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A BILL TO BE ENTITLED
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AN ACT
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relating to the state designation of employee owned corporations. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 10, Subtitle D, 2161, Subchapter A, |
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Section 2161.001, Government Code, is amended to read as follows: |
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Sec. 2161.001. DEFINITIONS. In this chapter: |
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(1) "Goods" means supplies, materials, or equipment. |
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(2) "Historically underutilized business" means an |
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entity with its principal place of business in this state that is: |
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(A) a corporation formed for the purpose of |
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making a profit in which 51 percent or more of all classes of the |
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shares of stock or other equitable securities are owned by one or |
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more economically disadvantaged persons who have a proportionate |
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interest and actively participate in the corporation's control, |
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operation, and management; |
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(B) a sole proprietorship created for the purpose |
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of making a profit that is completely owned, operated, and |
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controlled by an economically disadvantaged person; |
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(C) a partnership formed for the purpose of |
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making a profit in which 51 percent or more of the assets and |
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interest in the partnership are owned by one or more economically |
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disadvantaged persons who have a proportionate interest and |
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actively participate in the partnership's control, operation, and |
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management; |
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(D) a joint venture in which each entity in the |
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venture is a historically underutilized business, as determined |
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under another paragraph of this subdivision; or |
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(E) a supplier contract between a historically |
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underutilized business as determined under another paragraph of |
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this subdivision and a prime contractor under which the |
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historically underutilized business is directly involved in the |
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manufacture or distribution of the goods or otherwise warehouses |
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and ships the goods. |
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(F) an employee owned company that the majority |
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of the company's stock is held by an employee stock ownership plan |
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(ESOP) created under Section 4975(e)(7), Internal Revenue Services |
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Code and has 500 employees or less. |
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(a) A business designated as a historically underutilized |
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business under Section 2 retains its status if it coverts to a |
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corporation under subsection (F). |
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SECTION 2. (a) The legislature shall establish a joint |
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interim committee to study the feasibility and desirability of |
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promoting and growing employee owned companies and employee stock |
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ownership plans in Texas. |
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(b) The committee is composed of: |
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(1) the members of the standing committee of the |
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senate that has primary jurisdiction over business and industry; |
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(2) the members of the standing committee of the house |
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of representatives that has primary jurisdiction over business and |
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industry; |
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(3) two members of the senate appointed by the |
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lieutenant governor, each of whom demonstrates experience in |
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employee owned companies; and |
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(4) two members of the house of representatives |
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appointed by the speaker of the house of representatives, each of |
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whom demonstrates experience in employee owned companies. |
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(c) The lieutenant governor and the speaker of the house of |
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representatives shall jointly designate a chair or, alternatively, |
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designate two co-chairs from among the committee membership. |
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(d) The committee may adopt rules necessary to carry out the |
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committee's duties under this section. |
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(e) Not later than December 1, 2018, the committee shall |
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report to the governor and the legislature the findings of the study |
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and any recommendations developed by the committee under this |
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section. |
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SECTION 3. This Act takes effect September 1, 2017. |