1-1 By: Turner of Harris (Senate Sponsor - West) H.B. No. 2310
1-2 (In the Senate - Received from the House May 17, 1993;
1-3 May 19, 1993, read first time and referred to Committee on State
1-4 Affairs; May 26, 1993, reported favorably by the following vote:
1-5 Yeas 8, Nays 0; May 26, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Harris of Dallas x
1-9 Rosson x
1-10 Carriker x
1-11 Henderson x
1-12 Leedom x
1-13 Lucio x
1-14 Luna x
1-15 Nelson x
1-16 Patterson x
1-17 Shelley x
1-18 Sibley x
1-19 West x
1-20 Whitmire x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to contracts between governmental entities and certain
1-24 disadvantaged businesses; providing a civil penalty.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. DEFINITIONS. In this Act:
1-27 (1) "Contractor" means a person who submits a bid for
1-28 a public contract. The term includes a general contractor, a prime
1-29 contractor, and a subcontractor.
1-30 (2) "Disadvantaged business" has the meaning assigned
1-31 by Section 1.02, State Purchasing and General Services Act (Article
1-32 601b, Vernon's Texas Civil Statutes). In addition, for the purpose
1-33 of this Act, the owners of a disadvantaged business must
1-34 participate in the control, operation, and management in a manner
1-35 proportionate to their ownership so that the business is clearly
1-36 controlled by the socially disadvantaged owners.
1-37 (3) "Governmental entity" means a state agency or
1-38 political subdivision of this state.
1-39 (4) "Person" means an individual, partnership,
1-40 association, corporation, or other private legal entity.
1-41 (5) "Political subdivision" means a county,
1-42 municipality, school district, or other special district or
1-43 authority of this state.
1-44 (6) "Public contract" means a purchasing contract or
1-45 public works contract awarded by a governmental entity.
1-46 (7) "State agency" means a board, commission, office,
1-47 department, or other agency in the executive, judicial, or
1-48 legislative branch of state government. The term includes an
1-49 institution of higher education as defined by Section 61.003,
1-50 Education Code.
1-51 SECTION 2. APPLICATION. This Act applies to each public
1-52 contract entered into by a governmental entity and a contractor in
1-53 which the contractor claims to be a disadvantaged business.
1-54 SECTION 3. PROHIBITED ACT. A contractor may not claim
1-55 disadvantaged business status in bidding on a public contract
1-56 unless the contractor meets the definition of a disadvantaged
1-57 business and that contractor will personally execute the terms of
1-58 the contract.
1-59 SECTION 4. SPECIFIC REQUIREMENTS. To qualify as a
1-60 contractor claiming disadvantaged business status under this Act:
1-61 (1) the general contractor will perform all of the
1-62 estimating and contract administration functions with the employees
1-63 of that contractor;
1-64 (2) subcontractors will perform all of their work of
1-65 their trade with their own employees, or, if the subcontractor uses
1-66 an employee leasing firm for the purpose of providing salary and
1-67 benefit administration, with employees who in all other respects
1-68 are supervised and perform on the job as if they were employees of
2-1 the subcontractor; and
2-2 (3) a prime contractor who intends to subcontract
2-3 specific trades may do so if the dollar value of the subcontracts
2-4 does not exceed 75 percent of the original value of the contract,
2-5 and all work in the trade of the prime contractor is accomplished
2-6 by employees of that contractor, or, if the prime contractor uses
2-7 an employee leasing firm for the purposes of salary and benefit
2-8 administration, with employees who in all other respects are
2-9 supervised and perform on the job as if they were employees of the
2-10 prime contractor.
2-11 SECTION 5. CIVIL PENALTY. (a) The attorney general or a
2-12 district, county, or city attorney may institute an action in
2-13 district court to recover a civil penalty against a person who
2-14 claims disadvantaged business status and the general contractor who
2-15 knowingly contracts with a person claiming the disadvantaged
2-16 business status in violation of Section 3 of this Act.
2-17 (b) A civil penalty assessed under this section may not
2-18 exceed $1,000 for each violation and may not exceed $100,000, in
2-19 aggregate, for all violations arising from a single action. Each
2-20 day of violation constitutes a separate violation for purposes of
2-21 penalty assessment.
2-22 (c) A civil penalty recovered in an action brought by the
2-23 attorney general shall be deposited in the state treasury. A civil
2-24 penalty recovered in an action brought by a political subdivision
2-25 shall be deposited in the general fund of that political
2-26 subdivision.
2-27 (d) A civil penalty under this section is in addition to any
2-28 other criminal, civil, or administrative penalty assessed by this
2-29 state or a political subdivision to which a person in violation of
2-30 Section 3 of this Act may be liable.
2-31 SECTION 6. EFFECTIVE DATE; SAVING PROVISION. This Act takes
2-32 effect September 1, 1993, and applies only to a public contract
2-33 that is entered into on or after that date. A public contract
2-34 entered into before September 1, 1993, is governed by the law in
2-35 effect on the date that the contract was entered into, and the
2-36 former law is continued in effect for that purpose.
2-37 SECTION 7. EMERGENCY. The importance of this legislation
2-38 and the crowded condition of the calendars in both houses create an
2-39 emergency and an imperative public necessity that the
2-40 constitutional rule requiring bills to be read on three several
2-41 days in each house be suspended, and this rule is hereby suspended.
2-42 * * * * *
2-43 Austin,
2-44 Texas
2-45 May 26, 1993
2-46 Hon. Bob Bullock
2-47 President of the Senate
2-48 Sir:
2-49 We, your Committee on State Affairs to which was referred H.B.
2-50 No. 2310, have had the same under consideration, and I am
2-51 instructed to report it back to the Senate with the recommendation
2-52 that it do pass and be printed.
2-53 Harris of
2-54 Dallas, Chairman
2-55 * * * * *
2-56 WITNESSES
2-57 No witnesses appeared on H.B. No. 2310.