compliance with the provisions in section 206.7 regarding the filing of exempt contracts, certain eligible contracts and certain eligible contract amendments.

§ 206.5 Submission of contracts or contract amendments subject to the Comptroller's approval. (a) Every state authority shall, upon execution of any contract or contract amendment described in a written notice issued pursuant to section 206.4(a), promptly submit to the Comptroller for approval each such contract or contract amendment, for the duration stated in the notice, along with the complete procurement record. A copy of all such contracts and contract amendments shall be retained on file with the Office of the State Comptroller. Such submission should conform to the guidelines set forth in the State Authorities Contract Submission Manual. The Comptroller also reserves the right to request submission of additional materials that are relevant to the Comptroller's review and approval.

(b) For each contract or contract amendment required to be submitted to the Comptroller, the state authority shall include a certification in the procurement record that it has undertaken an affirmative review of the responsibility of any business entity (vendor, contractor or offeror), including significant subcontractors, to which they propose to make a contract award. Such review shall be designed to provide reasonable assurances that the proposed contractor and significant subcontractors are responsible and shall be documented in the procurement record.

(c) Where the Comptroller has provided written notice pursuant to section 206.4 (a), the state authority shall include in each contract or contract amendment described in such notice a clause providing that the contract or contract amendment is subject to the Comptroller's approval before such contract or contract amendment may become valid and enforceable.

(d) The Comptroller shall have ninety days to issue a written determination with respect to the approval or rejection of each contract or contract amendment submitted for approval. Such ninety day period shall begin upon receipt of the contract or contract amendment, including all required documentation, by the Office of the State Comptroller. No contract or contract amendment submitted to the Comptroller shall become valid and enforceable until such contract or contract amendment has been approved by the Comptroller; provided, however, that if the Comptroller has not issued a written determination within the ninety day period, such contract or contract amendment shall become valid and enforceable without approval by the Comptroller. In the event that the state authority resubmits a contract or contract amendment previously returned by the Comptroller, the Comptroller shall have ninety days from the receipt of such resubmitted contract or contract amendment to issue a written determination.

(e) The Comptroller reserves the right to require state authorities to transmit all or part of the procurement record electronically according to standards developed by the Comptroller.

§ 206.6 Criteria for approval of a contract or contract amendment. The Comptroller's determination as to whether to approve a contract or contract amendment submitted for approval shall include, but not limited to, consideration of the following criteria:

(a) for all contracts and contract amendments:

(1) compliance with all applicable laws;

(2) the responsibility of the proposed contractor;

(3) the reasonableness of the state authority's procurement procedures and, if applicable, compliance with such procedures; and

(4) the reasonableness of the result;

(b) for single source and sole source contracts, or any contract or contract amendment awarded pursuant to any other method of procurement that is not competitive:

(1) the justification for not utilizing a competitive procurement; and

(2) the reasonableness of the selection of the contractor, the cost and the terms of the contract or contract amendment. The procurement record for such contracts or contract amendments shall include: the justification for not using a competitive procurement; the basis for selecting the contractor, including the alternatives considered; and the basis upon which the state authority determined the cost was reasonable; and

(c) for competitive procurements:

(1) the adequacy of the efforts made to provide notice of the contract opportunity;

(2) the reasonableness of the product specifications, requirements or work to be performed;

(3) the reasonableness of the methodology for evaluating bids, proposals or other offers; and

(4) the state authority's fair application of the established methodology for evaluating bids, proposals or other offers. The procurement record for competitive contracts shall demonstrate a competitive field by providing, at a minimum, a clear statement of the required specifications or work to be performed, a fair and equal opportunity for offerers to submit responsive offers and a balanced and fair method of evaluation and selection.

§ 206.7 Filing requirements for exempt contracts, certain eligible contracts and certain eligible contract amendments.

(a)(1) A state authority shall file with the Office of the State Comptroller:

(i) a copy of any exempt contract;

(ii) a copy of any subsequent amendments thereto; and

(iii) an explanation of why such contract or contract amendment is exempt from the Comptroller's approval.

(2) When an exempt contract or an exempt contract amendment is entered into in order to meet an emergency, the state authority shall document in the explanation the nature of the emergency giving rise to the procurement.

(3) Copies of such exempt contracts, exempt contract amendments and the related explanation shall be filed within sixty day after the execution of such exempt contract or exempt contract amendment.

(b)(1) A state authority shall also file with the Office of the State Comptroller a copy of any eligible contract or eligible contract amendment entered into by the state authority for which the Comptroller has not provided notice pursuant to section 206.4(a).

(2) Copies of such eligible contracts or eligible contract amendments shall be filed within sixty days after their execution.

(3) In addition, where an eligible contract amendment filed pursuant to this section modifies a contract that was not previously filed with the Office of the State Comptroller, the state authority shall also include a copy of the original contract and any prior amendments thereto.

(c) The filing of any contracts or contract amendments pursuant to this section should conform to the guidelines for submission set forth in the State Authorities Contract Submission Manual.

Text of proposed rule and any required statements and analyses may be obtained from:

Sara Kenney, Esq., Office of the State Comptroller, 110 State Street, Albany, New York 12236, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Jamie Elacqua, Esq., Office of the State Comptroller, 110 State Street, Albany, New York 12236, [phone], email: [e-mail]

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory Authority: New York State Constitution article X section 5 states that the "accounts" of public corporations shall be subject to the supervision of the state Comptroller. In addition, State Finance Law section 8(14) authorizes the Comptroller to adopt rules and regulations in order to carry out the duties of his or her Office. Furthermore, Public Authorities Law section 2879-a specifically requires the Comptroller to promulgate rules and regulations as necessary to carry out his or her responsibilities under this section. Public Authorities Law section 2879-a directs state authorities to submit certain contracts to the Comptroller for approval where the Comptroller determines that his or her constitutional supervision of the accounts of such state authorities requires such prior review and approval.

2. Legislative Objectives: These rules will further the goals and policies set forth in the newly added Public Authorities Law section 2879-a; specifically, to provide oversight of the operations and finances of state authorities, and to promote greater transparency and accountability in the way that state authorities conduct business.

3. Needs and Benefits: The rules are necessary to promote the legislative objective of providing greater oversight of the operations and finances of state authorities and to comply with the requirement in Public Authorities Law section 2879-a that the Comptroller issue regulations with respect to certain matters. While Public Authorities Law section 2879-a makes clear that the Comptroller may require certain categories of state authority contracts to be approved prior to becoming effective, these rules provide the procedural framework within which state authorities can comply with the new legal mandate. Specifically, these rules set forth the definitions and procedures necessary to implement this new requirement, including, as required by section 2879-a, the standards for determining the contracts subject to the Comptroller's approval and the criteria for approval of such contracts. The rules also provide for the filing with the Comptroller of exempt contracts and certain other contracts that were not approved by the Comptroller.

These rules will detail and streamline the process by which state authorities are able to comply with Public Authorities Law section 2879-a. Without these rules, state authorities subject to the law would be unaware of what materials they were required to submit to the Comptroller, in what manner they were to submit such materials, and the criteria by which they could obtain approval from the Comptroller. Moreover, these rules will provide notice to private businesses who currently contract with state authorities, or seek to do so in the future, that such state authority contracts may be subject to a new procedural framework and approval process.

4. Costs: (a) Costs to regulated parties. Costs to state authorities will be modest. Implementation will require procedural changes for transmitting the required contract documents and reports to the Office of the State Comptroller. This transmittal may also require state authorities to utilize systems developed by the Office of the State Comptroller, which may accommodate electronic submission of required documents. It is expected that these requirements can be met with existing resources with little additional costs.

(b) Costs to the agency. The Office of the State Comptroller will be required to develop protocols for the selection of contracts or categories of contracts for audit, develop and implement audit protocols, create documents which explain procedural instructions and requirements, develop or enhance automated systems, develop mechanisms for filing contracts which are exempt from review but are still required to be filed, and provide training to state authorities to facilitate the implementation of these rules. The Office of the State Comptroller has already taken steps to realign existing contract procedures to begin implementing its responsibilities under Public Authorities Law section 2879-a. It is expected that additional resources will be required to carry out such responsibilities upon full implementation of this new law. There will be no costs imposed on other state agencies or local governments.

5. Local Government Mandates: Public Authorities Law section 2879-a governs only state authorities, not local authorities. Where a state authority is entering into a contract with a local government, the contract may be subject to review and approval by the Comptroller, and the state authority is required to include in any such contract a clause providing that it is subject to the Comptroller's approval before it may become valid and enforceable. Beyond this limited situation, there will be no impact on local governments.

6. Paperwork: The rules require state authorities to file a new report with the Office of the State Comptroller, on an annual basis, to identify contracts eligible for Comptroller approval that the state authority reasonably anticipates entering into in the coming fiscal year. This is to assist state auditors in determining which contracts will be subject to the Comptroller's review. Additionally, the rules direct state authorities to submit all original contracts along with the complete procurement record to the Office of the State Comptroller for approval, where the state authority has received notice from the State Comptroller, as expanded upon below, that such contracts require prior approval. The procurement record consists of full documentation of the decisions made and the approach taken in the procurement process.

Next, the Comptroller is required to send written notice to the state authority of the categories of contracts that the Comptroller determines are subject to his or her approval. Such notification will also include instructions for submitting the contracts and the period of time during which the state authority is required to submit the contracts. Following the Comptroller's review, the Comptroller must also issue a written determination of the final approval or rejection of any contract submitted for approval.

Finally, for contracts that are specifically exempted from the Comptroller's approval under subdivision 3 of Public Authorities Law section 2879-a, state authorities must file copies of any such contract and any subsequent amendments thereto with the Office of the State Comptroller, and must also file an explanation of why such contract is exempt. Additionally, with respect to "eligible contracts" and "eligible contract amendments" that the Comptroller did not require be submitted for approval, the regulations require that state authorities file an executed copy of the contract and/or contract amendment with the Comptroller. Wherever possible, the Office of the State Comptroller will employ electronic means to receive and file documents.

7. Duplication: The Office of the State Comptroller is already authorized to review and approve contracts of certain state authorities, either pursuant to law or at the request of the state authority. The regulations expressly provide that the regulations do not diminish or impair such existing authority. As a result, in any case where such authority otherwise exists, the provisions in the regulations relating to the approval of certain state authority contracts will have no application, and therefore, there is no duplication. Accordingly, these rules will neither overlap nor conflict with contract submissions already made by state authorities.

Next, with respect to the annual reporting requirement contained in these rules, some public authorities are already required to report financial information and procurement activity (see 2 NYCRR 201.2). However, those requirements only apply to the "procurement contracts" of certain public authorities and only require such reporting on a retrospective basis (see Public Authorities Law § 2879[2]; 2 NYCRR 201.1[b]; 2 NYCRR 201.2[e]). These proposed rules impose an additional obligation upon the state authority to report on a prospective basis on all expected "eligible contracts," as defined by the rules based on criteria in Public Authorities Law section 2879-a. Pursuant to Public Authorities Law section 2879-a, the range of contracts and contract amendments that are "eligible" for the Comptroller's approval extends beyond procurement contracts and, therefore, this additional reporting requirement is necessary to fully assess what contracts and contract amendments should be subject to the Comptroller's review. Also, requiring state authorities to report on a prospective basis under these rules is crucial to the Comptroller's determination of which contracts should be subject to review.

8. Alternatives: None.

9. Federal Standards: None.

10. Compliance Schedule: It is expected that all state authorities should comply immediately upon the adoption of these rules.

Regulatory Flexibility Analysis

1. Effect of rule: Pursuant to section 2979-a of the Public Authorities Law, this rule will govern certain contracts of state authorities, including contracts with local governments or small businesses. Where a state authority enters into a contract or contract amendment with a local government or small business, and the contract or amendment is subject to review and approval by the Comptroller, such contract or amendment shall not become enforceable until the Comptroller's approval is given, or after the expiration of ninety days where the Comptroller has failed to give approval or disapproval. The state authority is required to include a clause in the contract or amendment providing that it is subject to the Comptroller's approval before it may become valid and enforceable in order to give notice to the local government or small business. Additionally, the rule provides for the procedures governing the submission of such contracts, the factors the Comptroller will consider in determining which contracts will be subject to review and approval, and the factors the Comptroller will consider in determining whether to approve such contracts. The rule also requires that state authorities files certain documents and reports with the Comptroller. Thus, the primary impact is on the state authorities, not local governments or small businesses, and, in any event, as noted below, such impact should be modest. The number of small businesses and local governments that may be affected cannot be determined at this time. This is an expansion of oversight responsibilities for the Comptroller's Office. Until the Office of the State Comptroller begins to receive the affected state contracts the Office of the State Comptroller will be unable to speculate what percentage of state authority contracts are entered into with small businesses and local governments.

2. Compliance requirements: The rule will require that certain "eligible contracts" and "eligible contract amendments" as defined by the rule, entered into by a state authority be approved by the Comptroller prior to the contract becoming enforceable. Additionally, state authorities will be required to file with the Comptroller all "eligible contracts" and "eligible contract amendments" for which the Comptroller has not given notice that prior approval is required, and contracts and amendments exempt from the Comptroller's approval as identified in subdivision 3 of section 2879-a of the Public Authorities Law. Finally, state authorities will be required to file a report with the Comptroller prior to the beginning of a new fiscal year listing projected eligible contracts to be entered into in the new fiscal year. No compliance requirements will be passed on to a small business or local government.

3. Professional services: There are no professional services that a small business or local government is likely to need to comply with the rule.

4. Compliance costs: There are no initial capital costs or annual costs for small businesses or local governments to comply with these rules.

5. Economic and technological feasibility: Since there are no compliance requirements imposed upon small businesses or local governments there is no need to conduct an assessment of economic and technological feasibility of compliance with such rule.

6. Minimizing adverse impact: No adverse impact is anticipated for small businesses or local governments. This conclusion was reached because the rule requires state authorities, not small businesses or local governments, to take action. The sole effect, as stated above, will be that any contract or contract amendment subject to the Comptroller's approval that a small business is a party to will not be effective until the Comptroller gives his or her approval, or if ninety days have elapsed since submission to the Comptroller, and the Comptroller has failed to issue a determination. Accordingly, none of the approaches for minimizing adverse economic impact suggested in SAPA section 202-b(1) were considered.

7. Small business and local government participation: In order to ensure small businesses and local governments have an opportunity to participate in the rule making process, a press release will be issued and posted on the Comptroller's website regarding this proposed rule.

Rural Area Flexibility Analysis

1. Types of and numbers of rural areas: Since certain state authorities serve the needs of the public on a state-wide basis, including rural areas, and may contract with vendors on a statewide basis, including vendors in rural areas, it is estimated that this rule will affect every rural area within the State.

2. Reporting, recordkeeping and other compliance requirements; and professional services: State authorities must forward certain contracts and contract amendments, defined as "eligible contracts" and "eligible contract amendments" by the proposed rules, upon notification from the Comptroller, to the Comptroller for his final approval. Along with the contracts and contract amendments, the state authority must forward the procurement record. Further, a state authority must file executed contracts and contract amendments that are "eligible contracts" and "eligible contract amendments" that the Comptroller has not given notice to the state authority that such contracts or contract amendments are subject to his prior review and approval, and any contracts and contract amendments that are defined as "exempt" from the Comptroller's approval pursuant to Public Authorities Law section 2879-a(3). Exempt contracts and contract amendments must also contain a brief explanation as to why they are exempt. These requirements will primarily impact the state authorities and it is not anticipated that any professional services will be necessary to complete these submissions. Additionally, state authorities will be expected to file with the Comptroller prior to the beginning of a new fiscal year a report listing anticipated eligible contracts to be entered into in the new fiscal year.

3. Costs: Costs to state authorities will be modest. Implementation will require procedural changes for transmitting the required contract documents and reports to the Office of the State Comptroller. This transmittal may also require Public Authorities to utilize systems developed by the Office of the State Comptroller, which may accommodate electronic submission of required documents. It is expected that these requirements can be met with existing resources with little additional costs.

4. Minimizing adverse impact: There is no anticipated adverse impact upon rural areas, therefore none of the approaches suggested by SAPA section 202-bb(2) were considered.

5. Rural area participation: In order to ensure rural areas have an opportunity to participate in the rule making process a press release will be issued and posted on the Comptroller's website regarding this proposed rule.