By Turner of Harris H.B. No. 2310
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to contracts between governmental entities and certain
1-3 disadvantaged businesses; providing a civil penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. DEFINITIONS. In this Act:
1-6 (1) "Contractor" means a person who submits a bid for
1-7 a public contract. The term includes a general contractor, a prime
1-8 contractor, and a subcontractor.
1-9 (2) "Disadvantaged business" has the meaning assigned
1-10 by Section 1.02, State Purchasing and General Services Act (Article
1-11 601b, Vernon's Texas Civil Statutes). In addition, for the purpose
1-12 of this Act, the owners of a disadvantaged business must
1-13 participate in the control, operation, and management in a manner
1-14 proportionate to their ownership so that the business is clearly
1-15 controlled by the socially disadvantaged owners.
1-16 (3) "Governmental entity" means a state agency or
1-17 political subdivision of this state.
1-18 (4) "Person" means an individual, partnership,
1-19 association, corporation, or other private legal entity.
1-20 (5) "Political subdivision" means a county,
1-21 municipality, school district, or other special district or
1-22 authority of this state.
1-23 (6) "Public contract" means a purchasing contract or
2-1 public works contract awarded by a governmental entity.
2-2 (7) "State agency" means a board, commission, office,
2-3 department, or other agency in the executive, judicial, or
2-4 legislative branch of state government. The term includes an
2-5 institution of higher education as defined by Section 61.003,
2-6 Education Code.
2-7 SECTION 2. APPLICATION. This Act applies to each public
2-8 contract entered into by a governmental entity and a contractor in
2-9 which the contractor claims to be a disadvantaged business.
2-10 SECTION 3. PROHIBITED ACT. A contractor may not claim
2-11 disadvantaged business status in bidding on a public contract
2-12 unless the contractor meets the definition of a disadvantaged
2-13 business and that contractor will personally execute the terms of
2-14 the contract.
2-15 SECTION 4. SPECIFIC REQUIREMENTS. To qualify as a
2-16 contractor claiming disadvantaged business status under this Act:
2-17 (1) the general contractor will perform all of the
2-18 estimating and contract administration functions with the employees
2-19 of that contractor;
2-20 (2) subcontractors will perform all of their work of
2-21 their trade with their own employees, or, if the subcontractor uses
2-22 an employee leasing firm for the purpose of providing salary and
2-23 benefit administration, with employees who in all other respects
2-24 are supervised and perform on the job as if they were employees of
2-25 the subcontractor; and
3-1 (3) a prime contractor who intends to subcontract
3-2 specific trades may do so if the dollar value of the subcontracts
3-3 does not exceed 75 percent of the original value of the contract,
3-4 and all work in the trade of the prime contractor is accomplished
3-5 by employees of that contractor, or, if the prime contractor uses
3-6 an employee leasing firm for the purposes of salary and benefit
3-7 administration, with employees who in all other respects are
3-8 supervised and perform on the job as if they were employees of the
3-9 prime contractor.
3-10 SECTION 5. CIVIL PENALTY. (a) The attorney general or a
3-11 district, county, or city attorney may institute an action in
3-12 district court to recover a civil penalty against a person who
3-13 claims disadvantaged business status and the general contractor who
3-14 knowingly contracts with a person claiming the disadvantaged
3-15 business status in violation of Section 3 of this Act.
3-16 (b) A civil penalty assessed under this section may not
3-17 exceed $1,000 for each violation and may not exceed $100,000, in
3-18 aggregate, for all violations arising from a single action. Each
3-19 day of violation constitutes a separate violation for purposes of
3-20 penalty assessment.
3-21 (c) A civil penalty recovered in an action brought by the
3-22 attorney general shall be deposited in the state treasury. A civil
3-23 penalty recovered in an action brought by a political subdivision
3-24 shall be deposited in the general fund of that political
3-25 subdivision.
4-1 (d) A civil penalty under this section is in addition to any
4-2 other criminal, civil, or administrative penalty assessed by this
4-3 state or a political subdivision to which a person in violation of
4-4 Section 3 of this Act may be liable.
4-5 SECTION 6. EFFECTIVE DATE; SAVING PROVISION. This Act takes
4-6 effect September 1, 1993, and applies only to a public contract
4-7 that is entered into on or after that date. A public contract
4-8 entered into before September 1, 1993, is governed by the law in
4-9 effect on the date that the contract was entered into, and the
4-10 former law is continued in effect for that purpose.
4-11 SECTION 7. EMERGENCY. The importance of this legislation
4-12 and the crowded condition of the calendars in both houses create an
4-13 emergency and an imperative public necessity that the
4-14 constitutional rule requiring bills to be read on three several
4-15 days in each house be suspended, and this rule is hereby suspended.