Texas 2019 - 86th Regular

Texas House Bill HB1198 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	86R27909 TSR-D
2		-	By: Shine, Guillen, Raney H.B. No. 1198
3		-	Substitute the following for H.B. No. 1198:
4		-	By: Holland C.S.H.B. No. 1198
	1	+	86R3212 TSR-D
	2	+	By: Shine H.B. No. 1198
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9		-	relating to companies in which employees have ownership interests
10		-	through employee stock ownership plans.
	7	+	relating to employee-owned companies.
11	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	9		SECTION 1. Section 301.004, Business Organizations Code, is
13	10		amended to read as follows:
14	11		Sec. 301.004. AUTHORIZED PERSON. For purposes of this
15	12		title, a person is an authorized person with respect to:
16	13		(1) a professional association if the person is a
17	14		professional individual; [and]
18	15		(2) a [professional corporation or a] professional
19	16		limited liability company if the person is a professional
20	17		individual or professional organization; and
21	18		(3) a professional corporation if the person is:
22	19		(A) a professional individual;
23	20		(B) a professional organization; or
24	21		(C) an employee stock ownership plan, as
25	22		described by Section 303.0015, established by the corporation.
26	23		SECTION 2. Chapter 303, Business Organizations Code, is
27	24		amended by adding Section 303.0015 to read as follows:
28	25		Sec. 303.0015. AUTHORIZED PERSON. For purposes of this
29	26		chapter, an employee stock ownership plan, as defined by Section
30	27		4975(e) of the Internal Revenue Code, established by a professional
31	28		corporation, is an authorized person if:
32	29		(1) all of the voting trustees of the plan are
33	30		professional individuals who are licensed to provide at least one
34	31		category of the professional services described in the
35	32		corporation's certificate of formation; and
36	33		(2) the ownership interests in the plan are not
37	34		directly issued to any person other than the plan trust or a
38	35		professional individual licensed to provide at least one category
39	36		of the professional services described in the corporation's
40	37		certificate of formation.
41	38		SECTION 3. Chapter 481, Government Code, is amended by
42	39		adding Subchapter CC to read as follows:
43	40		SUBCHAPTER CC. EMPLOYEE OWNERSHIP ASSISTANCE OFFICE
44	41		Sec. 481.451. ESTABLISHMENT OF EMPLOYEE OWNERSHIP
45	42		ASSISTANCE OFFICE. The employee ownership assistance office is an
46	43		office within the Texas Economic Development and Tourism Office.
47	44		Sec. 481.452. DUTIES. (a) The employee ownership
48	45		assistance office shall establish and administer for businesses in
49	46		this state:
50	47		(1) an outreach and information dissemination program
51	48		to foster increased awareness of employee stock ownership plans;
52	49		and
53	50		(2) a technical assistance program to assist
54	51		businesses in determining the feasibility of establishing an
55	52		employee stock ownership plan.
56	53		(b) The employee ownership assistance office shall make
57	54		available to businesses in this state information relating to
58	55		obtaining assistance under the programs established under
59	56		Subsection (a).
60	57		SECTION 4. Subchapter H, Chapter 2155, Government Code, is
61	58		amended by adding Section 2155.454 to read as follows:
62	59		Sec. 2155.454. PREFERENCE TO TEXAS EMPLOYEE-OWNED
63	60		COMPANIES. (a) In this section, "employee-owned company" means a
64	61		corporation in which a majority of the stock is held by an employee
65		-	stock ownership plan, as defined by Section 4975(e), ~~Internal~~
66		-	Revenue Code of 1986.
	62	+	stock ownership plan, as that term is defined by Section 4975(e),
	63	+	Internal Revenue Code of 1986.
67	64		(b) The comptroller and all state agencies purchasing goods
68	65		or services may give preference to an employee-owned company
69	66		domiciled in this state if other considerations are equal.
70		-	SECTION 5. Section 2161.001, Government Code, is amended by
71		-	amending Subdivision (2) and adding Subdivisions (3-a) and (3-b) to
72		-	read as follows:
	67	+	SECTION 5. Section 2161.001(2), Government Code, is amended
	68	+	to read as follows:
73	69		(2) "Historically underutilized business" means an
74	70		entity with its principal place of business in this state that is:
75	71		(A) a corporation formed for the purpose of
76	72		making a profit in which 51 percent or more of all classes of the
77	73		shares of stock or other equitable securities are owned by one or
78	74		more economically disadvantaged persons who have a proportionate
79	75		interest and actively participate in the corporation's control,
80	76		operation, and management;
81	77		(B) a sole proprietorship created for the purpose
82	78		of making a profit that is completely owned, operated, and
83	79		controlled by an economically disadvantaged person;
84	80		(C) a partnership formed for the purpose of
85	81		making a profit in which 51 percent or more of the assets and
86	82		interest in the partnership are owned by one or more economically
87	83		disadvantaged persons who have a proportionate interest and
88	84		actively participate in the partnership's control, operation, and
89	85		management;
90	86		(D) a joint venture in which each entity in the
91	87		venture is a historically underutilized business, as determined
92	88		under another paragraph of this subdivision; [or]
93	89		(E) a supplier contract between a historically
94	90		underutilized business as determined under another paragraph of
95	91		this subdivision and a prime contractor under which the
96	92		historically underutilized business is directly involved in the
97	93		manufacture or distribution of the goods or otherwise warehouses
98	94		and ships the goods; or
99		-	(F) an employee-owned company in which 51 percent
100		-	or more of the ownership interests in the company, including
101		-	interests determined under Section 2161.0013, are held by
102		-	economically disadvantaged persons who have a proportionate
103		-	interest and actively participate in the company's control,
104		-	operation, and management, including as voting trustees of an
105		-	employee stock ownership plan of the company.
106		-	(3-a) "Employee-owned company" has the meaning
107		-	assigned by Section 2155.454.
108		-	(3-b) "Employee stock ownership plan" has the meaning
109		-	assigned by Section 4975(e), Internal Revenue Code of 1986.
110		-	SECTION 6. Subchapter A, Chapter 2161, Government Code, is
111		-	amended by adding Section 2161.0013 to read as follows:
112		-	Sec. 2161.0013. DETERMINING OWNERSHIP INTEREST IN
113		-	EMPLOYEE-OWNED COMPANY. For purposes of determining the ownership
114		-	interests in an employee-owned company, the allocated shares of
115		-	stock in the account of a plan participant of an employee stock
116		-	ownership plan of the company are considered to be owned by the plan
117		-	participant.
118		-	SECTION 7. Subchapter B, Chapter 2161, Government Code, is
119		-	amended by adding Section 2161.0611 to read as follows:
120		-	Sec. 2161.0611. RETENTION OF STATUS AS HISTORICALLY
121		-	UNDERUTILIZED BUSINESS. If a business described by Section
122		-	2161.001(2)(A), (B), (C), or (D) is certified as a historically
123		-	underutilized business and the business establishes an employee
124		-	stock ownership plan that causes the business to lose status as a
125		-	historically underutilized business or eligibility for
126		-	recertification as a historically underutilized business, the
127		-	business retains that status or eligibility for a period of not more
128		-	than five years after the date the business establishes the plan.
129		-	SECTION 8. Section 2161.125, Government Code, is amended to
	95	+	(F) an employee-owned company as defined by
	96	+	Section 2155.454.
	97	+	SECTION 6. Section 2161.061, Government Code, is amended by
	98	+	adding Subsection (f) to read as follows:
	99	+	(f) A business that has been certified under this section as
	100	+	a historically underutilized business described by Section
	101	+	2161.001(2)(A), (B), (C), (D), or (E) retains the business's status
	102	+	as a historically underutilized business if the business converts
	103	+	to a historically underutilized business described by Section
	104	+	2161.001(2)(F).
	105	+	SECTION 7. Section 2161.125, Government Code, is amended to
130	106		read as follows:
131	107		Sec. 2161.125. CATEGORIZATION OF HISTORICALLY
132	108		UNDERUTILIZED BUSINESSES. The comptroller, in cooperation with
133	109		each state agency reporting under this subchapter, shall categorize
134	110		each historically underutilized business included in a report under
135	111		this subchapter by:
136	112		(1) sex, race, and ethnicity; and
137	113		(2) [by] whether the business qualifies as a
138	114		historically underutilized business:
139	115		(A) because it is owned or owned, operated, and
140	116		controlled, as applicable, wholly or partly by one or more veterans
141	117		as defined by 38 U.S.C. Section 101(2) who have suffered at least a
142	118		20 percent service-connected disability as defined by 38 U.S.C.
143	119		Section 101(16); or
144	120		(B) under Section 2161.001(2)(F).
145		-	SECTION 9. Subchapter Z, Chapter 271, Local Government
	121	+	SECTION 8. Subchapter Z, Chapter 271, Local Government
146	122		Code, is amended by adding Section 271.909 to read as follows:
147	123		Sec. 271.909. PREFERENCE TO TEXAS EMPLOYEE-OWNED
148	124		COMPANIES. (a) In this section:
149	125		(1) "Employee-owned company" has the meaning assigned
150	126		by Section 2155.454, Government Code.
151	127		(2) "Local government" means a municipality, a county,
152	128		or a special district.
153	129		(b) In purchasing goods or services, a local government may
154	130		give preference to an employee-owned company domiciled in this
155	131		state if other considerations are equal.
156		-	SECTION 10. This Act takes effect September 1, 2019.
	132	+	SECTION 9. This Act takes effect September 1, 2019.