By: West S.B. No. 1725
97S0746/2
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the historically underutilized business program of the
1-2 State of Texas.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 2155.073, Government Code, is amended to
1-5 read as follows:
1-6 Sec. 2155.073. HISTORICALLY UNDERUTILIZED [PARTICIPATION BY
1-7 SMALL] BUSINESSES ASSISTANCE PROGRAM [IN STATE PURCHASING]. The
1-8 commission shall assist and foster participation of historically
1-9 underutilized [small] businesses in the purchasing activities,
1-10 other than construction or construction-related activity, of the
1-11 state. Strategies for assisting and fostering such participation
1-12 shall include but not be limited to [by]:
1-13 (1) assisting state agencies in developing strategies
1-14 and procedures to ensure the inclusion of historically
1-15 underutilized [small] businesses on state agency master bid lists;
1-16 (2) informing historically underutilized [small]
1-17 businesses of state purchasing opportunities;
1-18 (3) assisting historically underutilized [small]
1-19 businesses in complying with the procedures for bidding on state
1-20 contracts and assisting those businesses in such skills as bidding
1-21 techniques and product analysis;
1-22 (4) providing training [working with state and federal
1-23 agencies and with private organizations in disseminating
2-1 information on state purchasing procedures and the opportunities
2-2 for small businesses to participate in state contracts;]
2-3 [(5) assisting state agencies with the development of
2-4 a comprehensive list of small businesses capable of providing goods
2-5 or services to the state;]
2-6 [(6) making recommendations] to state agencies on how
2-7 to simplify contract specifications and terms to increase the
2-8 opportunities for historically underutilized [small] business
2-9 participation; and
2-10 (5) [(7) working with state agencies to establish a
2-11 statewide policy for increasing the use of small businesses;]
2-12 [(8)] assisting state agencies in seeking historically
2-13 underutilized [small] businesses capable of supplying goods and
2-14 services that the agencies require through the development of a
2-15 comprehensive list of historically underutilized businesses[;]
2-16 [(9) assisting state agencies in identifying and
2-17 advising small businesses on the types of goods and services needed
2-18 by the agencies; and]
2-19 [(10) assisting state agencies in increasing the
2-20 volume of business placed with small businesses].
2-21 SECTION 2. Section 2161.001, Government Code, is amended to
2-22 read as follows:
2-23 Sec. 2161.001. DEFINITIONS. In this chapter:
2-24 (1) "Economically disadvantaged person" means a person
2-25 who is:
3-1 (A)(i) an owner of a business that does not
3-2 exceed, in any period of four consecutive years, the gross receipts
3-3 or total employment levels stated in the small business guidelines,
3-4 13 C.F.R. Section 121.201, promulgated by the United States Small
3-5 Business Administration for businesses within the same four-digit
3-6 Standard Industrial Classification code; and
3-7 (ii) if the person is married and the
3-8 person's spouse is a business owner, the spouse's business
3-9 qualifies as a small business within the respective four-digit
3-10 Standard Industrial Classification code applicable to the spouse's
3-11 business; or
3-12 (B) a member of a group which has suffered the
3-13 effects of discriminatory practices or other similar circumstances
3-14 over which the person had no control, as defined in the state's
3-15 Disparity Study, including Black Americans, Hispanic Americans,
3-16 women, Asian Pacific Americans, and Native Americans who are also
3-17 economically disadvantaged persons as defined by Paragraph (A).
3-18 (2) "Goods" means supplies, materials, or equipment.
3-19 (3) [(2)] "Historically underutilized business" means:
3-20 (A) a corporation formed for the purpose of
3-21 making a profit in which 51 percent or more of all classes of the
3-22 shares of stock or other equitable securities are owned by one or
3-23 more economically [socially] disadvantaged persons who have a
3-24 proportionate interest and actively participate in the
3-25 corporation's control, operation, and management;
4-1 (B) a sole proprietorship created for the
4-2 purpose of making a profit that is completely owned, operated, and
4-3 controlled by an economically [a socially] disadvantaged person;
4-4 (C) a partnership formed for the purpose of
4-5 making a profit in which 51 percent or more of the assets and
4-6 interest in the partnership are owned by one or more economically
4-7 [socially] disadvantaged persons who have a proportionate interest
4-8 and actively participate in the partnership's control, operation,
4-9 and management;
4-10 (D) a joint venture in which each entity in the
4-11 venture is a historically underutilized business, as determined
4-12 under another paragraph of this subdivision; or
4-13 (E) a supplier contract between a historically
4-14 underutilized business as determined under another paragraph of
4-15 this subdivision and a prime contractor under which the
4-16 historically underutilized business is directly involved in the
4-17 manufacture or distribution of the goods or otherwise warehouses
4-18 and ships the goods.
4-19 (4) "State agency" means:
4-20 (A) a department, commission, board, office, or
4-21 other agency in the executive branch of state government created by
4-22 the state constitution or a state statute;
4-23 (B) the supreme court, the court of criminal
4-24 appeals, a court of appeals, or the Texas Judicial Council; or
4-25 (C) a university system or an institution of
5-1 higher education as defined by Section 61.003, Education Code,
5-2 except a public junior college. [(3) "Socially disadvantaged
5-3 person" means a person who is socially disadvantaged because of the
5-4 person's identification as a member of a certain group, including
5-5 Black Americans, Hispanic Americans, women, Asian Pacific
5-6 Americans, and Native Americans, and who has suffered the effects
5-7 of discriminatory practices or other similar insidious
5-8 circumstances over which the person has no control.]
5-9 SECTION 3. Section 2161.002, Government Code, is amended to
5-10 read as follows:
5-11 Sec. 2161.002. Commission Administration; Comptroller
5-12 Assistance. (a) To administer Subchapters B and C, the commission
5-13 may:
5-14 (1) require information from a state agency; and
5-15 (2) adopt rules.
5-16 (b) The comptroller shall provide information to the
5-17 commission that will assist the commission in performing its duties
5-18 under Subchapters B and C.
5-19 (c) In the event of a conflict between the provisions of
5-20 this chapter and rules promulgated under this chapter and the
5-21 requirements of federal law, federal law shall prevail and the
5-22 commission shall be authorized to administer this chapter
5-23 consistent with federal law.
5-24 SECTION 4. Subchapter A, Chapter 2161, Government Code, is
5-25 amended by adding Section 2161.003 to read as follows:
6-1 Sec. 2161.003. ADOPTION OF RULES BY STATE AGENCY. State
6-2 agencies shall adopt for the administration of their historically
6-3 underutilized business program the rules promulgated by the
6-4 commission. Each state agency may develop supplemental rules
6-5 thereto provided that such rules are:
6-6 (1) consistent with commission rules; and
6-7 (2) based on the disparity study.
6-8 SECTION 5. Section 2161.122, Government Code, is amended to
6-9 read as follows:
6-10 Sec. 2161.122. Information Gathering by State Agency.
6-11 (a) To ensure accuracy in reporting, a state agency shall maintain
6-12 and compile monthly information relating to the use by the agency
6-13 and each of its operating divisions of historically underutilized
6-14 businesses, including information regarding subcontractors and
6-15 suppliers required by Subsection (b).
6-16 (b) A contractor or supplier awarded a contract by a state
6-17 agency shall report to the agency the identity of each historically
6-18 underutilized business to whom the contractor or supplier awarded a
6-19 subcontract for the purchase of goods or services.
6-20 (c) State agencies shall report to the commission the
6-21 following information on businesses classified as owned by
6-22 economically disadvantaged persons, including Black Americans,
6-23 Hispanic Americans, Asian Pacific Americans, and by gender, with
6-24 regard to the expenditure of both treasury and nontreasury funds:
6-25 (1) the total dollar amount of purchases and payments
7-1 made under contracts awarded to historically underutilized
7-2 businesses; and
7-3 (2) the number of payments received by each
7-4 historically underutilized business under each contract.
7-5 (d) A state agency participating in a group purchasing
7-6 program described under Section 2155.139(b) shall send to the
7-7 commission in the agency's report under Section 2161.121 a separate
7-8 list of purchases from historically underutilized businesses that
7-9 are made through the group purchasing program, including the dollar
7-10 amount of each purchase allocated to the reporting agency.
7-11 (e) [(d)] A state agency's report is a record of the
7-12 agency's purchases for which the agency selected the vendor. If
7-13 the vendor was selected by the commission as part of its state
7-14 contract program, the commission shall include the purchase in the
7-15 commission's report of its own purchases unless the commission made
7-16 a sole source purchase for the agency under Section 2155.067. The
7-17 state agency for which the purchase was made shall report the
7-18 selection of the vendor on its report as if the agency selected the
7-19 vendor when the agency drew specifications for goods or services
7-20 that are proprietary to one vendor.
7-21 SECTION 6. Chapter 2161, Government Code, is amended by
7-22 adding Subchapter F to read as follows:
7-23 SUBCHAPTER F. ACTIONS FOR AGENCY NONCOMPLIANCE
7-24 Sec. 2161.301. ACCOUNTABILITY OF STATE AGENCIES. (a) The
7-25 state auditor shall report to the commission a state agency that is
8-1 not complying with this chapter.
8-2 (b) If an agency is found by the state auditor not to be in
8-3 compliance with this chapter, the commission may revoke any
8-4 purchasing authority that the commission had delegated to the
8-5 agency. If the commission revokes an agency's delegated purchasing
8-6 authority under this subsection, the comptroller may consider that
8-7 fact in the event the commission needs a transfer of the violating
8-8 agency's appropriated funds to cover the costs to the commission of
8-9 assuming the violating agency's purchasing functions. The amount
8-10 of transfer from the violating agency's funds to the commission
8-11 shall be in an amount determined by the Legislative Budget Board.
8-12 SECTION 7. Chapter 321, Government Code, is amended by
8-13 adding Section 321.0137 to read as follows:
8-14 Sec. 321.0137. HISTORICALLY UNDERUTILIZED BUSINESS PROGRAM
8-15 AUDIT. (a) A historically underutilized business program audit is
8-16 an audit to determine, according to the established program rules
8-17 and regulations, whether an agency is making a good faith effort to
8-18 comply with the program authorized in Chapter 2161, including
8-19 whether the agency:
8-20 (1) has adopted and complied with rules, strategic
8-21 plans, and procedures governing the agency's historically
8-22 underutilized business contract awards in accordance with the
8-23 commission's rules;
8-24 (2) used the commission's historically underutilized
8-25 business list and other sources to identify historically
9-1 underutilized businesses that can, and are available to, meet
9-2 agency needs;
9-3 (3) made marketing and outreach efforts to
9-4 historically underutilized businesses;
9-5 (4) designated an employee with appropriate experience
9-6 and authority to serve as the agency's historically underutilized
9-7 business coordinator;
9-8 (5) established objective measures in performance
9-9 evaluations for all employees involved in negotiating or making
9-10 contracting decisions to measure improvements in the agency's
9-11 historically underutilized business participation; and
9-12 (6) submitted valid data for historically
9-13 underutilized business reporting to the commission.
9-14 SECTION 8. Section 321.014, Government Code, is amended to
9-15 read as follows:
9-16 Sec. 321.014. AUDIT REPORTS. (a) The State Auditor shall
9-17 prepare a written report for each audit conducted by the State
9-18 Auditor.
9-19 (b) The written report must include a management letter with
9-20 comments about internal controls, compliance with state or federal
9-21 laws, and recommendations for improving operations or program
9-22 effectiveness, as applicable. The report must also include an
9-23 opinion on fair presentation of financial statements if the State
9-24 Auditor considers an opinion to be necessary.
9-25 (c) The State Auditor shall submit each report to the
10-1 committee prior to publication. The State Auditor shall file a
10-2 copy of each report prepared under this section with:
10-3 (1) the governor;
10-4 (2) the lieutenant governor;
10-5 (3) the speaker of the house of representatives;
10-6 (4) the secretary of state;
10-7 (5) the Legislative Reference Library;
10-8 (6) the chairman of the governing body and the
10-9 administrative head of each entity that is the subject of the
10-10 report; [and]
10-11 (7) members of the legislature on a committee with
10-12 oversight responsibility for the entity or program that is the
10-13 subject of the report; and
10-14 (8) the General Services Commission, for those audits
10-15 conducted under Section 321.0137.
10-16 (d) The State Auditor shall maintain a complete file
10-17 containing:
10-18 (1) copies of each audit report; and
10-19 (2) audit work papers and other evidence relating to
10-20 the work of the State Auditor.
10-21 (e) The State Auditor shall maintain the files required by
10-22 Subsection (d) for at least eight years after the date on which the
10-23 information is filed.
10-24 SECTION 9. Section 325.011, Government Code, is amended to
10-25 read as follows:
11-1 Sec. 325.011. Criteria for Review. The commission and its
11-2 staff shall consider the following criteria in determining whether
11-3 a public need exists for the continuation of a state agency or its
11-4 advisory committees or for the performance of the functions of the
11-5 agency or its advisory committees:
11-6 (1) the efficiency with which the agency or advisory
11-7 committee operates;
11-8 (2) an identification of the objectives intended for
11-9 the agency or advisory committee and the problem or need that the
11-10 agency or advisory committee was intended to address, the extent to
11-11 which the objectives have been achieved, and any activities of the
11-12 agency in addition to those granted by statute and the authority
11-13 for these activities;
11-14 (3) an assessment of less restrictive or alternative
11-15 methods of performing any regulation that the agency performs that
11-16 could adequately protect the public;
11-17 (4) the extent to which the advisory committee is
11-18 needed and is used;
11-19 (5) the extent to which the jurisdiction of the agency
11-20 and the programs administered by the agency overlap or duplicate
11-21 those of other agencies and the extent to which the programs
11-22 administered by the agency can be consolidated with the programs of
11-23 other state agencies;
11-24 (6) whether the agency has recommended to the
11-25 legislature statutory changes calculated to be of benefit to the
12-1 public rather than to an occupation, business, or institution that
12-2 the agency regulates;
12-3 (7) the promptness and effectiveness with which the
12-4 agency disposes of complaints concerning persons affected by the
12-5 agency;
12-6 (8) the extent to which the agency has encouraged
12-7 participation by the public in making its rules and decisions as
12-8 opposed to participation solely by those it regulates and the
12-9 extent to which the public participation has resulted in rules
12-10 compatible with the objectives of the agency;
12-11 (9) the extent to which the agency has complied with
12-12 applicable requirements of an agency of the United States or of
12-13 this state regarding equality of employment opportunity and the
12-14 rights and privacy of individuals;
12-15 (10) the extent to which changes are necessary in the
12-16 enabling statutes of the agency so that the agency can adequately
12-17 comply with the criteria listed in this section;
12-18 (11) the extent to which the agency issues and
12-19 enforces rules relating to potential conflicts of interest of its
12-20 employees;
12-21 (12) the extent to which the agency complies with
12-22 Chapter 552[,] and with Chapter 551; [and]
12-23 (13) the extent to which the agency has complied with
12-24 requirements of state law or state agency rules regarding
12-25 purchasing goals and programs for historically underutilized
13-1 businesses; and
13-2 (14) the effect of federal intervention or loss of
13-3 federal funds if the agency is abolished.
13-4 SECTION 10. Subchapter C, Chapter 552, Government Code, is
13-5 amended by adding Section 552.125 to read as follows:
13-6 Sec. 552.125. EXCEPTION: CERTAIN DOCUMENTS SUBMITTED FOR
13-7 CERTIFICATION AS A HISTORICALLY UNDERUTILIZED BUSINESS. All
13-8 financial and other types of private, confidential documentation
13-9 and information submitted for the purpose of determining economic
13-10 status and ownership interests of businesses under Chapter 2161 are
13-11 excepted from the requirements of Section 552.021.
13-12 SECTION 11. This Act takes effect September 1, 1997.
13-13 SECTION 12. The importance of this legislation and the
13-14 crowded condition of the calendars in both houses create an
13-15 emergency and an imperative public necessity that the
13-16 constitutional rule requiring bills to be read on three several
13-17 days in each house be suspended, and this rule is hereby suspended.