Texas 2025 - 89th Regular

Texas Senate Bill SB2912 Compare Versions

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1	1	By: Miles S.B. No. 2912
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5	5
6	6	A BILL TO BE ENTITLED
7	7	AN ACT
8	8	relating to the state historically underutilized business program;
9	9	creating a criminal offense.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 2161.001, Government Code, is amended by
12	12	adding Subdivision (5) and (6) to read as follows:
13	13	(5) "Commercially useful function" means
14	14	responsibility for the execution of a distinct element of the work
15	15	of a contract and performance, management, and supervision of the
16	16	work involved, including:
17	17	(A) negotiation of the terms of a contract or
18	18	subcontract;
19	19	(B) assumption of financial risk commensurate
20	20	with a contract or subcontract;
21	21	(C) acquisition of appropriate lines of credit or
22	22	loans; or
23	23	(D) fulfillment of the responsibilities of a
24	24	joint venture partner under a joint venture agreement.
25	25	(6) "Disadvantaged business enterprise" means a
26	26	historically underutilized business as defined in Section 2161,
27	27	Government Code.
28	28	SECTION 2. Section 2161.0015, Government Code, is amended
29	29	to read as follows:
30	30	Sec. 2161.0015. DETERMINING SIZE STANDARDS FOR
31	31	HISTORICALLY UNDERUTILIZED BUSINESSES. To [The comptroller may
32	32	establish size standards that a business may not exceed if it is to]
33	33	be considered a historically underutilized business under this
34	34	chapter:
35	35	(1) the business owner may not have an individual
36	36	personal net worth of more than $1.32 million; and
37	37	(2) the business must:
38	38	(A) meet the Small Business Administration's
39	39	size standards for a small business for purposes of federal
40	40	government procurement under 13 C.F.R. Section 121.401, et seq.;
41	41	and
42	42	(B) have an annual gross income of not more than
43	43	$23.98 million. [In determining the size standards, the comptroller
44	44	shall determine the size at which a business should be considered
45	45	sufficiently large that the business probably does not
46	46	significantly suffer from the effects of past discriminatory
47	47	practices.]
48	48	SECTION 3. Section 2161.002(c), Government Code, is amended
49	49	to read as follows:
50	50	(c) In adopting rules to administer this chapter, the
51	51	comptroller shall adopt rules that are based on the results of the
52	52	"Texas Department of Transportation Disparity Study 2019" prepared
53	53	by Colette Holt & Associates ["State of Texas Disparity Study, A
54	54	Report to the Texas Legislature as Mandated by H.B. 2626, 73rd
55	55	Legislature, December 1994" (prepared by National Economic
56	56	Research Associates, Inc.)]. The comptroller shall revise the
57	57	rules in response to the findings of any updates of the study that
58	58	are prepared on behalf of the state.
59	59	SECTION 4. Section 2161.004(c), Government Code, is amended
60	60	to read as follows:
61	61	(c) Section 2161.003 and Subsections (a) and (b) of this
62	62	section [do not] apply to a project or contract subject to Section
63	63	201.702, Transportation Code.
64	64	SECTION 5. Section 2161.061, Government Code, is amended by
65	65	amending Subsections (a) and (e) and adding Subsections (a-1),
66	66	(a-2), and (a-3) to read as follows:
67	67	(a) The comptroller shall certify and recertify
68	68	historically underutilized businesses.
69	69	(a-1) A certification or recertification under this section
70	70	expires on the first anniversary of the date the certification or
71	71	recertification was issued.
72	72	(a-2) The comptroller may not initially certify a business
73	73	as a disadvantaged business enterprise unless each owner of the
74	74	business completes at least 32 hours of training provided by the
75	75	comptroller or a local government or nonprofit organization
76	76	approved by the comptroller to provide the training. The training
77	77	must include information regarding:
78	78	(1) the requirements of this chapter and rules adopted
79	79	under this chapter; and
80	80	(2) the programs available under 49 C.F.R. Part 26 and
81	81	the requirements for participation in those programs.
82	82	(a-3) The comptroller may not recertify a business as a
83	83	disadvantaged business enterprise unless each owner of the business
84	84	completes at least eight hours of continuing training provided by
85	85	the comptroller or a local government or nonprofit organization
86	86	approved by the comptroller to provide the continuing training.
87	87	(e) A local government or a nonprofit organization that
88	88	certifies historically underutilized businesses under Subsection
89	89	(c) or that conducts a certification program described by and
90	90	approved under Subsection (b) shall make available to the public an
91	91	online searchable database containing information about
92	92	historically underutilized businesses, minority business
93	93	enterprises, women's business enterprises, and disadvantaged
94	94	business enterprises certified by the local government or nonprofit
95	95	organization, including:
96	96	(1) the name of the business;
97	97	(2) the contact person or owner of the business;
98	98	(3) the address and telephone number of the business;
99	99	(4) the type or category of business, including
100	100	relevant capabilities of the business and the North American
101	101	Industry Classification System codes for the business; [and]
102	102	(5) the expiration date of the business's
103	103	certification; and
104	104	(6) the date of completion of training required under
105	105	this section.
106	106	SECTION 6. Sections 2161.062(b), (d), and (e), Government
107	107	Code, are amended to read as follows:
108	108	(b) The comptroller shall offer historically underutilized
109	109	businesses assistance, [and] training, and continuing training
110	110	regarding state procurement procedures.
111	111	(d) The comptroller shall send each historically
112	112	underutilized business [businesses] an orientation package on
113	113	certification or recertification. The package shall include:
114	114	(1) a certificate issued in the historically
115	115	underutilized business's name;
116	116	(2) a description of the significance and value of
117	117	certification;
118	118	(3) a list of state purchasing personnel;
119	119	(4) information regarding electronic commerce
120	120	opportunities;
121	121	(5) information regarding the Texas Marketplace
122	122	website; [and]
123	123	(6) additional information about the state
124	124	procurement process; and
125	125	(7) the business's current training and continuing
126	126	training status.
127	127	(e) A state agency with a biennial budget that exceeds $10
128	128	million shall designate a staff member to serve as the historically
129	129	underutilized businesses coordinator for the agency during the
130	130	fiscal year. The procurement director may serve as the coordinator.
131	131	In agencies that employ a historically underutilized businesses
132	132	coordinator, the position of coordinator, within the agency's
133	133	structure, must be at least equal to the position of procurement
134	134	director. In addition to any other responsibilities, the
135	135	coordinator shall:
136	136	(1) coordinate training programs for the recruitment,
137	137	training, and retention of historically underutilized businesses;
138	138	(2) report required information to the comptroller
139	139	annually; and
140	140	(3) match historically underutilized businesses with
141	141	key staff within the agency.
142	142	SECTION 7. Section 2161.063(a), Government Code, is amended
143	143	to read as follows:
144	144	(a) The comptroller shall encourage state agencies to use
145	145	historically underutilized businesses by:
146	146	(1) working with state agencies to establish a
147	147	statewide policy for increasing the use of historically
148	148	underutilized businesses;
149	149	(2) assisting state agencies in seeking historically
150	150	underutilized businesses capable of supplying required goods or
151	151	services;
152	152	(3) assisting state agencies in identifying and
153	153	advising historically underutilized businesses on the types of
154	154	goods and services the agencies need; [and]
155	155	(4) assisting state agencies in increasing the amount
156	156	of business placed with historically underutilized businesses; and
157	157	(5) assisting state agencies in identifying
158	158	disadvantaged business enterprise that can perform commercially
159	159	useful functions for agencies.
160	160	SECTION 8. Section 2161.064, Government Code, is amended by
161	161	adding Subsection (f) to read as follows:
162	162	(f) The comptroller shall verify that each disadvantaged
163	163	business enterprise listed in the directory is in full compliance
164	164	with the training requirements under Section 2161.061.
165	165	SECTION 9. Section 2161.065, Government Code, is amended by
166	166	amending Subsection (a) and adding Subsection (c) to read as
167	167	follows:
168	168	(a) The comptroller shall design and oversee the
169	169	implementation by state agencies of a mentor-protege program to
170	170	foster long-term relationships between prime contractors and
171	171	historically underutilized businesses and to increase the ability
172	172	of historically underutilized businesses to contract with the state
173	173	or to receive subcontracts under a state contract. Each state
174	174	agency with a biennial appropriation that exceeds $10 million shall
175	175	implement and require participation in the program designed by the
176	176	comptroller.
177	177	(c) The mentor-protege program under this section must be
178	178	consistent with the program established under 49 C.F.R. Section
179	179	26.35.
180	180	SECTION 10. Section 2161.066(d), Government Code, is
181	181	amended to read as follows:
182	182	(d) Each state agency that has a historically underutilized
183	183	businesses coordinator shall:
184	184	(1) design its own program and model the program to the
185	185	extent appropriate on the program developed by the comptroller
186	186	under this section; [and]
187	187	(2) sponsor presentations by disadvantaged business
188	188	enterprise at the agency; and
189	189	(3) provide a method for a disadvantaged business
190	190	enterprise to provide documentation through a state-approved
191	191	source that the business is able to perform a commercially useful
192	192	function in the industry for which the business is certified as a
193	193	disadvantaged business enterprise, according to the North American
194	194	Industry Classification System.
195	195	SECTION 11. Section 2161.121(a), Government Code, is
196	196	amended to read as follows:
197	197	(a) The comptroller shall prepare a consolidated report
198	198	that:
199	199	(1) includes the number and dollar amount of contracts
200	200	awarded and paid to historically underutilized businesses
201	201	certified by the comptroller;
202	202	(2) analyzes the relative level of opportunity for
203	203	historically underutilized businesses for various categories of
204	204	acquired goods and services; [and]
205	205	(3) tracks, by vendor identification number and, to
206	206	the extent allowed by federal law, by social security number, the
207	207	graduation rates for historically underutilized businesses that
208	208	grew to exceed the size standards determined by the comptroller;
209	209	and
210	210	(4) includes assurances by state agencies that the
211	211	number and the dollar amounts of contracts awarded to disadvantaged
212	212	business enterprise es are properly calculated according to the
213	213	level of participation each disadvantaged business enterprise
214	214	performs for purposes of determining the amount that could be
215	215	counted toward a disadvantaged business enterprise participation
216	216	goal under 49 C.F.R. Section 26.55.
217	217	SECTION 12. Sections 2161.122(b), (c), and (d), Government
218	218	Code, are amended to read as follows:
219	219	(b) A contractor or supplier awarded a contract by a state
220	220	agency shall report to the agency the identity of each historically
221	221	underutilized business to whom the contractor or supplier awarded a
222	222	subcontract for the purchase of goods or services and certify that
223	223	the disadvantaged business enterprise can perform a commercially
224	224	useful function.
225	225	(c) Each state agency shall report to the comptroller in
226	226	accordance with Section 2161.125 the following information with
227	227	regard to the expenditure of both treasury and nontreasury funds:
228	228	(1) the total dollar amount of purchases and payments
229	229	made under contracts awarded to historically underutilized
230	230	businesses that could be counted toward a disadvantaged business
231	231	enterprise participation goal under 49 C.F.R. Section 26.55;
232	232	(2) the number of businesses participating in any
233	233	issuance of state bonds by the agency;
234	234	(3) the number of contracts awarded to businesses with
235	235	regard to the agency's acquisition, construction, or equipping of a
236	236	facility or implementation of a program; and
237	237	(4) the number of bids, proposals, or other applicable
238	238	expressions of interest made by historically underutilized
239	239	businesses with regard to the agency's acquisition, construction,
240	240	or equipping of a facility or implementation of a program.
241	241	(d) A state agency participating in a group purchasing
242	242	program shall send to the comptroller in the agency's report under
243	243	Section 2161.121 a separate list of purchases from historically
244	244	underutilized businesses that are made through the group purchasing
245	245	program, including the dollar amount of each purchase allocated to
246	246	the reporting agency that could be counted toward a disadvantaged
247	247	business enterprise participation goal under 49 C.F.R. Section
248	248	26.55.
249	249	SECTION 13. Sections 2161.123(a) and (d), Government Code,
250	250	are amended to read as follows:
251	251	(a) Each state agency, including the comptroller, that is
252	252	required to have a strategic plan under Chapter 2056 shall include
253	253	in its strategic plan a written plan for increasing the agency's use
254	254	of historically underutilized businesses in purchasing and public
255	255	works contracting and for monitoring the agency's use of
256	256	disadvantaged business enterprise based on amounts that could be
257	257	counted toward a disadvantaged business enterprise participation
258	258	goal under 49 C.F.R. Section 26.55. The governing board of each
259	259	university system or institution of higher education not included
260	260	in a university system, other than a public junior college, shall
261	261	prepare a written plan for increasing the use of historically
262	262	underutilized businesses in purchasing and public works
263	263	contracting by the system or institution.
264	264	(d) The comptroller and the state auditor shall cooperate to
265	265	develop procedures providing for random periodic monitoring of
266	266	state agency compliance with this section. The state auditor shall
267	267	report to the comptroller a state agency that is not complying with
268	268	this section. In determining whether a state agency is making a
269	269	good faith effort to comply, the state auditor shall consider
270	270	whether the agency:
271	271	(1) has adopted rules under Section 2161.003;
272	272	(2) has used the comptroller's directory under Section
273	273	2161.064 and other resources to identify certified and qualified
274	274	historically underutilized businesses that are able and available
275	275	to contract with the agency;
276	276	(3) made good faith, timely efforts to contact
277	277	identified historically underutilized businesses regarding
278	278	contracting opportunities;
279	279	(4) conducted its procurement program in accordance
280	280	with the good faith effort methodology set out in comptroller
281	281	rules; and
282	282	(5) established goals for contracting with
283	283	historically underutilized businesses in each procurement category
284	284	based on:
285	285	(A) scheduled fiscal year expenditures; and
286	286	(B) the availability of historically
287	287	underutilized businesses in each category as determined by rules
288	288	adopted under Section 2161.002.
289	289	SECTION 14. Section 2161.125, Government Code, is amended
290	290	to read as follows:
291	291	Sec. 2161.125. CATEGORIZATION OF HISTORICALLY
292	292	UNDERUTILIZED BUSINESSES; TRAINING INFORMATION. (a) The
293	293	comptroller, in cooperation with each state agency reporting under
294	294	this subchapter, shall categorize each historically underutilized
295	295	business included in a report under this subchapter by sex, race,
296	296	and ethnicity and by whether the business qualifies as a
297	297	historically underutilized business because it is owned or owned,
298	298	operated, and controlled, as applicable, wholly or partly by one or
299	299	more veterans as defined by 38 U.S.C. Section 101(2) who have
300	300	suffered at least a 20 percent service-connected disability as
301	301	defined by 38 U.S.C. Section 101(16).
302	302	(b) The report under Subsection (a) must also state whether
303	303	the disadvantaged business enterprise owners have completed
304	304	training and continuing training required by Section 2161.061 and
305	305	whether the business can perform a commercially useful function.
306	306	SECTION 15. Section 2161.181, Government Code, is amended
307	307	to read as follows:
308	308	Sec. 2161.181. GOALS FOR PURCHASES OF GOODS AND SERVICES. A
309	309	state agency, including the comptroller, shall make a good faith
310	310	effort to increase the contract awards for the purchase of goods or
311	311	services that the agency expects to make during a fiscal year to
312	312	historically underutilized businesses based on rules adopted by the
313	313	comptroller to implement the disparity study described by Section
314	314	2161.002(c). The agency's efforts and achievement of its goals
315	315	under this section must be measured based on amounts that could be
316	316	counted toward a disadvantaged business enterprise participation
317	317	goal under 49 C.F.R. Section 26.55.
318	318	SECTION 16. Section 2161.182(a), Government Code, is
319	319	amended to read as follows:
320	320	(a) A state agency that contracts for a construction
321	321	project, including a project under Section 2166.003, shall make a
322	322	good faith effort to increase the construction contract awards that
323	323	the agency expects to make during a fiscal year to historically
324	324	underutilized businesses based on rules adopted by the comptroller
325	325	to implement the disparity study described by Section 2161.002(c).
326	326	The agency's efforts and achievement of its goals under this
327	327	subsection must be measured based on amounts that could be counted
328	328	toward a disadvantaged business enterprise participation goal
329	329	under 49 C.F.R. Section 26.55.
330	330	SECTION 17. Section 2161.231, Government Code, is amended
331	331	by adding Subsection (a-1) to read as follows:
332	332	(a-1) A person commits an offense if the person
333	333	intentionally makes a false report under this subtitle regarding an
334	334	award of a purchasing contract or public works contract to a
335	335	disadvantaged business enterprise.
336	336	SECTION 18. Section 2161.252, Government Code, is amended
337	337	by adding Subsection (c) to read as follows:
338	338	(c) A state agency may not approve a disadvantaged business
339	339	enterprise subcontracting plan or award a contract to which the
340	340	plan relates unless the plan has been approved by the agency's good
341	341	faith effort review committee established under Section 2161.2521.
342	342	SECTION 19. Subchapter F, Chapter 2161, Government Code, is
343	343	amended by adding Section 2161.2521 to read as follows:
344	344	Sec. 2161.2521. GOOD FAITH EFFORT REVIEW COMMITTEE. (a) A
345	345	state agency that determines that there is a probability for
346	346	subcontracting opportunities under Section 2161.252 shall
347	347	establish a good faith effort review committee for the purpose of
348	348	reviewing any subcontracting plans.
349	349	(b) The committee shall consist of five members, including:
350	350	(1) three members from the state disadvantaged
351	351	business enterprise community;
352	352	(2) one member from the state agency; and
353	353	(3) one member from the prime contracting community.
354	354	SECTION 20. Sections 2161.253(b) and (c), Government Code,
355	355	are amended to read as follows:
356	356	(b) To the extent that subcontracts are not contracted for
357	357	as originally submitted in the historically underutilized business
358	358	subcontracting plan, the contractor shall report to the state
359	359	agency and the agency's good faith effort review committee all the
360	360	circumstances that explain that fact and describe the good faith
361	361	efforts made to find and subcontract with another historically
362	362	underutilized business.
363	363	(c) The state agency and the agency's good faith effort
364	364	review committee shall audit the contractor's compliance with the
365	365	historically underutilized business subcontracting plan. In
366	366	determining whether the contractor made the required good faith
367	367	effort, the agency may not consider the success or failure of the
368	368	contractor to subcontract with historically underutilized
369	369	businesses in any specific quantity. The agency's determination is
370	370	restricted to considering factors indicating good faith.
371	371	SECTION 21. Section 2161.065(b), Government Code, is
372	372	repealed.
373	373	SECTION 22. The changes in law made by this Act apply only
374	374	to a contract for which the request for bids or proposals or other
375	375	applicable expressions of interest, if applicable, is made public
376	376	on or after the effective date of this Act.
377	377	SECTION 23. This Act takes effect September 1, 2025.