By: West, Royce S.B. No. 224
73R3406 CAE-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to historically underutilized businesses and to certain
1-3 requirements for loan guarantees for export businesses and rural
1-4 economic development.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. The heading of Subchapter G, Chapter 481,
1-7 Government Code, is amended to read as follows:
1-8 SUBCHAPTER G. <SMALL BUSINESS> ASSISTANCE FOR HISTORICALLY
1-9 UNDERUTILIZED BUSINESSES
1-10 SECTION 2. Section 481.101(1), Government Code, is amended
1-11 to read as follows:
1-12 (1) "Historically underutilized business"
1-13 <"Disadvantaged business"> means:
1-14 (A) a corporation formed for the purpose of
1-15 making a profit in which at least 51 percent of all classes of the
1-16 shares of stock or other equitable securities is owned by one or
1-17 more persons who are socially disadvantaged because of their
1-18 identification as members of certain groups, including black
1-19 Americans, Hispanic Americans, women, Asian Pacific Americans, and
1-20 American Indians, who have suffered the effects of discriminatory
1-21 practices or similar insidious circumstances over which they have
1-22 no control;
1-23 (B) a sole proprietorship formed for the purpose
1-24 of making a profit that is 100 percent owned, operated, and
2-1 controlled by a person described by Paragraph (A) of this
2-2 subdivision;
2-3 (C) a partnership formed for the purpose of
2-4 making a profit in which 51 percent of the assets and interest in
2-5 the partnership is owned by one or more persons described by
2-6 Paragraph (A) of this subdivision. Those persons must have
2-7 proportionate interest in the control, operation, and management of
2-8 the partnership's affairs;
2-9 (D) a joint venture in which each entity in the
2-10 joint venture is a historically underutilized <disadvantaged>
2-11 business under this subdivision; <or>
2-12 (E) a supplier contract between a historically
2-13 underutilized <disadvantaged> business under this subdivision and a
2-14 prime contractor under which the historically underutilized
2-15 <disadvantaged> business is directly involved in the manufacture or
2-16 distribution of the supplies or materials or otherwise warehouses
2-17 and ships the supplies; or
2-18 (F) a small business.
2-19 SECTION 3. Sections 481.103 and 481.107, Government Code,
2-20 are amended to read as follows:
2-21 Sec. 481.103. Duties. (a) The office shall:
2-22 (1) examine the role of small and historically
2-23 underutilized <disadvantaged> businesses in the state's economy and
2-24 the contribution of small and historically underutilized
2-25 <disadvantaged> businesses in generating economic activity,
2-26 expanding employment opportunities, promoting exports, stimulating
2-27 innovation and entrepreneurship, and bringing new and untested
3-1 products and services to the marketplace;
3-2 (2) serve as the principal advocate in the state on
3-3 behalf of small and historically underutilized <disadvantaged>
3-4 businesses and provide advice in the consideration of
3-5 administrative requirements and legislation that affect small and
3-6 historically underutilized <disadvantaged> businesses;
3-7 (3) evaluate the effectiveness of efforts of state
3-8 agencies and other entities to assist small and historically
3-9 underutilized <disadvantaged> businesses and make appropriate
3-10 recommendations to assist the development and strengthening of
3-11 small and historically underutilized <disadvantaged> business
3-12 enterprise;
3-13 (4) identify specific instances in which regulations
3-14 inhibit small and historically underutilized <disadvantaged>
3-15 business development and to the extent possible identify
3-16 conflicting state policy goals;
3-17 (5) determine the availability of financial and other
3-18 resources to small and historically underutilized <disadvantaged>
3-19 businesses and recommend methods for:
3-20 (A) increasing the availability of equity
3-21 capital and other forms of financial assistance to small and
3-22 historically underutilized <disadvantaged> businesses;
3-23 (B) generating markets for the goods and
3-24 services of small and historically underutilized <disadvantaged>
3-25 businesses;
3-26 (C) providing more effective education,
3-27 training, and management and technical assistance to small and
4-1 historically underutilized <disadvantaged> businesses; and
4-2 (D) providing assistance to small and
4-3 historically underutilized <disadvantaged> businesses in complying
4-4 with federal, state, and local laws;
4-5 (6) describe the reasons for small and historically
4-6 underutilized <disadvantaged> business successes and failures,
4-7 ascertain the related factors that are particularly important in
4-8 this state, and recommend actions for increasing the success rate
4-9 of small and historically underutilized <disadvantaged> businesses;
4-10 (7) serve as a focal point for receiving complaints
4-11 and suggestions concerning state government policies and activities
4-12 that affect small and historically underutilized <disadvantaged>
4-13 businesses;
4-14 (8) assist with the resolution of problems among state
4-15 agencies and small and historically underutilized <disadvantaged>
4-16 businesses;
4-17 (9) develop and advocate proposals for changes in
4-18 state policies and activities that adversely affect small and
4-19 historically underutilized <disadvantaged> businesses;
4-20 (10) provide to legislative committees and state
4-21 agencies information on the effects of proposed policies or actions
4-22 that affect small and historically underutilized <disadvantaged>
4-23 businesses;
4-24 (11) enlist the assistance of public and private
4-25 agencies, businesses, and other organizations in disseminating
4-26 information about state programs and services that benefit small
4-27 and historically underutilized <disadvantaged> businesses and
5-1 information regarding means by which small and historically
5-2 underutilized <disadvantaged> businesses can use those programs and
5-3 services;
5-4 (12) provide information and assistance relating to
5-5 establishing, operating, or expanding small and historically
5-6 underutilized <disadvantaged> businesses;
5-7 (13) establish and operate a statewide toll-free
5-8 telephone service providing small and historically underutilized
5-9 <disadvantaged> businesses with ready access to the services
5-10 offered by the office;
5-11 (14) identify sources of financial assistance for
5-12 small and historically underutilized <disadvantaged> businesses,
5-13 match small and historically underutilized <disadvantaged>
5-14 businesses with sources of financial assistance, and assist small
5-15 and historically underutilized <disadvantaged> businesses with the
5-16 preparation of applications for loans from governmental or private
5-17 sources;
5-18 (15) sponsor meetings, to the extent practicable in
5-19 cooperation with public and private educational institutions, to
5-20 provide training and disseminate information beneficial to small
5-21 and historically underutilized <disadvantaged> businesses;
5-22 (16) assist small and historically underutilized
5-23 <disadvantaged> businesses in their dealings with federal, state,
5-24 and local governmental agencies and provide information regarding
5-25 governmental requirements affecting small and historically
5-26 underutilized <disadvantaged> businesses;
5-27 (17) perform research, studies, and analyses of
6-1 matters affecting the interests of small and historically
6-2 underutilized <disadvantaged> businesses;
6-3 (18) develop and implement programs to encourage
6-4 governmental agencies, public sector business associations, and
6-5 other organizations to provide useful services to small and
6-6 historically underutilized <disadvantaged> businesses;
6-7 (19) use available resources within the state, such as
6-8 small business development centers, educational institutions, and
6-9 nonprofit associations, to coordinate the provision of management
6-10 and technical assistance to small and historically underutilized
6-11 <disadvantaged> businesses in a systematic manner;
6-12 (20) publish newsletters, brochures, and other
6-13 documents containing information useful to small and historically
6-14 underutilized <disadvantaged> businesses;
6-15 (21) identify successful small and historically
6-16 underutilized <disadvantaged> business assistance programs provided
6-17 by other states and determine the feasibility of adapting those
6-18 programs for implementation in this state;
6-19 (22) establish an outreach program to make the
6-20 existence of the office known to small and historically
6-21 underutilized <disadvantaged> businesses and potential clients
6-22 throughout the state;
6-23 (23) adopt rules necessary to carry out this
6-24 subchapter;
6-25 (24) identify potential business opportunities for
6-26 small and historically underutilized <disadvantaged> businesses in
6-27 the border region and develop programs to maximize those
7-1 opportunities;
7-2 (25) identify potential business opportunities for
7-3 small and historically underutilized <disadvantaged> businesses in
7-4 rural areas of this state and develop programs to maximize those
7-5 opportunities; and
7-6 (26) perform any other functions necessary to carry
7-7 out the purposes of this subchapter.
7-8 (b) The department may provide community-based services to
7-9 carry out its duties under this chapter, including the creation of
7-10 a pilot program to evaluate the merits of locating full-time
7-11 personnel outside the Austin headquarters. This pilot program will
7-12 give first preference to serving economically distressed areas,
7-13 rural areas, or historically underutilized <disadvantaged>
7-14 businesses or assisting development of specific industries. The
7-15 department may require areas served by these personnel to provide
7-16 in-kind or cash contributions as necessary to support these
7-17 personnel. A report will be submitted to the legislature
7-18 describing the effectiveness of this method for delivering services
7-19 from the department to address specific economic needs.
7-20 (c) The office by rule shall identify and list the groups in
7-21 this state the members of which have suffered the effects of
7-22 discriminatory practices or similar insidious circumstances over
7-23 which they have no control.
7-24 (d) The office shall contract with a private entity to
7-25 conduct a study of the historically underutilized businesses in the
7-26 state and prepare a report of its findings. The report must
7-27 include information by each group identified under Subsection (c).
8-1 The information shall be collected, reviewed, and periodically
8-2 updated, and a report shall be made to the governor and the
8-3 legislature before February 1 of each odd-numbered year.
8-4 Sec. 481.107. CONTRACTS AWARDED TO SMALL OR HISTORICALLY
8-5 UNDERUTILIZED <DISADVANTAGED> BUSINESSES. Each state agency shall
8-6 keep statistical data and other records on the number of contracts
8-7 awarded by the agency to small or historically underutilized
8-8 <disadvantaged> businesses.
8-9 SECTION 4. Section 481.059(d), Government Code, is amended
8-10 to read as follows:
8-11 (d) A loan guarantee or loan under this section may not be
8-12 for less than $10,000 or a lesser amount prescribed by department
8-13 rule or more than $350,000 <$1 million>. The department may not
8-14 guarantee more than 95 <90> percent of a loan by a private lender.
8-15 The department may not provide a guarantee or make a loan for a
8-16 project unless the business involved provides at least five <10>
8-17 percent of the total cost of the project. The department shall
8-18 require each loan guaranteed under this section to be secured by
8-19 appropriate collateral and may require the acquisition of insurance
8-20 from the Export-Import Bank of the United States.
8-21 SECTION 5. Section 481.078(f), Government Code, is amended
8-22 to read as follows:
8-23 (f) The corporation shall make a good faith effort to assist
8-24 historically underutilized <disadvantaged> businesses to receive at
8-25 least 35 <10> percent of the total value of each construction
8-26 contract award for construction and the purchase of supplies,
8-27 materials, services, and equipment that the corporation expects to
9-1 make in connection with the issuance of bonds and any lease, sale,
9-2 and loan agreement made under this section by the corporation. The
9-3 corporation shall annually report to the legislature and the
9-4 governor on the level of historically underutilized <disadvantaged>
9-5 business participation as it pertains to the corporation's
9-6 contracts. This report shall include recommendations for the
9-7 improvement of historically underutilized <disadvantaged> business
9-8 opportunities with the corporation. "Historically underutilized
9-9 <Disadvantaged> business" means a historically underutilized
9-10 <disadvantaged> business as defined by Section 481.101 <1.02, State
9-11 Purchasing and General Services Act (Article 601b, Vernon's Texas
9-12 Civil Statutes)>.
9-13 SECTION 6. Section 481.084, Government Code, is amended by
9-14 amending Subsections (a) and (c) and adding Subsection (g) to read
9-15 as follows:
9-16 (a) The department shall use money in the fund to guarantee
9-17 not more than 95 <90> percent of a loan made by a private lender or
9-18 to make loans to fund a project. For each guarantee the department
9-19 shall determine:
9-20 (1) that the project is located in a rural area;
9-21 (2) the amount of equity the user must pledge or apply
9-22 to the establishment of the project;
9-23 (3) the fees charged by the department, including
9-24 guarantee or loan fees, <application fees,> annual fees, and any
9-25 other costs associated with the loan guarantee or loan, as
9-26 necessary to fund the administration of this subchapter;
9-27 (4) the maximum and minimum guarantee or loan amounts,
10-1 if applicable;
10-2 (5) the permissible interest rates and amortization
10-3 requirements for a guaranteed loan or loan, as agreed on by the
10-4 private lender, the user, and the department;
10-5 (6) the acceptable security for the department's
10-6 participation in a project; and
10-7 (7) any other terms or conditions relating to a
10-8 guarantee or loan.
10-9 (c) On approval of a qualified application and the
10-10 department's determination that the establishment of a project has
10-11 accomplished or will accomplish the public purposes of this
10-12 subchapter, the department may provide a loan guarantee or make a
10-13 loan of not more than 95 <90> percent of the cost of the project to
10-14 a participating lender, if the user holds funds or property in an
10-15 amount or value equal to not less than five <10> percent of the
10-16 cost of the project and those funds or property are then available
10-17 for and are pledged to be applied to the establishment of the
10-18 project.
10-19 (g) The department may charge an application fee of $100 for
10-20 a loan guarantee under this subchapter.
10-21 SECTION 7. Subchapter R, Chapter 481, Government Code, is
10-22 amended by adding Section 481.247 to read as follows:
10-23 Sec. 481.247. REGISTRATION. (a) A small business incubator
10-24 shall register with the Office of Small Business Assistance and
10-25 provide information to the office on the project, the facilities,
10-26 and the availability for participation by historically
10-27 underutilized businesses.
11-1 (b) In this section, "historically underutilized business"
11-2 has the meaning assigned by Section 481.101.
11-3 SECTION 8. Section 493.012, Government Code, is amended to
11-4 read as follows:
11-5 Sec. 493.012. HISTORICALLY UNDERUTILIZED <DISADVANTAGED>
11-6 BUSINESSES. The board and the department each shall make a good
11-7 faith effort to assist historically underutilized <disadvantaged>
11-8 businesses to receive at least 35 <20> percent of the total value
11-9 of each construction contract awarded for construction, purchase of
11-10 supplies, materials, services, and equipment that the board and the
11-11 department expect to make in connection with construction funded by
11-12 the issuance of bonds. The board and the department each shall
11-13 annually report to the legislature and the governor on the level of
11-14 historically underutilized <disadvantaged> business participation
11-15 in board and department contracts. The report shall include
11-16 recommendations for the improvement of historically underutilized
11-17 <disadvantaged> business opportunities with the board and the
11-18 department. In this section, "historically underutilized
11-19 <disadvantaged> business" has the meaning assigned by Section
11-20 481.101 <1.02, State Purchasing and General Services Act (Article
11-21 601b, Vernon's Texas Civil Statutes)>.
11-22 SECTION 9. Section 1.02(3), State Purchasing and General
11-23 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
11-24 amended to read as follows:
11-25 (3) "Historically underutilized business" has the
11-26 meaning assigned by Section 481.101, Government Code
11-27 <"Disadvantaged business" means:>
12-1 <(A) a corporation formed for the purpose of
12-2 making a profit in which at least 51 percent of all classes of the
12-3 shares of stock or other equitable securities are owned by one or
12-4 more persons who are socially disadvantaged because of their
12-5 identification as members of certain groups, including black
12-6 Americans, Hispanic Americans, women, Asian Pacific Americans, and
12-7 Native Americans, who have suffered the effects of discriminatory
12-8 practices or similar insidious circumstances over which they have
12-9 no control;>
12-10 <(B) a sole proprietorship created for the
12-11 purpose of making a profit that is 100 percent owned, operated, and
12-12 controlled by a person described by Paragraph (A) of this
12-13 subdivision;>
12-14 <(C) a partnership formed for the purpose of
12-15 making a profit in which at least 51 percent of the assets and
12-16 interest in the partnership is owned by one or more persons
12-17 described by Paragraph (A) of this subdivision. Those persons must
12-18 have a proportionate interest in the control, operation, and
12-19 management of the partnership affairs;>
12-20 <(D) a joint venture in which each entity in the
12-21 joint venture is a disadvantaged business under this subdivision;
12-22 or>
12-23 <(E) a supplier contract between a disadvantaged
12-24 business under this subdivision and a prime contractor under which
12-25 the disadvantaged business is directly involved in the manufacture
12-26 or distribution of the supplies or materials or otherwise
12-27 warehouses and ships the supplies>.
13-1 SECTION 10. Section 1.03, State Purchasing and General
13-2 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
13-3 amended to read as follows:
13-4 Sec. 1.03. HISTORICALLY UNDERUTILIZED <DISADVANTAGED>
13-5 BUSINESSES. (a) The Office of Small Business Assistance of the
13-6 Texas Department of Commerce shall certify businesses that are
13-7 historically underutilized <disadvantaged> businesses. As part of
13-8 its certification procedures, the office may approve a municipal
13-9 program that certifies historically underutilized <disadvantaged>
13-10 businesses under substantially the same definition prescribed by
13-11 Section 1.02(3) of this Act and may certify businesses certified by
13-12 the municipality as historically underutilized <disadvantaged>
13-13 businesses under this Act.
13-14 (b) The office shall compile a directory of businesses
13-15 certified as historically underutilized <disadvantaged> businesses
13-16 under Subsection (a) of this section. The office shall update the
13-17 directory at least semiannually and provide a copy of the directory
13-18 to the commission and each state agency semiannually. The
13-19 commission and state agencies shall use the directory in
13-20 determining awards of state purchasing and public works contracts.
13-21 (c) The commission and each state agency shall report to the
13-22 office the total number and dollar amount of contracts awarded to
13-23 historically underutilized <disadvantaged> businesses. These
13-24 reports shall be made each January and July and shall report on the
13-25 previous six-month period. The office shall compile and analyze
13-26 the reports and submit a report based on the analysis to the
13-27 presiding officer of each house of the legislature each February.
14-1 (d) The commission shall offer assistance and training to
14-2 historically underutilized <disadvantaged> businesses regarding
14-3 state procurement procedures. The commission shall advise
14-4 historically underutilized <disadvantaged> businesses of the
14-5 availability of state contracts and advise historically
14-6 underutilized <disadvantaged> businesses to enter the businesses'
14-7 names on the state's bid list.
14-8 (e) The commission shall work with public and private
14-9 entities to establish a method to provide information on contracts
14-10 and requests for proposals to the public in a timely and efficient
14-11 manner.
14-12 SECTION 11. Section 1.04(a), State Purchasing and General
14-13 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
14-14 amended to read as follows:
14-15 (a) A person commits an offense if the person intentionally
14-16 applies as a historically underutilized <disadvantaged> business
14-17 for an award of a purchasing contract or public works contract
14-18 under this Act and the person knowingly does not meet the
14-19 definition of a historically underutilized <disadvantaged> business
14-20 under Section 1.02(3) of this Act.
14-21 SECTION 12. Section 3.07(b), State Purchasing and General
14-22 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
14-23 amended to read as follows:
14-24 (b) Each emergency purchase made under this section is
14-25 subject to the historically underutilized <disadvantaged> business
14-26 provisions of Section 3.10 of this article.
14-27 SECTION 13. Section 3.10, State Purchasing and General
15-1 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
15-2 amended to read as follows:
15-3 Sec. 3.10. PURCHASE METHODS; PARTICIPATION GOALS. (a) In
15-4 purchasing supplies, materials, services, and equipment the
15-5 commission may use, but is not limited to, the contract purchase
15-6 procedure, the multiple award contract procedure, and the open
15-7 market purchase procedure. The commission shall have the authority
15-8 to combine orders in a system of schedule purchasing, and it shall
15-9 at all times try to benefit from purchasing in bulk. All purchases
15-10 of and contracts for supplies, materials, services, and equipment
15-11 shall, except as provided herein, be based whenever possible on
15-12 competitive bids. To increase participation of historically
15-13 underutilized businesses in state purchasing contracts, the
15-14 commission shall attempt to purchase items that are not the same or
15-15 essentially similar under separate contracts. Contracts should be
15-16 reviewed to determine if it is feasible and if a reasonable
15-17 opportunity exists for a historically underutilized business to
15-18 perform any part of the contract. The commission may award one or
15-19 more parts of a contract to more than one bidder.
15-20 (b) The commission shall make a good faith effort to assist
15-21 historically underutilized <disadvantaged> businesses to receive at
15-22 least 35 <10> percent of the total value of all contract awards for
15-23 the purchase of supplies, materials, services, and equipment that
15-24 the commission expects to make for a state agency in its fiscal
15-25 year. The commission shall estimate the expected total value of an
15-26 agency's contract awards not later than the 60th day of the
15-27 agency's fiscal year and may revise the estimate as new information
16-1 requires.
16-2 (c) The legislature finds that an indispensable element of
16-3 the American economic system is free and vigorous competition and
16-4 that the preservation and expansion of economic competition is
16-5 essential to the economic well-being of this state and of the
16-6 United States. The legislature further finds that the continuing
16-7 vitality of historically underutilized businesses is of utmost
16-8 importance to economic competition and that it is the policy of
16-9 this state to ensure economic competition by assisting historically
16-10 underutilized businesses to the greatest extent possible. It is
16-11 the intent of the legislature, by this Act, to provide that
16-12 assistance to historically underutilized businesses and, by doing
16-13 so, to promote economic competition to the benefit of all persons
16-14 in this state.
16-15 (d) The commission and each state agency shall take positive
16-16 steps to include historically underutilized businesses on master
16-17 bid lists, inform historically underutilized businesses of state
16-18 procurement opportunities, waive bond requirements where feasible,
16-19 inform historically underutilized businesses as to applicable rules
16-20 and procedures relating to bidding and the procurement of
16-21 contracts, and continually monitor the effectiveness of this Act in
16-22 improving the ability of historically underutilized businesses to
16-23 do business with the state.
16-24 (e) The commission by rule shall adopt statewide goals,
16-25 based on the information provided by the Texas Department of
16-26 Commerce, for the participation of historically underutilized
16-27 businesses in the awarding of contracts for the purchase of
17-1 supplies, materials, services, and equipment. Under the
17-2 participation goals, the commission shall attempt to award to
17-3 historically underutilized businesses a percentage of the total
17-4 value of all contract awards that the commission expects to make
17-5 for a state agency in the commission's fiscal year equal to the
17-6 percentage of all businesses in the state that are businesses that
17-7 qualify as historically underutilized. Separate goals must be
17-8 established for women-owned and minority-owned businesses. The
17-9 commission shall estimate the expected total value of contract
17-10 awards not later than the 60th day of its fiscal year and may
17-11 revise the estimate as required by new information. The Texas
17-12 Department of Commerce shall provide the information required by
17-13 this section to the commission and other state agencies on a timely
17-14 basis.
17-15 (f) The commission shall report to the governor, lieutenant
17-16 governor, and the speaker of the house of representatives each
17-17 fiscal year the level of implementation of the participation goals
17-18 during the preceding fiscal year. If the participation goals are
17-19 not being met, the commission shall report the reasons for the
17-20 inability to meet the goals.
17-21 (g) A contract award made under Subsection (e) of this
17-22 section to a historically underutilized business is subject to the
17-23 lowest and best bid requirements of Section 3.11(e) of this Act.
17-24 (h) Each state agency is subject to the participation goals
17-25 adopted by the commission under Subsection (e) of this section when
17-26 the agency makes its own procurements.
17-27 SECTION 14. Section 5.36, State Purchasing and General
18-1 Services Act (Article 601b, Vernon's Texas Civil Statutes), is
18-2 amended to read as follows:
18-3 Sec. 5.36. PUBLIC WORKS CONTRACTS WITH CERTAIN BUSINESSES.
18-4 (a) The commission or any other state agency that enters contracts
18-5 for projects, including projects otherwise excepted under Section
18-6 5.13 of this Act, by rule shall adopt statewide goals for the
18-7 participation of historically underutilized businesses in the
18-8 awarding of construction contracts. Under the participation goals,
18-9 the agency shall attempt to award to historically underutilized
18-10 businesses a percentage of the total value of all construction
18-11 contract awards that the agency expects to make in its fiscal year
18-12 equal to the percentage of all construction contractors in the
18-13 state that are businesses that qualify as historically
18-14 underutilized businesses and shall take the steps set forth in
18-15 Section 3.10(d) of this Act. The agency shall estimate the
18-16 expected total value of contract awards not later than the 60th day
18-17 of its fiscal year and may revise the estimate as required by new
18-18 information <A state agency that enters into a contract for a
18-19 project, including a project constructed by or for an agency
18-20 otherwise excepted under Section 5.13 of this article, shall make a
18-21 good faith effort to assist disadvantaged businesses to receive at
18-22 least 10 percent of the total value of each construction contract
18-23 award that the agency expects to make in its fiscal year. Each
18-24 agency shall estimate the expected total value of contract awards
18-25 under this article not later than the 60th day of its fiscal year
18-26 and may revise the estimate as new information requires>.
18-27 (b) The commission shall report to the governor, lieutenant
19-1 governor, and speaker of the house of representatives during each
19-2 fiscal year the level of implementation of the participation goals
19-3 during the preceding fiscal year. If the participation goals are
19-4 not being met, the commission shall report the reasons for the
19-5 inability to meet the goals.
19-6 (c) A contract award made under Subsection (a) of this
19-7 section to a historically underutilized business is subject to the
19-8 lowest and best bid requirements of Section 5.20(c) of this Act.
19-9 SECTION 15. Section 1, Chapter 1078, Acts of the 70th
19-10 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
19-11 Civil Statutes), is amended by adding Subdivision (4) to read as
19-12 follows:
19-13 (4) "Historically underutilized business" has the
19-14 meaning assigned by Section 481.101, Government Code.
19-15 SECTION 16. Chapter 1078, Acts of the 70th Legislature,
19-16 Regular Session, 1987 (Article 717k-7, Vernon's Texas Civil
19-17 Statutes), is amended by adding Section 3A to read as follows:
19-18 Sec. 3A. State Bond Contracts with Certain Providers of
19-19 Services. (a) The board by rule shall adopt goals for the
19-20 participation of historically underutilized businesses based on the
19-21 percentage of all providers of professional bond services in the
19-22 state that are providers that qualify as historically underutilized
19-23 businesses in the awarding of state contracts for professional bond
19-24 services.
19-25 (b) To implement the participation goals, the board shall
19-26 encourage each issuer to award to historically underutilized
19-27 businesses the percentage adopted by the board under Subsection (a)
20-1 of this section of the total value of all professional bond
20-2 services contract awards that the issuer expects to make in its
20-3 fiscal year. The issuer shall estimate the expected total value of
20-4 contract awards not later than the 60th day of its fiscal year and
20-5 may revise the estimate as required by new information.
20-6 SECTION 17. Section 7(b), Chapter 1078, Acts of the 70th
20-7 Legislature, Regular Session, 1987 (Article 717k-7, Vernon's Texas
20-8 Civil Statutes), is amended to read as follows:
20-9 (b) Except as provided by Section 3A of this Act, this
20-10 <This> Act does not affect the right of an issuer of state bonds to
20-11 select its own bond counsel, underwriter, financial advisor, or
20-12 other provider of service in connection with issuance of state
20-13 bonds.
20-14 SECTION 18. Subchapter Z, Local Government Code, is amended
20-15 by adding Section 271.903 to read as follows:
20-16 Sec. 271.903. HISTORICALLY UNDERUTILIZED BUSINESSES. (a)
20-17 In this section:
20-18 (1) "Governmental entity" has the meaning assigned by
20-19 Section 271.021.
20-20 (2) "Historically underutilized business" has the
20-21 meaning assigned by Section 481.101, Government Code.
20-22 (b) To increase the procurement and contractual
20-23 opportunities of historically underutilized businesses, each
20-24 governmental entity shall establish a program for the participation
20-25 of those businesses based on the percentage of all businesses in
20-26 the boundaries of the governmental entity that are businesses that
20-27 qualify as historically underutilized businesses.
21-1 (c) A governmental entity may conduct a study to determine
21-2 the number of historically underutilized businesses in the
21-3 boundaries of the governmental entity and the percentage of all
21-4 business that number represents. The entity may use that
21-5 percentage in setting goals under Subsection (b).
21-6 (d) If a governmental entity is required to award a contract
21-7 on the basis of competitive bids, the entity shall give to the
21-8 Office of Small Business Assistance in the Texas Department of
21-9 Commerce notice of the time, date, and place at which the contract
21-10 will be awarded and the plans and specifications for the contract
21-11 not later than the 14th day before the date that competitive bids
21-12 for the contract must be received.
21-13 SECTION 19. Title 16, Revised Statutes, is amended by adding
21-14 Articles 351 and 352 to read as follows:
21-15 Art. 351. REPORTING REQUIREMENTS. (a) In this article:
21-16 (1) "Financial institution" means a state or federally
21-17 chartered bank, savings bank, savings and loan association, or
21-18 credit union in this state, or a holding company, subsidiary, or
21-19 affiliate of such an institution.
21-20 (2) "Historically underutilized business" has the
21-21 meaning assigned by Section 481.101, Government Code.
21-22 (b) Each quarter on dates determined by the state treasurer,
21-23 a financial institution must file with the state treasurer and the
21-24 Office of Small Business Assistance in the Texas Department of
21-25 Commerce a report for the preceding quarter that includes:
21-26 (1) the number of historically underutilized
21-27 businesses that applied for a loan with the financial institution;
22-1 (2) the number of loans that were made to a
22-2 historically underutilized business; and
22-3 (3) the number of historically underutilized
22-4 businesses that were denied a request for a loan and the reason for
22-5 the denial.
22-6 (c) If the state treasurer determines that a financial
22-7 institution is improperly denying loans to a historically
22-8 underutilized business, the treasurer may prohibit any funds of the
22-9 state or any other governmental entity over which the treasurer has
22-10 control from being deposited with the financial institution.
22-11 Art. 352. LINE OF CREDIT. (a) In this article:
22-12 (1) "Financial institution" has the meaning assigned
22-13 by Article 351, Revised Statutes.
22-14 (2) "Historically underutilized business" has the
22-15 meaning assigned by Section 481.101, Government Code.
22-16 (b) On request of a historically underutilized business that
22-17 is the recipient of a contract from the state or a local unit of
22-18 government, a financial institution shall assist the business in
22-19 the establishment of a collateralized operating line of credit that
22-20 is consistent with the dollar value of the business contract. The
22-21 line of credit must be available to the historically underutilized
22-22 business on a weekly basis to meet operating expenses.
22-23 (c) The financial institution has the right of first draw
22-24 against the historically underutilized business's accounts
22-25 receivable to reduce the line of credit proportionately or as
22-26 arranged between the financial institution and the historically
22-27 underutilized business.
23-1 SECTION 20. Chapter 7, Insurance Code, is amended by adding
23-2 Article 7.21 to read as follows:
23-3 Art. 7.21. REPORTING REQUIREMENTS. (a) The State Board of
23-4 Insurance shall maintain records and submit a report to the
23-5 governor and the legislature not later than February 1 of each
23-6 odd-numbered year. The report must include:
23-7 (1) the number of bond applications made to surety
23-8 companies;
23-9 (2) the number of bond applicants that were
23-10 historically underutilized businesses;
23-11 (3) the number and amount of bonds authorized by
23-12 surety companies;
23-13 (4) the number and amount of bonds that were issued to
23-14 historically underutilized businesses; and
23-15 (5) a breakdown of the bonds issued to historically
23-16 underutilized businesses by ethnicity and sex.
23-17 (b) A copy of the report must also be filed with the Office
23-18 of Small Business Assistance in the Texas Department of Commerce
23-19 and the State Purchasing and General Services Commission.
23-20 (c) In this section, "historically underutilized business"
23-21 has the meaning assigned by Section 481.101, Government Code.
23-22 SECTION 21. (a) Except as expressly provided, this Act
23-23 takes effect September 1, 1993.
23-24 (b) This Act applies only to state purchase contracts and
23-25 state contracts for professional bond services awarded on or after
23-26 September 1, 1993.
23-27 (c) Rules required by Sections 3.10 and 5.36, State
24-1 Purchasing and General Services Act (Article 601b, Vernon's Texas
24-2 Civil Statutes), and Chapter 1078, Acts of the 70th Legislature,
24-3 Regular Session, 1987 (Article 717k-7, Vernon's Texas Civil
24-4 Statutes), as amended by this Act, shall be adopted not later than
24-5 September 1, 1994.
24-6 (d) Programs required under Section 271.903, Local
24-7 Government Code, as added by this Act, shall be established not
24-8 later than September 1, 1994.
24-9 SECTION 22. The importance of this legislation and the
24-10 crowded condition of the calendars in both houses create an
24-11 emergency and an imperative public necessity that the
24-12 constitutional rule requiring bills to be read on three several
24-13 days in each house be suspended, and this rule is hereby suspended.