BILL ANALYSIS

C.S.H.B. 3782

By: Gallego

State Affairs

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Texas currently does not track participation of financial services firms and consultancies that are historically underutilized businesses. Texas municipalities collectively issued approximately $35 billion worth of bonds in 2005. The vast majority of financial services firms and consultancies are headquartered outside the state, and Texas does not fully realize the economic benefit when services are rendered by these firms.

C.S.H.B. 3782 requires a county with population greater than 500,000 or a municipality with a population greater than 250,000 to report participation of financial services firms and consultancies that are minority-owned or women-owned businesses. The bill encourages the development and growth of the financial services and consultancy industry in Texas.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the comptroller of public accounts in SECTION 1 of this bill.

ANALYSIS

C.S.H.B. 3782 amends the Government Code to require a municipality with a population of more than 250,000 or a county with a population of more than 500,000 to disclose to the comptroller of public accounts, at intervals and in the manner determined by the comptroller by rule, whether any of the financial services firms or consultancies advising the municipality or the county regarding municipal or county bonds are minority-owned or women-owned businesses. The bill requires the comptroller to compile the submitted information and to submit a report to the governor, the lieutenant governor, the speaker of the house of representatives, and the appropriate standing committees of the legislature, not later than December 1 of each even-numbered year.

C.S.H.B. 3782 requires the comptroller to adopt rules to implement the bill's provisions.

C.S.H.B. 3782 defines "minority-owned business" as a business entity at least 51 percent of which is owned by minority group members or, in the case of a corporation, at least 51 percent of the shares of which are owned by minority group members, and that is managed and, in daily operations, controlled by minority group members. The bill includes in the definition of "minority group members" African Americans, American Indians, Asian Americans, Americans of Hispanic origin, and persons with disabilities. The bill defines "women-owned business" as a business entity at least 51 percent of which is owned by women or, in the case of a corporation, at least 51 percent of the shares of which are owned by women, and that is managed and controlled by women in its daily operations.

EFFECTIVE DATE

September 1, 2009.

COMPARISON OF ORIGINAL AND SUBSTITUTE

C.S.H.B. 3782 differs from the original by making the bill applicable to a municipality with a population of more than 250,000 or a county with a population of more than 500,000, rather than a municipality or county with a population of more than 150,000, as in the original. The substitute removes a definition in the original for "historically underutilized business," adds definitions not in the original for "minority-owned business," "women-owned business," and "minority group members."

C.S.H.B. 3782 differs from the original by requiring a municipality or county to disclose whether any firms or consultancies advising it on bonds are minority-owned or women-owned businesses, rather than historically underutilized businesses as in the original.  The substitute differs from the original by requiring the municipality or county to make the disclosure not only at intervals determined by the comptroller by rule, as in the original, but also in the manner determined by the comptroller by rule.