| 1 | 1 | | 81R384 HLT-D |
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| 2 | 2 | | By: Gallegos S.B. No. 1196 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to administrative and contract provisions applicable to |
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| 8 | 8 | | certain nonprofit corporations located in large counties. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Chapter 22, Business Organizations Code, is |
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| 11 | 11 | | amended by adding Subchapter J to read as follows: |
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| 12 | 12 | | SUBCHAPTER J. ADMINISTRATIVE AND CONTRACT PROVISIONS APPLICABLE TO |
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| 13 | 13 | | CERTAIN NONPROFIT CORPORATIONS LOCATED IN LARGE COUNTIES |
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| 14 | 14 | | Sec. 22.451. APPLICABILITY OF SUBCHAPTER. This subchapter |
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| 15 | 15 | | applies only to a nonprofit corporation: |
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| 16 | 16 | | (1) whose principal office is located in a county with |
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| 17 | 17 | | a population of 3.3 million or more; and |
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| 18 | 18 | | (2) that contracts with a local government |
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| 19 | 19 | | corporation. |
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| 20 | 20 | | Sec. 22.452. BOARD OF DIRECTORS TO REFLECT DIVERSITY OF |
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| 21 | 21 | | CONSTITUENTS. An appointment to a board of directors of a nonprofit |
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| 22 | 22 | | corporation described by Section 22.451 must be made with the |
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| 23 | 23 | | intent to ensure that the board reflects the diversity of the |
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| 24 | 24 | | constituency served by the nonprofit corporation. |
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| 25 | 25 | | Sec. 22.453. NONPROFIT CORPORATION SUBJECT TO OPEN RECORDS |
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| 26 | 26 | | ACT. A nonprofit corporation described by Section 22.451 is |
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| 27 | 27 | | subject to Chapter 552, Government Code, in the same manner as a |
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| 28 | 28 | | governmental body. |
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| 29 | 29 | | Sec. 22.454. CONTRACTS FOR HISTORICALLY UNDERUTILIZED |
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| 30 | 30 | | BUSINESSES. (a) A nonprofit corporation described by Section |
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| 31 | 31 | | 22.451 shall make a reasonable effort to award contracts or |
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| 32 | 32 | | subcontracts associated with a project it operates, maintains, or |
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| 33 | 33 | | constructs to historically underutilized businesses. |
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| 34 | 34 | | (b) In this section, "historically underutilized business" |
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| 35 | 35 | | means: |
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| 36 | 36 | | (1) a corporation formed for the purpose of making a |
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| 37 | 37 | | profit in which at least 51 percent of all classes of the shares of |
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| 38 | 38 | | stock or other equitable securities is owned, managed, and in daily |
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| 39 | 39 | | operations controlled by one or more persons who have been |
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| 40 | 40 | | historically underutilized because of their identification as |
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| 41 | 41 | | members of certain groups, including African Americans, Hispanic |
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| 42 | 42 | | Americans, women, Asian Pacific Americans, and Native Americans, |
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| 43 | 43 | | who have suffered the effects of discriminatory practices or |
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| 44 | 44 | | similar invidious circumstances over which they have no control; |
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| 45 | 45 | | (2) a sole proprietorship formed for the purpose of |
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| 46 | 46 | | making a profit that is 100 percent owned and in daily operation is |
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| 47 | 47 | | controlled by a person described by Subdivision (1); |
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| 48 | 48 | | (3) a partnership formed for the purpose of making a |
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| 49 | 49 | | profit in which at least 51 percent of the assets and interest in |
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| 50 | 50 | | the partnership are owned by one or more persons described by |
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| 51 | 51 | | Subdivision (1) and who also have proportionate interest in the |
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| 52 | 52 | | control, daily operation, and management of the partnership's |
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| 53 | 53 | | affairs; |
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| 54 | 54 | | (4) a joint venture in which each entity in the joint |
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| 55 | 55 | | venture is a historically underutilized business; or |
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| 56 | 56 | | (5) a supplier contract between a historically |
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| 57 | 57 | | underutilized business and a prime contractor under which the |
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| 58 | 58 | | historically underutilized business is directly involved in the |
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| 59 | 59 | | manufacture or distribution of the supplies or materials or |
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| 60 | 60 | | otherwise warehouses and ships the supplies or materials. |
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| 61 | 61 | | SECTION 2. Section 22.454, Business Organizations Code, as |
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| 62 | 62 | | added by this Act, applies only to a contract that is entered into |
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| 63 | 63 | | on or after the effective date of this Act. A contract entered into |
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| 64 | 64 | | before the effective date of this Act is governed by the law in |
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| 65 | 65 | | effect on the date the contract was entered into, and the former law |
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| 66 | 66 | | is continued in effect for that purpose. |
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| 67 | 67 | | SECTION 3. This Act takes effect immediately if it receives |
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| 68 | 68 | | a vote of two-thirds of all the members elected to each house, as |
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| 69 | 69 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 70 | 70 | | Act does not receive the vote necessary for immediate effect, this |
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| 71 | 71 | | Act takes effect September 1, 2009. |
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