By Maxey                                              H.B. No. 2878
         76R7583 JRD-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a preference in state contracting for products and
 1-3     services offered by small businesses based in Texas.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 2155.444(a), Government Code, is amended
 1-6     to read as follows:
 1-7           (a)  Except as provided by Section 2155.4441, the [The]
 1-8     commission and all state agencies making purchases of goods,
 1-9     including agricultural products, shall give preference to those
1-10     produced or grown in this state or offered by Texas bidders as
1-11     follows:
1-12                 (1)  goods produced in this state or offered by Texas
1-13     bidders shall equally be given preference if the cost to the state
1-14     and quality are equal; and
1-15                 (2)  agricultural products grown in this state shall be
1-16     given first preference and agricultural products offered by Texas
1-17     bidders shall be given second preference, if the cost to the state
1-18     and quality are equal.
1-19           SECTION 2.  Subchapter H, Chapter 2155, Government Code, is
1-20     amended by adding Section 2155.4441 to read as follows:
1-21           Sec. 2155.4441.  PREFERENCE TO PRODUCTS AND SERVICES OFFERED
1-22     BY TEXAS SMALL BUSINESSES.  (a)  In this section:
1-23                 (1)  "Agricultural products" has the meaning assigned
1-24     by Section 2155.444.
 2-1                 (2)  "Texas small business" means a legal entity,
 2-2     including a corporation, partnership, or sole proprietorship that:
 2-3                       (A)  is formed for the purpose of making a
 2-4     profit;
 2-5                       (B)  is independently owned and operated;
 2-6                       (C)  has fewer than 100 employees or less than $1
 2-7     million in annual gross receipts; and
 2-8                       (D)  has its principal place of business in this
 2-9     state.
2-10           (b)  The commission and each state agency when purchasing or
2-11     leasing a product, including an agricultural product, or
2-12     contracting for a service shall purchase or lease a product or
2-13     contract for a service that is offered by a Texas small business
2-14     instead of a product or service offered by an entity that is not a
2-15     Texas small business if:
2-16                 (1)  the cost of the product or service offered by the
2-17     Texas small business is not more than five percent higher than the
2-18     cost of the product or service offered by the entity that is not a
2-19     Texas small business; and
2-20                 (2)  the quality of the product or service offered by
2-21     the Texas small business equals or exceeds the quality of the
2-22     product or service offered by the entity that is not a Texas small
2-23     business.
2-24           SECTION 3.  This Act takes effect September 1, 1999, and the
2-25     change in law made by this Act applies only to a purchase or lease
2-26     of a product by a state agency or a contract for a service entered
2-27     into by a state agency for which the request for bids, proposals,
 3-1     or other applicable expressions of interest is first disseminated
 3-2     on or after that date.
 3-3           SECTION 4.  The importance of this legislation and the
 3-4     crowded condition of the calendars in both houses create an
 3-5     emergency and an imperative public necessity that the
 3-6     constitutional rule requiring bills to be read on three several
 3-7     days in each house be suspended, and this rule is hereby suspended.