By Van de Putte                                 H.B. No. 2312

      75R3669 BEM-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the creation of the Small Business Advocacy Office

 1-3     within the Texas Department of Commerce.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Chapter 481, Government Code, is amended by

 1-6     adding Subchapter BB to read as follows:

 1-7                  SUBCHAPTER BB.  SMALL BUSINESS ADVOCACY OFFICE 

 1-8           Sec. 481.391.  DEFINITIONS.  In this subchapter:

 1-9                 (1)  "Chief advocate" means the chief small business

1-10     advocate.

1-11                 (2)  "Office" means the office of small business

1-12     advocacy.

1-13                 (3)  "Small business" means a legal entity, including a

1-14     corporation, partnership, or sole proprietorship that:

1-15                       (A)  is formed for the purpose of making a

1-16     profit;

1-17                       (B)  is independently owned and operated; and

1-18                       (C)  has:

1-19                             (i)  fewer than 100 employees; or

1-20                             (ii)  less than $1 million in annual gross

1-21     receipts.

1-22           Sec. 481.392.  OFFICE OF SMALL BUSINESS ADVOCACY.  The office

1-23     of small business advocacy is created in the department.

1-24           Sec. 481.393.  CHIEF SMALL BUSINESS ADVOCATE.  (a)  The

 2-1     office shall be headed by a chief small business advocate appointed

 2-2     by the governor with the advice and consent of the senate.  The

 2-3     chief advocate serves a two-year term expiring June 1 of each

 2-4     odd-numbered year.

 2-5           (b)  To be eligible to serve as the chief advocate, a person

 2-6     must have demonstrated a strong commitment to and involvement in

 2-7     small business efforts.

 2-8           Sec. 481.394.  PRIMARY DUTIES.  The office shall:

 2-9                 (1)  examine the role of small businesses in the Texas

2-10     economy and the contributions that small businesses can make in

2-11     improving competition, encouraging economic and social mobility for

2-12     all residents in this state, expanding employment opportunities,

2-13     increasing productivity, promoting exports, and stimulating

2-14     innovation and entrepreneurship;

2-15                 (2)  measure the direct costs and other effects of

2-16     government regulation on small businesses and may make

2-17     recommendations to the legislature regarding eliminating excessive

2-18     or unnecessary regulations of small businesses;

2-19                 (3)  assist a state agency in determining the impact a

2-20     proposed rule of the agency has on small businesses as required by

2-21     Section 2006.002 and assist the agency in reducing the adverse

2-22     effect the rule has on small businesses, if appropriate;

2-23                 (4)  review all proposed legislation affecting small

2-24     businesses and provide the legislature with a small business impact

2-25     statement;

2-26                 (5)  assess the effectiveness of existing state

2-27     programs for small businesses and the feasibility of reducing the

 3-1     emphasis the state has placed on those programs and increasing the

 3-2     emphasis on general assistance programs designed to benefit all

 3-3     small businesses;

 3-4                 (6)  determine the impact of the tax structure on small

 3-5     businesses and make legislative and other proposals for altering

 3-6     the tax structure to enable each small business to contribute to

 3-7     the extent of the business' potential to the improvement of the

 3-8     economic well-being of this state;

 3-9                 (7)  study the ability of financial markets and

3-10     institutions to meet small business credit and investment needs;

3-11                 (8)  determine the availability of financial and other

3-12     resources to small businesses and recommend methods of increasing

3-13     the availability of financial assistance and other resources to

3-14     small businesses, including methods for:

3-15                       (A)  securing equity capital;

3-16                       (B)  generating markets for the goods and

3-17     services of small businesses;

3-18                       (C)  providing more effective business education

3-19     and training and management and technical assistance; and

3-20                       (D)  providing assistance in complying with

3-21     federal, state, and local law;

3-22                 (9)  make recommendations and suggestions as necessary

3-23     to assist the development of and to strengthen small businesses

3-24     owned by women and minorities and other small businesses;

3-25                 (10)  recommend specific measures for creating an

3-26     environment in which all small businesses will have the opportunity

3-27     to compete effectively and expand to their full potential and to

 4-1     ascertain the common reasons, if any, for small business successes

 4-2     and failures; and

 4-3                 (11)  determine the feasibility of developing a set of

 4-4     rational, objective criteria to be used to define a small business

 4-5     and to develop the criteria, if feasible.

 4-6           Sec. 481.395.  ADDITIONAL DUTIES.  In addition to the

 4-7     office's primary duties under Section 481.394, the office shall:

 4-8                 (1)  serve as a focal point for the receipt of

 4-9     complaints, criticisms, and suggestions concerning state government

4-10     policies and activities that affect small businesses;

4-11                 (2)  counsel small businesses on how to resolve

4-12     questions and problems concerning the relationship of small

4-13     businesses and state government;

4-14                 (3)  develop proposals for changes in the policies and

4-15     activities of any state agency that will better serve the purposes

4-16     of this subchapter and communicate those proposals to the

4-17     appropriate state agency;

4-18                 (4)  present the views and interests of small

4-19     businesses to state agencies, the policies and activities of which

4-20     may affect small businesses; and

4-21                 (5)  enlist the cooperation and assistance of public

4-22     and private agencies, businesses, and other organizations in

4-23     disseminating information about the programs and services provided

4-24     by the state that benefit small businesses and how small businesses

4-25     can participate in or make use of those programs and services.

4-26           Sec. 481.396.  RULES AFFECTING SMALL BUSINESSES.  (a)  On

4-27     receiving notice of a proposed rule affecting small businesses, the

 5-1     office shall notify affected small businesses of the proposed rule

 5-2     through business or trade associations.  The notice must include

 5-3     the substance of the proposed rule and the time, place, and manner

 5-4     in which interested parties may present their views and comments on

 5-5     the proposed rule.

 5-6           (b)  The office may:

 5-7                 (1)  coordinate with agencies to consolidate and

 5-8     simplify rules, compliance requirements, and reporting requirements

 5-9     of state agencies that affect small businesses; and

5-10                 (2)  recommend the elimination, consolidation, or

5-11     amendment of existing rules that have a disproportionately adverse

5-12     effect on small businesses.

5-13           (c)  The office may comment at any public hearing concerning

5-14     the proposed rule and the effect of the proposed rule on small

5-15     businesses.

5-16           Sec. 481.397.  STAFF AND POWERS OF OFFICE OF SMALL BUSINESS

5-17     ADVOCACY.  In administering this subchapter, the chief advocate

5-18     may:

5-19                 (1)  employ and set the compensation of personnel to

5-20     carry out the office's functions under this subchapter;

5-21                 (2)  consult with:

5-22                       (A)  experts and authorities in the fields of

5-23     small business investment, venture capital, investment and

5-24     commercial banking, and other methods of financing;

5-25                       (B)  individuals with regulatory, legal,

5-26     economic, or financial expertise, including members of the academic

5-27     community; and

 6-1                       (C)  individuals who represent the public

 6-2     interest; and

 6-3                 (3)  hold public hearings.

 6-4           Sec. 481.398.  ASSISTANCE OF GOVERNMENT AGENCIES.  Each

 6-5     department, agency, and instrumentality of state government is

 6-6     authorized and directed to furnish to the chief advocate reports

 6-7     and other information that is necessary to carry out the functions

 6-8     of this subchapter.

 6-9           Sec. 481.399.  REPORTS.  The chief advocate from time to time

6-10     may prepare and publish reports.  Not later than September 1, 1998,

6-11     the chief advocate shall transmit to the legislature and the

6-12     governor a full report containing findings and specific

6-13     recommendations with respect to each of the functions referred to

6-14     in Section 481.395, including specific legislative proposals and

6-15     recommendations for administrative or other action.

6-16           Sec. 481.400.  FUNDING.  (a)  The maximum amount that the

6-17     legislature may appropriate for salaries for the personnel of the

6-18     office is $200,000 annually.  The maximum amount that the

6-19     legislature may appropriate to cover administrative expenses for

6-20     the office is $100,000 annually.

6-21           (b)  The office may accept gifts, grants, and donations from

6-22     sources other than the state for the purpose of performing specific

6-23     projects, studies, or procedures or to provide assistance to small

6-24     businesses.

6-25           SECTION 2.  Section 481.103(a), Government Code, is amended

6-26     to read as follows:

6-27           (a)  The office shall:

 7-1                 (1)  examine the role of small and historically

 7-2     underutilized businesses in the state's economy and the

 7-3     contribution of small and historically underutilized businesses in

 7-4     generating economic activity, expanding employment opportunities,

 7-5     promoting exports, stimulating innovation and entrepreneurship, and

 7-6     bringing new and untested products and services to the marketplace;

 7-7                 (2)  [serve as the principal advocate in the state on

 7-8     behalf of small and historically underutilized businesses and

 7-9     provide advice in the consideration of administrative requirements

7-10     and legislation that affect small and historically underutilized

7-11     businesses;]

7-12                 [(3)]  evaluate the effectiveness of efforts of state

7-13     agencies and other entities to assist small and historically

7-14     underutilized businesses and make appropriate recommendations to

7-15     assist the development and strengthening of small and historically

7-16     underutilized businesses;

7-17                 (3) [(4)]  identify specific instances in which

7-18     regulations inhibit small and historically underutilized business

7-19     development and to the extent possible identify conflicting state

7-20     policy goals;

7-21                 (4) [(5)]  determine the availability of financial and

7-22     other resources to small and historically underutilized businesses

7-23     and recommend methods for:

7-24                       (A)  increasing the availability of equity

7-25     capital and other forms of financial assistance to small and

7-26     historically underutilized businesses;

7-27                       (B)  generating markets for the goods and

 8-1     services of small and historically underutilized businesses;

 8-2                       (C)  providing more effective education,

 8-3     training, and management and technical assistance to small and

 8-4     historically underutilized businesses; and

 8-5                       (D)  providing assistance to small and

 8-6     historically underutilized businesses in complying with federal,

 8-7     state, and local laws;

 8-8                 (5) [(6)  describe the reasons for small and

 8-9     historically underutilized business successes and failures,

8-10     ascertain the related factors that are particularly important in

8-11     this state, and recommend actions for increasing the success rate

8-12     of small and historically underutilized businesses;]

8-13                 [(7)  serve as a focal point for receiving complaints

8-14     and suggestions concerning state government policies and activities

8-15     that affect small and historically underutilized businesses;]

8-16                 [(8)  assist with the resolution of problems among

8-17     state agencies and small and historically underutilized businesses;]

8-18                 [(9)  develop and advocate proposals for changes in

8-19     state policies and activities that adversely affect small and

8-20     historically underutilized businesses;]

8-21                 [(10)  provide to legislative committees and state

8-22     agencies information on the effects of proposed policies or actions

8-23     that affect small and historically underutilized businesses;]

8-24                 [(11)]  enlist the assistance of public and private

8-25     agencies, businesses, and other organizations in disseminating

8-26     information about state programs and services that benefit small

8-27     and historically underutilized businesses and information regarding

 9-1     means by which small and historically underutilized businesses can

 9-2     use those programs and services;

 9-3                 (6) [(12)]  provide information and assistance relating

 9-4     to establishing, operating, or expanding small and historically

 9-5     underutilized businesses;

 9-6                 (7) [(13)]  establish and operate a statewide toll-free

 9-7     telephone service providing small and historically underutilized

 9-8     businesses with ready access to the services offered by the office;

 9-9                 (8) [(14)]  assist small and historically underutilized

9-10     businesses by:

9-11                       (A)  identifying:

9-12                             (i)  sources of financial assistance for

9-13     those businesses;  and

9-14                             (ii)  financial barriers to those

9-15     businesses;

9-16                       (B)  establishing financing programs for those

9-17     businesses that aid in overcoming financial barriers;

9-18                       (C)  matching those businesses with sources of

9-19     financial assistance; and

9-20                       (D)  assisting those businesses with the

9-21     preparation of applications for loans from governmental or private

9-22     sources;

9-23                 (9) [(15)]  sponsor meetings, to the extent practicable

9-24     in cooperation with public and private educational institutions, to

9-25     provide training and disseminate information beneficial to small

9-26     and historically underutilized businesses;

9-27                 (10) [(16)]  assist small and historically

 10-1    underutilized businesses in their dealings with federal, state, and

 10-2    local governmental agencies and provide information regarding

 10-3    governmental requirements affecting small and historically

 10-4    underutilized businesses;

 10-5                (11) [(17)  perform research, studies, and analyses of

 10-6    matters affecting the interests of small and historically

 10-7    underutilized businesses;]

 10-8                [(18)  develop and implement programs to encourage

 10-9    governmental agencies, public sector business associations, and

10-10    other organizations to provide useful services to small and

10-11    historically underutilized businesses;]

10-12                [(19)]  use available resources within the state, such

10-13    as small business development centers, educational institutions,

10-14    and nonprofit associations, to coordinate the provision of

10-15    management and technical assistance to small and historically

10-16    underutilized businesses in a systematic manner;

10-17                (12) [(20)]  publish newsletters, brochures, and other

10-18    documents containing information useful to small and historically

10-19    underutilized businesses;

10-20                (13) [(21)]  identify successful small and historically

10-21    underutilized business assistance programs provided by other states

10-22    and determine the feasibility of adapting those programs for

10-23    implementation in this state;

10-24                (14) [(22)]  establish an outreach program to make the

10-25    existence of the office known to small and historically

10-26    underutilized businesses and potential clients throughout the

10-27    state;

 11-1                (15) [(23)]  adopt rules necessary to carry out this

 11-2    subchapter;

 11-3                (16) [(24)]  identify potential business opportunities

 11-4    for small and historically underutilized businesses in the border

 11-5    region and develop programs to maximize those opportunities;

 11-6                (17) [(25)]  identify potential business opportunities

 11-7    for small and historically underutilized businesses in rural areas

 11-8    of this state and develop programs to maximize those opportunities;

 11-9    and

11-10                (18) [(26)]  perform any other functions necessary to

11-11    carry out the purposes of this subchapter.

11-12          SECTION 3.  Section 2006.002, Government Code, is amended by

11-13    adding Subsections (f) and (g) to read as follows:

11-14          (f)  To reduce the adverse impact of rules on micro

11-15    businesses, a state agency may adopt provisions concerning micro

11-16    businesses similar to those outlined in Subsection (b) for small

11-17    businesses.

11-18          (g)  In this section, "micro business" means a legal entity,

11-19    including a corporation, partnership, or sole proprietorship that:

11-20                (1)  is formed for the purpose of making a profit;

11-21                (2)  is independently owned and operated; and

11-22                (3)  has fewer than 20 employees or less than $1

11-23    million in annual gross receipts.

11-24          SECTION 4.  This Act takes effect September 1, 1997.  The

11-25    governor shall appoint a chief small business advocate as required

11-26    by Subchapter BB, Chapter 481, Government Code, as added by this

11-27    Act, not later than January 1, 1998.

 12-1          SECTION 5.  The importance of this legislation and the

 12-2    crowded condition of the calendars in both houses create an

 12-3    emergency and an imperative public necessity that the

 12-4    constitutional rule requiring bills to be read on three several

 12-5    days in each house be suspended, and this rule is hereby suspended.