By Flores H.B. No. 1746
76R3648 JRD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to state contracting with historically underutilized
1-3 businesses.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 2161.001(2) and (3), Government Code,
1-6 are amended to read as follows:
1-7 (2) "Historically underutilized business" means:
1-8 (A) a corporation formed for the purpose of
1-9 making a profit in which 51 percent or more of all classes of the
1-10 shares of stock or other equitable securities are owned by one or
1-11 more economically [socially] disadvantaged persons who have a
1-12 proportionate interest and actively participate in the
1-13 corporation's control, operation, and management;
1-14 (B) a sole proprietorship created for the
1-15 purpose of making a profit that is completely owned, operated, and
1-16 controlled by an economically [a socially] disadvantaged person;
1-17 (C) a partnership formed for the purpose of
1-18 making a profit in which 51 percent or more of the assets and
1-19 interest in the partnership are owned by one or more economically
1-20 [socially] disadvantaged persons who have a proportionate interest
1-21 and actively participate in the partnership's control, operation,
1-22 and management;
1-23 (D) a joint venture in which each entity in the
1-24 venture is a historically underutilized business, as determined
2-1 under another paragraph of this subdivision; or
2-2 (E) a supplier contract between a historically
2-3 underutilized business as determined under another paragraph of
2-4 this subdivision and a prime contractor under which the
2-5 historically underutilized business is directly involved in the
2-6 manufacture or distribution of the goods or otherwise warehouses
2-7 and ships the goods.
2-8 (3) "Economically [Socially] disadvantaged person"
2-9 means a person who is economically [socially] disadvantaged because
2-10 of the person's identification as a member of a certain group,
2-11 including Black Americans, Hispanic Americans, women, Asian Pacific
2-12 Americans, and Native Americans, and who has suffered the effects
2-13 of discriminatory practices or other similar insidious
2-14 circumstances over which the person has no control.
2-15 SECTION 2. Section 2161.002, Government Code, is amended by
2-16 adding Subsection (c) to read as follows:
2-17 (c) In adopting rules to administer this chapter, the
2-18 commission shall adopt rules that are based on the results of the
2-19 disparity study prepared by the comptroller under Section 101,
2-20 Article V, Chapter 1051, Acts of the 73rd Legislature, Regular
2-21 Session, 1993 (the General Appropriations Act). If other similar
2-22 disparity studies are prepared on behalf of state government, the
2-23 commission shall revise the rules in response to the findings of
2-24 the latest disparity study.
2-25 SECTION 3. Subchapter A, Chapter 2161, Government Code, is
2-26 amended by adding Sections 2161.003, 2161.004, and 2161.005 to read
2-27 as follows:
3-1 Sec. 2161.003. AGENCY RULES. A state agency, including an
3-2 institution of higher education, shall adopt the commission's rules
3-3 under Section 2161.002 as the agency's or institution's own rules.
3-4 Those rules apply to the agency's construction projects and
3-5 purchases of goods and services without regard to whether a project
3-6 or purchase is otherwise subject to this subtitle.
3-7 Sec. 2161.004. APPLICABILITY. This chapter and rules adopted
3-8 by the commission under this chapter apply to state agency
3-9 construction projects and purchases of goods and services that are
3-10 made under the authority of this subtitle or other law.
3-11 Sec. 2161.005. REVOCATION OF DELEGATED PURCHASING AUTHORITY.
3-12 (a) If the state auditor reports to the commission under Section
3-13 2161.123(d) that a state agency is not complying with Section
3-14 2161.123 or is not making a good faith effort to implement the plan
3-15 adopted under that section, and the commission determines that,
3-16 one year after the date of the state auditor's report to the
3-17 commission, the agency is still either not complying with Section
3-18 2161.123 or not making a good faith effort to implement the plan
3-19 adopted under that section, the commission may revoke any
3-20 purchasing authority that the commission has delegated to the
3-21 agency.
3-22 (b) If the commission revokes an agency's delegated
3-23 purchasing authority under this section, the comptroller may
3-24 consider that fact in the event the commission needs a transfer of
3-25 the agency's appropriated funds to cover the costs to the
3-26 commission of assuming the agency's purchasing functions. The
3-27 amount transferred from the agency's funds to the commission shall
4-1 be an amount determined by the Legislative Budget Board.
4-2 SECTION 4. Section 2161.122, Government Code, is amended by
4-3 adding a new Subsection (c) and redesignating Subsections (c) and
4-4 (d) as Subsections (d) and (e) to read as follows:
4-5 (c) State agencies shall report to the commission in
4-6 accordance with Section 2161.125 the following information on
4-7 historically underutilized businesses with regard to the
4-8 expenditure of both treasury and nontreasury funds:
4-9 (1) the total dollar amount of purchases and payments
4-10 made under contracts awarded to historically underutilized
4-11 businesses;
4-12 (2) the number of payments received by each
4-13 historically underutilized business under each contract;
4-14 (3) the number of contracts awarded to historically
4-15 underutilized and all other businesses; and
4-16 (4) the number of bids, proposals, or other applicable
4-17 expressions of interest made by historically underutilized
4-18 businesses with regard to contracting opportunities with the
4-19 agency.
4-20 (d) A state agency participating in a group purchasing
4-21 program described under Section 2155.139(b) shall send to the
4-22 commission in the agency's report under Section 2161.121 a separate
4-23 list of purchases from historically underutilized businesses that
4-24 are made through the group purchasing program, including the dollar
4-25 amount of each purchase allocated to the reporting agency.
4-26 (e) [(d)] A state agency's report is a record of the
4-27 agency's purchases for which the agency selected the vendor. If
5-1 the vendor was selected by the commission as part of its state
5-2 contract program, the commission shall include the purchase in the
5-3 commission's report of its own purchases unless the commission made
5-4 a sole source purchase for the agency under Section 2155.067. The
5-5 state agency for which the purchase was made shall report the
5-6 selection of the vendor on its report as if the agency selected the
5-7 vendor when the agency drew specifications for goods or services
5-8 that are proprietary to one vendor.
5-9 SECTION 5. Section 2161.123, Government Code, is amended by
5-10 adding Subsections (d) and (e) to read as follows:
5-11 (d) The state auditor shall report to the commission a state
5-12 agency that is not complying with this section or is not making a
5-13 good faith effort to implement the plan adopted under this section.
5-14 In determining whether a state agency is making a good faith effort
5-15 to implement the plan, the state auditor shall consider at a
5-16 minimum whether the agency:
5-17 (1) has adopted rules under Section 2161.003;
5-18 (2) has used the commission's directory under Section
5-19 2161.064 and other resources to identify historically underutilized
5-20 businesses that are able and available to contract with the agency;
5-21 and
5-22 (3) has made good faith timely efforts to contact
5-23 identified historically underutilized businesses regarding
5-24 contracting opportunities.
5-25 (e) If the state auditor reports to the commission that a
5-26 state agency is not complying with this section or is not making a
5-27 good faith effort to implement the plan adopted under this section,
6-1 the commission shall assist the agency in complying or in making a
6-2 good faith effort to implement the plan.
6-3 SECTION 6. Section 2161.181, Government Code, is amended to
6-4 read as follows:
6-5 Sec. 2161.181. GOALS FOR PURCHASES OF GOODS AND SERVICES.
6-6 The commission by rule shall establish the state's percentage goals
6-7 for the purchase of goods or services from historically
6-8 underutilized businesses based on the disparity study prepared by
6-9 the comptroller under Section 101, Article V, Chapter 1051, Acts of
6-10 the 73rd Legislature, Regular Session, 1993 (the General
6-11 Appropriations Act), or based on a later relevant disparity study
6-12 prepared on behalf of state government. A state agency, including
6-13 the commission, shall make a good faith effort to assist
6-14 historically underutilized businesses to receive a percentage [not
6-15 less than 30 percent] of the total value of all contract awards for
6-16 the purchase of goods or services that the agency expects to make
6-17 during a fiscal year that meets or exceeds the goal established by
6-18 the commission.
6-19 SECTION 7. Section 2161.182(a), Government Code, is amended
6-20 to read as follows:
6-21 (a) The commission by rule shall establish the state's
6-22 percentage goals for the total value of each state agency
6-23 construction contract award that should be received by historically
6-24 underutilized businesses based on the disparity study prepared by
6-25 the comptroller under Section 101, Article V, Chapter 1051, Acts of
6-26 the 73rd Legislature, Regular Session, 1993 (the General
6-27 Appropriations Act), or based on a later relevant disparity study
7-1 prepared on behalf of state government. A state agency that
7-2 contracts for a construction project, including a project under
7-3 Section 2166.003, shall make a good faith effort to assist
7-4 historically underutilized businesses to receive a percentage [not
7-5 less than 30 percent] of the total value of each construction
7-6 contract award that the agency expects to make during a fiscal year
7-7 that meets or exceeds the goal established by the commission.
7-8 SECTION 8. Section 325.011, Government Code, is amended to
7-9 read as follows:
7-10 Sec. 325.011. CRITERIA FOR REVIEW. The commission and its
7-11 staff shall consider the following criteria in determining whether
7-12 a public need exists for the continuation of a state agency or its
7-13 advisory committees or for the performance of the functions of the
7-14 agency or its advisory committees:
7-15 (1) the efficiency with which the agency or advisory
7-16 committee operates;
7-17 (2) an identification of the objectives intended for
7-18 the agency or advisory committee and the problem or need that the
7-19 agency or advisory committee was intended to address, the extent to
7-20 which the objectives have been achieved, and any activities of the
7-21 agency in addition to those granted by statute and the authority
7-22 for these activities;
7-23 (3) an assessment of less restrictive or alternative
7-24 methods of performing any regulation that the agency performs that
7-25 could adequately protect the public;
7-26 (4) the extent to which the advisory committee is
7-27 needed and is used;
8-1 (5) the extent to which the jurisdiction of the agency
8-2 and the programs administered by the agency overlap or duplicate
8-3 those of other agencies and the extent to which the programs
8-4 administered by the agency can be consolidated with the programs of
8-5 other state agencies;
8-6 (6) whether the agency has recommended to the
8-7 legislature statutory changes calculated to be of benefit to the
8-8 public rather than to an occupation, business, or institution that
8-9 the agency regulates;
8-10 (7) the promptness and effectiveness with which the
8-11 agency disposes of complaints concerning persons affected by the
8-12 agency;
8-13 (8) the extent to which the agency has encouraged
8-14 participation by the public in making its rules and decisions as
8-15 opposed to participation solely by those it regulates and the
8-16 extent to which the public participation has resulted in rules
8-17 compatible with the objectives of the agency;
8-18 (9) the extent to which the agency has complied with
8-19 applicable requirements of:
8-20 (A) an agency of the United States or of this
8-21 state regarding equality of employment opportunity and the rights
8-22 and privacy of individuals; and
8-23 (B) state law and applicable rules of any state
8-24 agency regarding purchasing goals and programs for historically
8-25 underutilized businesses;
8-26 (10) the extent to which changes are necessary in the
8-27 enabling statutes of the agency so that the agency can adequately
9-1 comply with the criteria listed in this section;
9-2 (11) the extent to which the agency issues and
9-3 enforces rules relating to potential conflicts of interest of its
9-4 employees;
9-5 (12) the extent to which the agency complies with
9-6 Chapter 552, and with Chapter 551; and
9-7 (13) the effect of federal intervention or loss of
9-8 federal funds if the agency is abolished.
9-9 SECTION 9. This Act takes effect September 1, 1999.
9-10 SECTION 10. The importance of this legislation and the
9-11 crowded condition of the calendars in both houses create an
9-12 emergency and an imperative public necessity that the
9-13 constitutional rule requiring bills to be read on three several
9-14 days in each house be suspended, and this rule is hereby suspended.