By: Wilson H.B. No. 1062
73R4242 DWS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to purchases by utilities from certain disadvantaged
1-3 businesses.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article V, Public Utility Regulatory Act (Article
1-6 1446c, Vernon's Texas Civil Statutes), is amended by adding Section
1-7 36A to read as follows:
1-8 Sec. 36A. (a) A utility shall ensure that small businesses
1-9 receive at least 25 percent of the value of the total purchases of
1-10 goods and services that the utility makes. The utility shall
1-11 divide the purchases into contract units of economically feasible
1-12 production runs to promote offers from small businesses. In
1-13 designating purchases the utility shall:
1-14 (1) vary the included purchases so that a variety of
1-15 goods and services produced by different small businesses are
1-16 obtained; and
1-17 (2) designate small business purchases in a manner
1-18 that will encourage proportional distribution of awards among the
1-19 geographical regions served by the utility. To promote the
1-20 geographical distribution of small business purchases, the utility
1-21 may designate a portion of the small business purchases for bidders
1-22 from a specified postal zip code zone or other geographical region
1-23 specified by the utility. The failure of the utility to designate
1-24 a purchase does not prohibit small businesses from seeking the
2-1 purchase.
2-2 (b) The commission shall adopt rules defining "small
2-3 business" for purposes of this section. The definition shall
2-4 recognize the differences among industries caused by the size of
2-5 the market for goods or services and the relative size and market
2-6 share of the competitors operating in those markets and shall
2-7 establish different size standards for various types of businesses.
2-8 The definition of "small business" in Section 481.101, Government
2-9 Code, applies to this section until the commission adopts rules
2-10 with a new definition.
2-11 (c) The utility shall establish a program for purchasing
2-12 goods and services from small targeted group businesses. The
2-13 program shall attempt to ensure, for each category of goods or
2-14 services purchased, that the percentage of purchasing from each
2-15 type of small targeted group business is proportional to the
2-16 representation of that targeted group business among all businesses
2-17 in the area served by the utility.
2-18 (d) The commission shall develop a program for designating
2-19 small targeted group businesses. The commission shall designate a
2-20 business as a small targeted group business if it is majority owned
2-21 and operated by women, persons with a disability, or specific
2-22 minorities and the commission determines that there is a
2-23 statistical disparity between the percentage of purchasing by
2-24 utilities from businesses owned by such persons and from other
2-25 businesses in the state. The commission shall review its
2-26 designation of small targeted group businesses every two years and
2-27 may revoke or extend a designation. In addition to those
3-1 designations, a business may be designated as a small targeted
3-2 group business if the commission determines that inclusion is
3-3 necessary to remedy discrimination against the owner based on race,
3-4 gender, or disability.
3-5 (e) If a small targeted group business is capable of
3-6 performing a purchase contract contemplated by a utility, the
3-7 utility shall make the purchase from the small targeted group
3-8 business unless the price offered by the small targeted group
3-9 business is more than six percent greater than the lowest price
3-10 offered by a capable business that is not a small targeted group
3-11 business. If more than one small targeted group business qualifies
3-12 under this subsection, the utility shall make the purchase from the
3-13 capable small targeted group business offering the lowest price.
3-14 (f) The utility, as a condition of entering a construction
3-15 contract or a contract for consultant, professional, or technical
3-16 services, shall require the prime contractor to subcontract a
3-17 portion of the contract, determined by standards established by
3-18 commission rule, to small targeted group businesses. The
3-19 commission shall establish a procedure for granting waivers from
3-20 the subcontracting requirement if qualified small targeted group
3-21 businesses are not reasonably available. The utility shall
3-22 establish financial penalties, under standards established by
3-23 commission rule, for prime contractors who fail to meet the
3-24 requirements. The subcontracting requirements of this subsection
3-25 do not apply to a prime contractor that is a small targeted group
3-26 business.
3-27 (g) The commission shall designate a business as located in
4-1 an economically disadvantaged area if:
4-2 (1) it is located in an area of the state in which the
4-3 aggregate family income is less than 70 percent of the aggregate
4-4 family income for the state;
4-5 (2) it is located in an area designated as an urban
4-6 renewal area under Chapter 374, Local Government Code; or
4-7 (3) it is a rehabilitation facility or work activity
4-8 program.
4-9 (h) The commission may designate an area as an economically
4-10 disadvantaged area if the commission determines that the
4-11 designation would further the purposes of this section. A small
4-12 business is eligible for the economically disadvantaged area
4-13 preference if the owner of the business resides or is employed in a
4-14 designated area. The commission shall review its determinations
4-15 annually.
4-16 (i) If a business from an economically disadvantaged area is
4-17 capable of performing a purchase contract contemplated by a
4-18 utility, the utility shall make the purchase from that business
4-19 unless the price offered by that business is more than four percent
4-20 greater than the lowest price offered by a capable business that is
4-21 not from an economically disadvantaged area. If more than one
4-22 business from an economically disadvantaged area qualifies under
4-23 this subsection, the utility shall make the purchase from the
4-24 capable business from an economically disadvantaged area offering
4-25 the lowest price.
4-26 (j) At least 75 percent of the value of the subcontracts
4-27 awarded to small targeted group businesses under Subsection (f) of
5-1 this section must be performed by the business to which the
5-2 subcontract is awarded or by another small targeted group business.
5-3 (k) The utility shall submit to the commission an annual
5-4 report on the implementation of this section. The report must
5-5 include the following information:
5-6 (1) the total dollar value and number of purchases
5-7 from small businesses and the total number of small businesses from
5-8 which purchases were made;
5-9 (2) the total dollar value and number of purchases
5-10 from small targeted group businesses, the total number and value
5-11 of these purchases from each type of small targeted group business
5-12 in each purchasing category, and the percentages of the total
5-13 utility purchasing for each purchasing category the figures
5-14 represent; and
5-15 (3) the total dollar value and number of purchases
5-16 from small businesses in economically disadvantaged areas, the
5-17 total number and value of these purchases from each business and to
5-18 all businesses within each economically disadvantaged area in each
5-19 purchasing category, and the percentages of the total utility
5-20 purchasing for each purchasing category the figures represent.
5-21 SECTION 2. Article IV, Gas Utility Regulatory Act (Article
5-22 1446e, Vernon's Texas Civil Statutes), is amended by adding Section
5-23 4.11 to read as follows:
5-24 Sec. 4.11. PURCHASES FROM DISADVANTAGED BUSINESSES. (a) A
5-25 utility shall ensure that small businesses receive at least 25
5-26 percent of the value of the total purchases of goods and services
5-27 that the utility makes. The utility shall divide the purchases
6-1 into contract units of economically feasible production runs to
6-2 promote offers from small businesses. In designating purchases
6-3 the utility shall:
6-4 (1) vary the included purchases so that a variety of
6-5 goods and services produced by different small businesses are
6-6 obtained; and
6-7 (2) designate small business purchases in a manner
6-8 that will encourage proportional distribution of awards among the
6-9 geographical regions served by the utility. To promote the
6-10 geographical distribution of small business purchases, the utility
6-11 may designate a portion of the small business purchases for bidders
6-12 from a specified postal zip code zone or other geographical region
6-13 specified by the utility. The failure of the utility to designate
6-14 a purchase does not prohibit small businesses from seeking the
6-15 purchase.
6-16 (b) The commission shall adopt rules defining "small
6-17 business" for purposes of this section. The definition shall
6-18 recognize the differences among industries caused by the size of
6-19 the market for goods or services and the relative size and market
6-20 share of the competitors operating in those markets and shall
6-21 establish different size standards for various types of businesses.
6-22 The definition of "small business" in Section 481.101, Government
6-23 Code, applies to this section until the commission adopts rules
6-24 with a new definition.
6-25 (c) The utility shall establish a program for purchasing
6-26 goods and services from small targeted group businesses. The
6-27 program shall attempt to ensure, for each category of goods or
7-1 services purchased, that the percentage of purchasing from each
7-2 type of small targeted group business is proportional to the
7-3 representation of that targeted group business among all businesses
7-4 in the area served by the utility.
7-5 (d) The commission shall develop a program for designating
7-6 small targeted group businesses. The commission shall designate a
7-7 business as a small targeted group business if it is majority owned
7-8 and operated by women, persons with a disability, or specific
7-9 minorities and the commission determines that there is a
7-10 statistical disparity between the percentage of purchasing by
7-11 utilities from businesses owned by such persons and from other
7-12 businesses in the state. The commission shall review its
7-13 designation of small targeted group businesses every two years and
7-14 may revoke or extend a designation. In addition to those
7-15 designations, a business may be designated as a small targeted
7-16 group business if the commission determines that inclusion is
7-17 necessary to remedy discrimination against the owner based on race,
7-18 gender, or disability.
7-19 (e) If a small targeted group business is capable of
7-20 performing a purchase contract contemplated by a utility, the
7-21 utility shall make the purchase from the small targeted group
7-22 business unless the price offered by the small targeted group
7-23 business is more than six percent greater than the lowest price
7-24 offered by a capable business that is not a small targeted group
7-25 business. If more than one small targeted group business qualifies
7-26 under this subsection, the utility shall make the purchase from the
7-27 capable small targeted group business offering the lowest price.
8-1 (f) The utility, as a condition of entering a construction
8-2 contract or a contract for consultant, professional, or technical
8-3 services, shall require the prime contractor to subcontract a
8-4 portion of the contract, determined by standards established by
8-5 commission rule, to small targeted group businesses. The
8-6 commission shall establish a procedure for granting waivers from
8-7 the subcontracting requirement if qualified small targeted group
8-8 businesses are not reasonably available. The utility shall
8-9 establish financial penalties, under standards established by
8-10 commission rule, for prime contractors who fail to meet the
8-11 requirements. The subcontracting requirements of this subsection
8-12 do not apply to a prime contractor that is a small targeted group
8-13 business.
8-14 (g) The commission shall designate a business as located in
8-15 an economically disadvantaged area if:
8-16 (1) it is located in an area of the state in which the
8-17 aggregate family income is less than 70 percent of the aggregate
8-18 family income for the state;
8-19 (2) it is located in an area designated as an urban
8-20 renewal area under Chapter 374, Local Government Code; or
8-21 (3) it is a rehabilitation facility or work activity
8-22 program.
8-23 (h) The commission may designate an area as an economically
8-24 disadvantaged area if the commission determines that the
8-25 designation would further the purposes of this section. A small
8-26 business is eligible for the economically disadvantaged area
8-27 preference if the owner of the business resides or is employed in a
9-1 designated area. The commission shall review its determinations
9-2 annually.
9-3 (i) If a business from an economically disadvantaged area is
9-4 capable of performing a purchase contract contemplated by a
9-5 utility, the utility shall make the purchase from that business
9-6 unless the price offered by that business is more than four percent
9-7 greater than the lowest price offered by a capable business that is
9-8 not from an economically disadvantaged area. If more than one
9-9 business from an economically disadvantaged area qualifies under
9-10 this subsection, the utility shall make the purchase from the
9-11 capable business from an economically disadvantaged area offering
9-12 the lowest price.
9-13 (j) At least 75 percent of the value of the subcontracts
9-14 awarded to small targeted group businesses under Subsection (f) of
9-15 this section must be performed by the business to which the
9-16 subcontract is awarded or by another small targeted group business.
9-17 (k) The utility shall submit to the commission an annual
9-18 report on the implementation of this section. The report must
9-19 include the following information:
9-20 (1) the total dollar value and number of purchases
9-21 from small businesses and the total number of small businesses from
9-22 which purchases were made;
9-23 (2) the total dollar value and number of purchases
9-24 from small targeted group businesses, the total number and value of
9-25 these purchases from each type of small targeted group business in
9-26 each purchasing category, and the percentages of the total utility
9-27 purchasing for each purchasing category the figures represent; and
10-1 (3) the total dollar value and number of purchases
10-2 from small businesses in economically disadvantaged areas, the
10-3 total number and value of these purchases from each business and to
10-4 all businesses within each economically disadvantaged area in each
10-5 purchasing category, and the percentages of the total utility
10-6 purchasing for each purchasing category the figures represent.
10-7 SECTION 3. Subchapter E, Chapter 13, Water Code, is amended
10-8 by adding Section 13.141 to read as follows:
10-9 Sec. 13.141. PURCHASES FROM DISADVANTAGED BUSINESSES. (a)
10-10 A utility shall ensure that small businesses receive at least 25
10-11 percent of the value of the total purchases of goods and services
10-12 that the utility makes. The utility shall divide the purchases
10-13 into contract units of economically feasible production runs to
10-14 promote offers from small businesses. In designating purchases the
10-15 utility shall:
10-16 (1) vary the included purchases so that a variety of
10-17 goods and services produced by different small businesses are
10-18 obtained; and
10-19 (2) designate small business purchases in a manner
10-20 that will encourage proportional distribution of awards among the
10-21 geographical regions served by the utility. To promote the
10-22 geographical distribution of small business purchases, the utility
10-23 may designate a portion of the small business purchases for bidders
10-24 from a specified postal zip code zone or other geographical region
10-25 specified by the utility. The failure of the utility to designate
10-26 a purchase does not prohibit small businesses from seeking the
10-27 purchase.
11-1 (b) The commission shall adopt rules defining "small
11-2 business" for purposes of this section. The definition shall
11-3 recognize the differences among industries caused by the size of
11-4 the market for goods or services and the relative size and market
11-5 share of the competitors operating in those markets and shall
11-6 establish different size standards for various types of businesses.
11-7 The definition of "small business" in Section 481.101, Government
11-8 Code, applies to this section, until the commission adopts rules
11-9 with a new definition.
11-10 (c) The utility shall establish a program for purchasing
11-11 goods and services from small targeted group businesses. The
11-12 program shall attempt to ensure, for each category of goods or
11-13 services purchased, that the percentage of purchasing from each
11-14 type of small targeted group business is proportional to the
11-15 representation of that targeted group business among all businesses
11-16 in the area served by the utility.
11-17 (d) The commission shall develop a program for designating
11-18 small targeted group businesses. The commission shall designate a
11-19 business as a small targeted group business if it is majority owned
11-20 and operated by women, persons with a disability, or specific
11-21 minorities and the commission determines that there is a
11-22 statistical disparity between the percentage of purchasing by
11-23 utilities from businesses owned by such persons and from other
11-24 businesses in the state. The commission shall review its
11-25 designation of small targeted group businesses every two years and
11-26 may revoke or extend a designation. In addition to those
11-27 designations, a business may be designated as a small targeted
12-1 group business if the commission determines that inclusion is
12-2 necessary to remedy discrimination against the owner based on race,
12-3 gender, or disability.
12-4 (e) If a small targeted group business is capable of
12-5 performing a purchase contract contemplated by a utility, the
12-6 utility shall make the purchase from the small targeted group
12-7 business unless the price offered by the small targeted group
12-8 business is more than six percent greater than the lowest price
12-9 offered by a capable business that is not a small targeted group
12-10 business. If more than one small targeted group business qualifies
12-11 under this subsection, the utility shall make the purchase from the
12-12 capable small targeted group business offering the lowest price.
12-13 (f) The utility, as a condition of entering a construction
12-14 contract or a contract for consultant, professional, or technical
12-15 services, shall require the prime contractor to subcontract a
12-16 portion of the contract, determined by standards established by
12-17 commission rule, to small targeted group businesses. The
12-18 commission shall establish a procedure for granting waivers from
12-19 the subcontracting requirement if qualified small targeted group
12-20 businesses are not reasonably available. The utility shall
12-21 establish financial penalties, under standards established by
12-22 commission rule, for prime contractors who fail to meet the
12-23 requirements. The subcontracting requirements of this subsection
12-24 do not apply to a prime contractor that is a small targeted group
12-25 business.
12-26 (g) The commission shall designate a business as located in
12-27 an economically disadvantaged area if:
13-1 (1) it is located in an area of the state in which the
13-2 aggregate family income is less than 70 percent of the aggregate
13-3 family income for the state;
13-4 (2) it is located in an area designated as an urban
13-5 renewal area under Chapter 374, Local Government Code; or
13-6 (3) it is a rehabilitation facility or work activity
13-7 program.
13-8 (h) The commission may designate an area as an economically
13-9 disadvantaged area if the commission determines that the
13-10 designation would further the purposes of this section. A small
13-11 business is eligible for the economically disadvantaged area
13-12 preference if the owner of the business resides or is employed in a
13-13 designated area. The commission shall review its determinations
13-14 annually.
13-15 (i) If a business from an economically disadvantaged area is
13-16 capable of performing a purchase contract contemplated by a
13-17 utility, the utility shall make the purchase from that business
13-18 unless the price offered by that business is more than four percent
13-19 greater than the lowest price offered by a capable business that is
13-20 not from an economically disadvantaged area. If more than one
13-21 business from an economically disadvantaged area qualifies under
13-22 this subsection, the utility shall make the purchase from the
13-23 capable business from an economically disadvantaged area offering
13-24 the lowest price.
13-25 (j) At least 75 percent of the value of the subcontracts
13-26 awarded to small targeted group businesses under Subsection (f) of
13-27 this section must be performed by the business to which the
14-1 subcontract is awarded or by another small targeted group business.
14-2 (k) The utility shall submit to the commission an annual
14-3 report on the implementation of this section. The report must
14-4 include the following information:
14-5 (1) the total dollar value and number of purchases
14-6 from small businesses and the total number of small businesses from
14-7 which purchases were made;
14-8 (2) the total dollar value and number of purchases
14-9 from small targeted group businesses, the total number and value of
14-10 these purchases from each type of small targeted group business in
14-11 each purchasing category, and the percentages of the total utility
14-12 purchasing for each purchasing category the figures represent; and
14-13 (3) the total dollar value and number of purchases
14-14 from small businesses in economically disadvantaged areas, the
14-15 total number and value of these purchases from each business and to
14-16 all businesses within each economically disadvantaged area in each
14-17 purchasing category, and the percentages of the total utility
14-18 purchasing for each purchasing category the figures represent.
14-19 SECTION 4. (a) This Act applies only to a purchase made on
14-20 or after January 1, 1994.
14-21 (b) Before January 1, 1994:
14-22 (1) the Public Utility Commission of Texas shall adopt
14-23 rules under Section 36A, Public Utility Regulatory Act (Article
14-24 1446c, Vernon's Texas Civil Statutes), as added by this Act;
14-25 (2) the Railroad Commission of Texas shall adopt rules
14-26 under Section 4.11, Gas Utility Regulatory Act (Article 1446e,
14-27 Vernon's Texas Civil Statutes), as added by this Act; and
15-1 (3) the Texas Water Commission shall adopt rules under
15-2 Section 13.141, Water Code, as added by this Act.
15-3 SECTION 5. This Act takes effect September 1, 1993.
15-4 SECTION 6. The importance of this legislation and the
15-5 crowded condition of the calendars in both houses create an
15-6 emergency and an imperative public necessity that the
15-7 constitutional rule requiring bills to be read on three several
15-8 days in each house be suspended, and this rule is hereby suspended.