BILL ANALYSIS

Senate Research Center	H.B. 2194
88R21063 SRA-D	By: Ordaz et al. (Hughes)
	Business & Commerce
	5/2/2023
	Engrossed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

In 2020, the Reshoring Institute surveyed Americans and found that nearly 70 percent of the respondents said they prefer American-made products. Slightly more than 83 percent said they would pay up to 20 percent more for products made domestically. Thanks to the "Made in USA" labelling program, Americans are easily able to identify these products. The State of Texas does not have such a program, resulting in missed opportunities to boost sales of local businesses and deter misleading labels.

Without a labeling standard, it is unclear what products are made in Texas, or what criteria were used by a business to come to that determination. Additionally, it is beneficial for businesses with goods primarily made in Texas to have a recognizable term identifying their Texas-made products. With a clear standard in place, Texans will recognize and support these products.

H.B. 2194 seeks to address this need by requiring the Texas Economic Development and Tourism Office to establish and administer a "Made in Texas" labeling program that provides criteria to determine whether a person may sell, advertise, or offer for sale a product with "Made in Texas" or equivalent phrasing to represent that the product was made in whole or in substantial part in Texas and by providing for a civil penalty for a related violation.

H.B. 2194 amends current law relating to establishing a "Made in Texas" labeling program and authorizes a civil penalty.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Economic Development and Tourism Office in SECTION 1 (Section 490D.051, Government Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subtitle F, Title 4, Government Code, by adding Chapter 490D, as follows:

CHAPTER 490D.� "MADE IN TEXAS" LABELING PROGRAM

SUBCHAPTER A.� GENERAL PROVISIONS

Sec. 490D.001. DEFINITIONS. Defines "office" and "program."

SUBCHAPTER B. "MADE IN TEXAS" LABELING PROGRAM

Sec. 490D.051. ESTABLISHMENT OF "MADE IN TEXAS" LABELING PROGRAM. (a) Requires the Texas Economic Development and Tourism Office (office) to establish and administer a "Made in Texas" labeling program.

(b) Requires the office, in establishing the program, by rule to:

(1)� establish criteria for determining whether a person is authorized to sell, advertise, or offer for sale in this state a product that uses "Made in Texas" or equivalent phrasing to represent that the product was made in whole or in substantial part in this state; and

(2)� design and administer the use of a logo for products to be labeled as "Made in Texas" and adopt an application process for authorizing use of the logo.

(c) Requires that the criteria established under Subsection (b)(1) include a requirement that all or virtually all significant parts and processing of a product originated in this state.

Sec. 490D.052.� EXEMPT PRODUCTS.� Provides that this chapter does not apply to or authorize the office to adopt rules governing the labeling of wine.

SUBCHAPTER C.� ENFORCEMENT

Sec. 490D.101.� VIOLATION.� Provides that a person violates this chapter if the person:�

(1)� uses, reproduces, or distributes the logo designed by the office under Section 490D.051(b)(2) without the consent of the office; or

(2)� violates a rule adopted by the office under Section 490D.051(b).

Sec. 490D.102.� OPPORTUNITY TO CURE.� Requires the attorney general, if the attorney general has reason to believe a person has violated Section 490D.101, to provide written notice to the person that:

(1)� describes the person's violation;

(2)� states that the person may be liable for a civil penalty if the person does not cure the violation before the 30th day after the date the person receives the notice; and

(3)� includes the maximum potential civil penalty that is authorized to be imposed for the violation.

Sec. 490D.103.� CIVIL PENALTY; INJUNCTIVE RELIEF.� (a)� Provides that a person who violates Section 490D.101 following a cure period described by Section 490D.102 is liable to this state for a civil penalty not to exceed $1,000 for each violation.

(b)� Authorizes the attorney general to bring an action in the name of the state to:

(1)� recover a civil penalty under this section; or

(2)� restrain or enjoin the person from violating Section 490D.101.

(c)� Authorizes the action to be brought in a district court in:

(1)� Travis County; or

(2)� a county in which any part of the violation or threatened violation occurs.

(d)� Requires that a civil penalty collected under this section be deposited in the state treasury to the credit of the general revenue fund.

Sec. 490D.104.� AMOUNT OF CIVIL PENALTY.� (a)� Provides that each day that a violation continues may be considered a separate violation for purposes of a civil penalty under this subchapter.

(b)� Requires that the amount of a civil penalty be based on:

(1)� the seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation;

(2)� the history of previous violations;

(3)� the amount necessary to deter a future violation;

(4)� efforts by the person to correct the violation;� and

(5)� any other matter that justice may require.

SECTION 2. Effective date: September 1, 2023.