81R384 HLT-D
By: Gallegos S.B. No. 1196
A BILL TO BE ENTITLED
AN ACT
relating to administrative and contract provisions applicable to
certain nonprofit corporations located in large counties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 22, Business Organizations Code, is
amended by adding Subchapter J to read as follows:
SUBCHAPTER J. ADMINISTRATIVE AND CONTRACT PROVISIONS APPLICABLE TO
CERTAIN NONPROFIT CORPORATIONS LOCATED IN LARGE COUNTIES
Sec. 22.451. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a nonprofit corporation:
(1) whose principal office is located in a county with
a population of 3.3 million or more; and
(2) that contracts with a local government
corporation.
Sec. 22.452. BOARD OF DIRECTORS TO REFLECT DIVERSITY OF
CONSTITUENTS. An appointment to a board of directors of a nonprofit
corporation described by Section 22.451 must be made with the
intent to ensure that the board reflects the diversity of the
constituency served by the nonprofit corporation.
Sec. 22.453. NONPROFIT CORPORATION SUBJECT TO OPEN RECORDS
ACT. A nonprofit corporation described by Section 22.451 is
subject to Chapter 552, Government Code, in the same manner as a
governmental body.
Sec. 22.454. CONTRACTS FOR HISTORICALLY UNDERUTILIZED
BUSINESSES. (a) A nonprofit corporation described by Section
22.451 shall make a reasonable effort to award contracts or
subcontracts associated with a project it operates, maintains, or
constructs to historically underutilized businesses.
(b) In this section, "historically underutilized business"
means:
(1) a corporation formed for the purpose of making a
profit in which at least 51 percent of all classes of the shares of
stock or other equitable securities is owned, managed, and in daily
operations controlled by one or more persons who have been
historically underutilized because of their identification as
members of certain groups, including African Americans, Hispanic
Americans, women, Asian Pacific Americans, and Native Americans,
who have suffered the effects of discriminatory practices or
similar invidious circumstances over which they have no control;
(2) a sole proprietorship formed for the purpose of
making a profit that is 100 percent owned and in daily operation is
controlled by a person described by Subdivision (1);
(3) a partnership formed for the purpose of making a
profit in which at least 51 percent of the assets and interest in
the partnership are owned by one or more persons described by
Subdivision (1) and who also have proportionate interest in the
control, daily operation, and management of the partnership's
affairs;
(4) a joint venture in which each entity in the joint
venture is a historically underutilized business; or
(5) a supplier contract between a historically
underutilized business and a prime contractor under which the
historically underutilized business is directly involved in the
manufacture or distribution of the supplies or materials or
otherwise warehouses and ships the supplies or materials.
SECTION 2. Section 22.454, Business Organizations Code, as
added by this Act, applies only to a contract that is entered into
on or after the effective date of this Act. A contract entered into
before the effective date of this Act is governed by the law in
effect on the date the contract was entered into, and the former law
is continued in effect for that purpose.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.