HBA-ALS H.B. 2090 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2090
By: Cuellar
State Affairs
3/31/1999
Introduced



BACKGROUND AND PURPOSE 

There is a concern that some small businesses in Texas may be threatened by
competition from taxexempt organizations, such as state agencies and
political subdivisions, engaging in commercial forprofit activities. The
purpose of this bill is to provide small businesses a grievance procedure
regarding the tax-exempt status of a particular tax-exempt organization
engaging in commercial forprofit activities. 

H.B. 2090 prevents a state agency or political subdivision from engaging in
specific commercial practices unrelated to the purposes set out in its
charter, except in particular circumstances.  This bill allows a small
business to submit a complaint regarding an alleged violation to the
attorney general, and specifies the available remedies. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Title 2, Business & Commerce Code, by adding Chapter 21,
as follows: 

CHAPTER 21.  COMPETITION BETWEEN STATE AGENCY OR POLITICAL
SUBDIVISION AND PRIVATE BUSINESS

Sec. 21.01.  DEFINITIONS.  Defines "political subdivision,"  "small
business," and  "state agency."  

Sec. 21.02.  UNLAWFUL PRACTICES.  (a) Prohibits a  state agency or
political subdivision from funding, capitalizing, guaranteeing an
indebtedness or lease obligation of, or subsidizing a commercial business
that is unrelated to the state agency's or political subdivision's charter,
or other governing legal documents, unless the business is solely for the
use of the state agency's or political subdivision's employees, staff,
faculty, students, volunteers, patients, or residents or the business
involves sales to the public that are incidental or occasional and not
permanent, ongoing, or periodic.  

(b) Provides that a person is not considered an employee, staff or faculty
member, student, volunteer, patient, or resident of a state agency or
political subdivision, if the person's only relationship with the agency or
political subdivision is receiving a product or service from the commercial
business or a family relationship with a beneficiary of the state agency or
political subdivision.  

Sec. 21.03.  OTHER ACTIVITY.  Provides that a state agency or political
subdivision does not violate this chapter by making investments in publicly
traded stocks and bonds, real estate, or investments that are not under its
control or using its facilities to host groups meeting solely for
educational purposes.  

Sec. 21.04.  EXISTING BUSINESSES.  Makes application of this Act
prospective. 
 
Sec. 21.05. COMPLAINTS. Authorizes a small business to submit to the
attorney general a complaint regarding a violation of this chapter.
Requires  the attorney general to bring an action under Section 21.07,
issue to the small business a written determination under Section 21.06, or
issue a written statement as to why the action will not be brought or a
determination issued, no later than the 60th day after the date a complaint
is submitted.  Authorizes a small business, if the attorney general does
not bring the action or issue the written determination or statement, to
petition a court for a writ of mandamus ordering the attorney general to do
so. 

Sec. 21.06.  REMEDY.  Authorizes a small business that is determined by the
attorney general to have been aggrieved by a violation of this chapter to
bring an court action for injunctive relief, economic damages, or both.  

Sec. 21.07.  INJUNCTION.  Authorizes the attorney general to sue to enjoin
a person from violating this chapter. Prohibits the attorney general from
filing suit before the eighth day after the day on which the attorney
general notifies the person against whom the suit is to be brought.
Provides that if the attorney general intends to request that the court
issue a temporary restraining order, notice is not required and the
attorney general is authorized to immediately file suit. Entitles the
attorney general to recover all reasonable costs of prosecuting the case,
including specified costs and fees.  

SECTION 2.Effective date: September 1, 1999. 

SECTION 3.Emergency clause.