2005 Texas Government Code CHAPTER 2161. HISTORICALLY UNDERUTILIZED BUSINESSES

GOVERNMENT CODE

CHAPTER 2161. HISTORICALLY UNDERUTILIZED BUSINESSES

SUBCHAPTER A. GENERAL PROVISIONS


	§ 2161.001. DEFINITIONS.  In this chapter:                                  
		(1)  "Goods" means supplies, materials, or equipment.                         
		(2)  "Historically underutilized business" means an 
entity with its principal place of business in this state that is:
			(A)  a corporation formed for the purpose of 
making a profit in which 51 percent or more of all classes of the 
shares of stock or other equitable securities are owned by one or 
more economically disadvantaged persons who have a proportionate 
interest and actively participate in the corporation's control, 
operation, and management;
			(B)  a sole proprietorship created for the purpose 
of making a profit that is completely owned, operated, and 
controlled by an economically disadvantaged person;
			(C)  a partnership formed for the purpose of 
making a profit in which 51 percent or more of the assets and 
interest in the partnership are owned by one or more economically 
disadvantaged persons who have a proportionate interest and 
actively participate in the partnership's control, operation, and 
management;
			(D)  a joint venture in which each entity in the 
venture is a historically underutilized business, as determined 
under another paragraph of this subdivision;  or
			(E)  a supplier contract between a historically 
underutilized business as determined under another paragraph of 
this subdivision and a prime contractor under which the 
historically underutilized business is directly involved in the 
manufacture or distribution of the goods or otherwise warehouses 
and ships the goods.
		(3)  "Economically disadvantaged person" means a 
person who is economically disadvantaged because of the person's 
identification as a member of a certain group, including Black 
Americans, Hispanic Americans, women, Asian Pacific Americans, and 
Native Americans, and who has suffered the effects of 
discriminatory practices or other similar insidious circumstances 
over which the person has no control.
		(4)  "Contract" includes an arrangement under which a 
state agency receives professional or investment brokerage 
services.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 1.21, eff. Sept. 1, 
1999;  Acts 2003, 78th Leg., ch. 1261, § 1, eff. Sept. 1, 2003.


	§ 2161.0015. DETERMINING SIZE STANDARDS FOR HISTORICALLY 
UNDERUTILIZED BUSINESSES.  The commission may establish size 
standards that a business may not exceed if it is to be considered a 
historically underutilized business under this chapter.  In 
determining the size standards, the commission shall determine the 
size at which a business should be considered sufficiently large 
that the business probably does not significantly suffer from the 
effects of past discriminatory practices.

Added by Acts 1999, 76th Leg., ch. 1499, § 2.02, eff. Sept. 1, 
1999.     


	§ 2161.002. COMMISSION ADMINISTRATION;  COMPTROLLER 
ASSISTANCE.  (a) To administer Subchapters B and C, the commission 
may:
		(1)  require information from a state agency;  and                            
		(2)  adopt rules.                                                             
	(b)  The comptroller shall provide information to the 
commission that will assist the commission in performing its duties 
under Subchapters B and C.
	(c)  In adopting rules to administer this chapter, the 
commission shall adopt rules that are based on the results of the 
"State of Texas Disparity Study, A Report to the Texas Legislature 
as Mandated by H.B. 2626, 73rd Legislature, December 1994" 
(prepared by National Economic Research Associates, Inc.).  The 
commission shall revise the rules in response to the findings of any 
updates of the study that are prepared on behalf of the state.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 1.22, eff. Sept. 1, 
1999.


	§ 2161.003. AGENCY RULES.  A state agency, including an 
institution of higher education, shall adopt the commission's rules 
under Section 2161.002 as the agency's or institution's own rules.  
Those rules apply to the agency's construction projects and 
purchases of goods and services paid for with appropriated money 
without regard to whether a project or purchase is otherwise 
subject to this subtitle.

Added by Acts 1999, 76th Leg., ch. 1499, § 1.23, eff. Sept. 1, 
1999.     


	§ 2161.004. APPLICABILITY;  INTENT.  (a) This chapter and 
rules adopted by the commission under this chapter apply to state 
agency construction projects and purchases of goods and services 
that are paid for with appropriated money and made under the 
authority of this subtitle or other law.
	(b)  The legislature intends that all qualified businesses 
have access to compete for business from the state.
	(c)  Section 2161.003 and Subsections (a) and (b) of this 
section do not apply to a project or contract subject to Section 
201.702, Transportation Code.

Added by Acts 1999, 76th Leg., ch. 1499, § 1.23, eff. Sept. 1, 
1999.     


	§ 2161.005. TRANSFER OF FUNDS FOR PURCHASING.  If the 
state auditor reports to the commission under Section 2161.123(d) 
that a state agency is not complying with Section 2161.123, the 
commission shall report that fact to the Legislative Budget Board.  
If the Legislative Budget Board determines that, one year after the 
date of the state auditor's report to the commission, the agency is 
still not complying with Section 2161.123, the budget board may, 
under Section 69, Article XVI, Texas Constitution, direct the 
emergency transfer of the agency's appropriated funds for making 
purchases under purchasing authority delegated under Section 
2155.131 or 2155.133 to the appropriate state agency.  The amount 
transferred from the agency's funds to the appropriate agency shall 
be an amount determined by the Legislative Budget Board.

Added by Acts 1999, 76th Leg., ch. 1499, § 1.23, eff. Sept. 1, 
1999.     

SUBCHAPTER B. GENERAL POWERS AND DUTIES OF COMMISSION


	§ 2161.061. COMMISSION CERTIFICATION OF HISTORICALLY 
UNDERUTILIZED BUSINESSES.  (a) The commission shall certify 
historically underutilized businesses.
	(b)  As one of its certification procedures, the commission 
may:             
		(1)  approve the certification program of one or more 
local governments or nonprofit organizations in this state that 
certify historically underutilized businesses, minority business 
enterprises, women's business enterprises, or disadvantaged 
business enterprises under substantially the same definition, to 
the extent applicable, used by Section 2161.001, if the local 
government or nonprofit organization meets or exceeds the standards 
established by the commission;  and
		(2)  certify a business that is certified by a local 
government or by a nonprofit organization as a historically 
underutilized business under this chapter.
	(c)  To maximize the number of certified historically 
underutilized businesses, the commission shall enter into 
agreements with local governments in this state that conduct 
certification programs described by Subsection (b) and with 
nonprofit organizations.  The commission may terminate an agreement 
if a local government or nonprofit organization fails to meet the 
standards established by the commission for certifying 
historically underutilized businesses.  The agreements must take 
effect immediately and:
		(1)  allow for automatic certification of businesses 
certified by the local government or nonprofit organization;
		(2)  provide for the efficient updating of the 
commission database containing information about historically 
underutilized businesses and potential historically underutilized 
businesses;  and
		(3)  provide for a method by which the commission may 
efficiently communicate with businesses certified by the local 
government or nonprofit organization and provide those businesses 
with information about the state historically underutilized 
business program.
	(d)  A local government or a nonprofit organization that 
certifies historically underutilized businesses, minority business 
enterprises, women's business enterprises, or disadvantaged 
business enterprises as described in Subsections (b) and (c) shall 
complete the certification of an applicant or provide an applicant 
with written justification of its certification denial within the 
period established by the commission in its rules for certification 
activities.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1997, 75th Leg., ch. 165, § 17.03(a), eff. Sept. 
1, 1997;  Acts 1999, 76th Leg., ch. 1499, § 2.03, eff. Sept. 1, 
1999;  Acts 2001, 77th Leg., ch. 1422, § 13.01, eff. Sept. 1, 
2001.


	§ 2161.062. ASSISTANCE TO HISTORICALLY UNDERUTILIZED 
BUSINESSES.  (a) The commission shall seek the advice of the 
governor, legislature, and state agencies in identifying and 
developing opportunities for historically underutilized 
businesses.
	(b)  The commission shall offer historically underutilized 
businesses assistance and training regarding state procurement 
procedures.
	(c)  The commission shall advise historically underutilized 
businesses of available state contracts and shall advise 
historically underutilized businesses to apply for registration on 
the commission's master bidders list.
	(d)  The commission shall send historically underutilized 
businesses an orientation package on certification or 
recertification.  The package shall include:
		(1)  a certificate issued in the historically 
underutilized business's name;
		(2)  a description of the significance and value of 
certification;          
		(3)  a list of state purchasing personnel;                                    
		(4)  information regarding electronic commerce 
opportunities;               
		(5)  information regarding the Texas Marketplace 
website;  and              
		(6)  additional information about the state 
procurement process.            
	(e)  A state agency with a biennial budget that exceeds $10 
million shall designate a staff member to serve as the historically 
underutilized businesses coordinator for the agency during the 
fiscal year.  The procurement director may serve as the 
coordinator.  In agencies that employ a historically underutilized 
businesses coordinator, the position of coordinator, within the 
agency's structure, must be at least equal to the position of 
procurement director.  In addition to any other responsibilities, 
the coordinator shall:
		(1)  coordinate training programs for the recruitment 
and retention of historically underutilized businesses;
		(2)  report required information to the commission;  
and                    
		(3)  match historically underutilized businesses with 
key staff within the agency.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 2.04, eff. Sept. 1, 
1999.


	§ 2161.063. ASSISTING STATE AGENCIES.  (a) The commission 
shall encourage state agencies to use historically underutilized 
businesses by:
		(1)  working with state agencies to establish a 
statewide policy for increasing the use of historically 
underutilized businesses;
		(2)  assisting state agencies in seeking historically 
underutilized businesses capable of supplying required goods or 
services;
		(3)  assisting state agencies in identifying and 
advising historically underutilized businesses on the types of 
goods and services the agencies need;  and
		(4)  assisting state agencies in increasing the amount 
of business placed with historically underutilized businesses.
	(b)  The commission shall assist the Texas Department of 
Economic Development in performing the department's duties under 
Section 481.0068.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 2.05, eff. Sept. 1, 
1999.


	§ 2161.064. DIRECTORY.  (a) The commission shall compile, 
in the most cost-efficient form, a directory of businesses 
certified as historically underutilized businesses under Section 
2161.061.
	(b)  The commission at least semiannually shall update the 
directory and provide access to the directory electronically or in 
another form to each state agency.
	(c)  Depending on the needs of a state agency, the commission 
shall provide access to the directory electronically or in another 
form.
	(d)  The commission shall provide a copy of the directory to 
every municipality in January and July of each year.  On request, 
the commission shall make the directory available to other local 
governments and the public.
	(e)  A state agency, including the commission, shall use the 
directory in determining awards of state purchasing and public 
works contracts.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 2.06, eff. Sept. 1, 
1999.


	§ 2161.065. MENTOR-PROTEGE PROGRAM.  (a) The commission 
shall design a mentor-protege program to foster long-term 
relationships between prime contractors and historically 
underutilized businesses and to increase the ability of 
historically underutilized businesses to contract with the state or 
to receive subcontracts under a state contract.  Each state agency 
with a biennial appropriation that exceeds $10 million shall 
implement the program designed by the commission.
	(b)  Participation in the program must be voluntary for both 
the contractor and the historically underutilized business 
subcontractor.

Added by Acts 1999, 76th Leg., ch. 1499, § 2.08, eff. Sept. 1, 
1999.     


	§ 2161.066. HISTORICALLY UNDERUTILIZED BUSINESS 
FORUMS.  (a) The commission shall design a program of forums in 
which historically underutilized businesses are invited by state 
agencies to deliver technical and business presentations that 
demonstrate their capability to do business with the agency:
		(1)  to senior managers and procurement personnel at 
state agencies that acquire goods and services of a type supplied by 
the historically underutilized businesses;  and
		(2)  to contractors with the state who may be 
subcontracting for goods and services of a type supplied by the 
historically underutilized businesses.
	(b)  The forums shall be held at state agency offices.                         
	(c)  Each state agency with a biennial appropriation that 
exceeds $10 million shall participate in the program by sending 
senior managers and procurement personnel to attend relevant 
presentations and by informing the agency's contractors about 
presentations that may be relevant to anticipated subcontracting 
opportunities.
	(d)  Each state agency that has a historically underutilized 
businesses coordinator shall:
		(1)  design its own program and model the program to the 
extent appropriate on the program developed by the commission under 
this section;  and
		(2)  sponsor presentations by historically 
underutilized businesses at the agency.
	(e)  The commission and each state agency that has a 
historically underutilized businesses coordinator shall 
aggressively identify and notify individual historically 
underutilized businesses regarding opportunities to make a 
presentation regarding the types of goods and services supplied by 
the historically underutilized business and shall advertise in 
appropriate trade publications that target historically 
underutilized businesses regarding opportunities to make a 
presentation.

Added by Acts 1999, 76th Leg., ch. 1499, § 2.08, eff. Sept. 1, 
1999.     

SUBCHAPTER C. PLANNING AND REPORTING REQUIREMENTS


	§ 2161.121. COMMISSION REPORT OF CONTRACTS AWARDED TO 
HISTORICALLY UNDERUTILIZED BUSINESSES.  (a) The commission shall 
prepare a consolidated report that:
		(1)  includes the number and dollar amount of contracts 
awarded and paid to historically underutilized businesses 
certified by the commission;
		(2)  analyzes the relative level of opportunity for 
historically underutilized businesses for various categories of 
acquired goods and services;  and
		(3)  tracks, by vendor identification number and, to 
the extent allowed by federal law, by social security number, the 
graduation rates for historically underutilized businesses that 
grew to exceed the size standards determined by the commission.
	(b)  Each state agency shall send to the commission 
information required by Section 2161.122 and the commission for the 
preparation of the commission's report not later than March 15 and 
September 15 of each year.
	(c)  The commission shall base its report on the compilation 
and analysis of reports received under Subsection (b) and 
information received from the comptroller.
	(d)  The commission shall send on April 15 of each year a 
report on the previous six-month period to the joint committee 
charged with monitoring the implementation of the historically 
underutilized business goals.
	(e)  The commission shall send on October 15 of each year a 
report on the preceding fiscal year to the presiding officer of each 
house of the legislature and the joint committee.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 2.07, eff. Sept. 1, 
1999.


	§ 2161.122. INFORMATION GATHERING BY STATE AGENCY.  (a) 
To ensure accuracy in reporting, a state agency shall maintain and 
compile monthly information relating to the use by the agency and 
each of its operating divisions of historically underutilized 
businesses, including information regarding subcontractors and 
suppliers required by Subsection (b).
	(b)  A contractor or supplier awarded a contract by a state 
agency shall report to the agency the identity of each historically 
underutilized business to whom the contractor or supplier awarded a 
subcontract for the purchase of goods or services.
	(c)  Each state agency shall report to the commission in 
accordance with Section 2161.125 the following information with 
regard to the expenditure of both treasury and nontreasury funds:
		(1)  the total dollar amount of purchases and payments 
made under contracts awarded to historically underutilized 
businesses;
		(2)  the number of businesses participating in any 
issuance of state bonds by the agency;
		(3)  the number of contracts awarded to businesses with 
regard to the agency's acquisition, construction, or equipping of a 
facility or implementation of a program;  and
		(4)  the number of bids, proposals, or other applicable 
expressions of interest made by historically underutilized 
businesses with regard to the agency's acquisition, construction, 
or equipping of a facility or implementation of a program.
	(d)  A state agency participating in a group purchasing 
program shall send to the commission in the agency's report under 
Section 2161.121 a separate list of purchases from historically 
underutilized businesses that are made through the group purchasing 
program, including the dollar amount of each purchase allocated to 
the reporting agency.
	(e)  A state agency's report is a record of the agency's 
purchases for which the agency selected the vendor.  If the vendor 
was selected by the commission as part of its state contract 
program, the commission shall include the purchase in the 
commission's report of its own purchases unless the commission made 
a sole source purchase for the agency under Section 2155.067.  The 
state agency for which the purchase was made shall report the 
selection of the vendor on its report as if the agency selected the 
vendor when the agency drew specifications for goods or services 
that are proprietary to one vendor.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 1.24, eff. Sept. 1, 
1999.


	§ 2161.123. STRATEGIC PLANNING.  (a) Each state agency, 
including the commission, that is required to have a strategic plan 
under Chapter 2056 shall include in its strategic plan a written 
plan for increasing the agency's use of historically underutilized 
businesses in purchasing and public works contracting.  The 
governing board of each university system or institution of higher 
education not included in a university system, other than a public 
junior college, shall prepare a written plan for increasing the use 
of historically underutilized businesses in purchasing and public 
works contracting by the system or institution.
	(b)  The plan must include:                                                    
		(1)  a policy or mission statement relating to 
increasing the use of historically underutilized businesses by the 
state agency;
		(2)  goals to be met by the agency in carrying out the 
policy or mission;  and
		(3)  specific programs to be conducted by the agency to 
meet the goals stated in the plan, including a specific program to 
encourage contractors to use historically underutilized businesses 
as partners and subcontractors.
	(c)  On request, the commission shall provide technical 
assistance to a state agency that is preparing its plan.
	(d)  The commission and the state auditor shall cooperate to 
develop procedures providing for random periodic monitoring of 
state agency compliance with this section.  The state auditor shall 
report to the commission a state agency that is not complying with 
this section.  In determining whether a state agency is making a 
good faith effort to comply, the state auditor shall consider 
whether the agency:
		(1)  has adopted rules under Section 2161.003;                                
		(2)  has used the commission's directory under Section 
2161.064 and other resources to identify historically 
underutilized businesses that are able and available to contract 
with the agency;
		(3)  made good faith, timely efforts to contact 
identified historically underutilized businesses regarding 
contracting opportunities;  and
		(4)  conducted its procurement program in accordance 
with the good faith effort methodology set out in commission rules.
	(e)  In conducting an audit of an agency's compliance with 
this section or an agency's making of a good faith effort to 
implement the plan adopted under this section, the state auditor 
shall not consider the success or failure of the agency to contract 
with historically underutilized businesses in any specific 
quantity.  The state auditor's review shall be restricted to the 
agency's procedural compliance with Subsection (d).
	(f)  If the state auditor reports to the commission that a 
state agency is not complying with this section, the commission 
shall assist the agency in complying.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 1.25, eff. Sept. 1, 
1999;  Acts 2003, 78th Leg., ch. 785, § 36, eff. Sept. 1, 2003;  
Acts 2003, 78th Leg., ch. 1266, § 4.08, eff. June 20, 2003.


	§ 2161.124. STATE AGENCY PROGRESS REPORTS.  (a) Each 
state agency, including the commission, shall prepare a report for 
each fiscal year documenting progress under its plan for increasing 
use of historically underutilized businesses.
	(b)  The commission shall develop a standard form for the 
report.            
	(c)  The state agency shall file the report with the 
governor, lieutenant governor, and the speaker of the house of 
representatives not later than December 31 of each year.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 2003, 78th Leg., ch. 785, § 37, eff. Sept. 1, 
2003.


	§ 2161.125. CATEGORIZATION BY SEX, RACE, AND 
ETHNICITY.  The commission, in cooperation with the comptroller 
and each state agency reporting under this subchapter, shall 
categorize each historically underutilized business included in a 
report under this subchapter by sex, race, and ethnicity.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.            


	§ 2161.126. EDUCATION AND OUTREACH BY COMMISSION.  Before 
September 1 of each year, the commission shall report to the 
governor, the lieutenant governor, and the speaker of the house of 
representatives on the education and training efforts that the 
commission has made toward historically underutilized businesses.  
The report must include the following as related to historically 
underutilized businesses:
		(1)  the commission's vision, mission, and philosophy;                        
		(2)  marketing materials and other educational 
materials distributed by the commission;
		(3)  the commission's policy regarding education, 
outreach, and dissemination of information;
		(4)  goals that the commission has attained during the 
fiscal year;         
		(5)  the commission's goals, objectives, and expected 
outcome measures for each outreach and education event;  and
		(6)  the commission's planned future initiatives on 
education and outreach. 

Added by Acts 1999, 76th Leg., ch. 1499, § 2.09, eff. Sept. 1, 
1999.     


	§ 2161.127. LEGISLATIVE APPROPRIATIONS REQUESTS.  Each 
state agency must include as part of its legislative appropriations 
request a detailed report for consideration by the budget 
committees of the legislature that shows the extent to which the 
agency complied with this chapter and rules of the commission 
adopted under this chapter during the two calendar years preceding 
the calendar year in which the request is submitted.  To the extent 
the state agency did not comply, the report must demonstrate the 
reasons for that fact.  The extent to which a state agency complies 
with this chapter and rules of the commission adopted under this 
chapter is considered a performance measure for purposes of the 
appropriations process.

Added by Acts 1999, 76th Leg., ch. 1499, § 2.09, eff. Sept. 1, 
1999.     

SUBCHAPTER D. PURCHASING GOALS


	§ 2161.181. GOALS FOR PURCHASES OF GOODS AND SERVICES.  A 
state agency, including the commission, shall make a good faith 
effort to increase the contract awards for the purchase of goods or 
services that the agency expects to make during a fiscal year to 
historically underutilized businesses based on rules adopted by the 
commission to implement the disparity study described by Section 
2161.002(c).

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 1.26, eff. Sept. 1, 
1999.


	§ 2161.182. GOALS FOR CONSTRUCTION CONTRACTS.  (a) A 
state agency that contracts for a construction project, including a 
project under Section 2166.003, shall make a good faith effort to 
increase the construction contract awards that the agency expects 
to make during a fiscal year to historically underutilized 
businesses based on rules adopted by the commission to implement 
the disparity study described by Section 2161.002(c).
	(b)  In this section, "project" has the meaning assigned by 
Section 2166.001.

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 1.27, eff. Sept. 1, 
1999.


	§ 2161.183. ESTIMATE OF EXPECTED CONTRACT AWARDS.  (a) 
Not later than the 60th day of its fiscal year, a state agency, 
including the commission:
		(1)  shall estimate the total value of contract awards 
the agency expects to make for that fiscal year that are subject to 
Section 2161.181;  and
		(2)  shall estimate the total value of contract awards 
the agency expects to make for that fiscal year under Chapter 2166.
	(b)  The state agency may revise an estimate as new 
information requires.    

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.            

SUBCHAPTER E. PENALTY


	§ 2161.231. PENALTY.  (a) A person commits an offense if 
the person:      
		(1)  intentionally applies as a historically 
underutilized business for an award of a purchasing contract or 
public works contract under this subtitle;  and
		(2)  knows the person is not a historically 
underutilized business.         
	(b)  An offense under this section is a third degree felony.                   

Added by Acts 1995, 74th Leg., ch. 41, § 1, eff. Sept. 1, 1995.            

SUBCHAPTER F. SUBCONTRACTING


	§ 2161.251. APPLICABILITY.  (a) This subchapter applies 
to all contracts entered into by a state agency with an expected 
value of $100,000 or more, including:
		(1)  contracts for the acquisition of a good or 
service;  and               
		(2)  contracts for or related to the construction of a 
public building, road, or other public work.
	(b)  This subchapter applies to the contract without regard 
to:              
		(1)  whether the contract is otherwise subject to this 
subtitle;  or        
		(2)  the source of funds for the contract, except that 
to the extent federal funds are used to pay for the contract, this 
subchapter does not apply if federal law prohibits the application 
of this subchapter in relation to the expenditure of federal funds.

Added by Acts 1999, 76th Leg., ch. 1499, § 2.10, eff. Sept. 1, 
1999.     


	§ 2161.252. AGENCY DETERMINATION REGARDING 
SUBCONTRACTING OPPORTUNITIES;  BUSINESS SUBCONTRACTING PLAN.  (a) 
Each state agency that considers entering into a contract with an 
expected value of $100,000 or more shall, before the agency 
solicits bids, proposals, offers, or other applicable expressions 
of interest for the contract, determine whether there will be 
subcontracting opportunities under the contract.  If the state 
agency determines that there is that probability, the agency shall 
require that each bid, proposal, offer, or other applicable 
expression of interest for the contract include a historically 
underutilized business subcontracting plan.
	(b)  When a state agency requires a historically 
underutilized business subcontracting plan under Subsection (a), a 
bid, proposal, offer, or other applicable expression of interest 
for the contract must contain a plan to be considered responsive.

Added by Acts 1999, 76th Leg., ch. 1499, § 2.10, eff. Sept. 1, 
1999.     


	§ 2161.253. GOOD FAITH COMPLIANCE WITH BUSINESS 
SUBCONTRACTING PLAN.  (a) When a state agency requires a 
historically underutilized business subcontracting plan under 
Section 2161.252, the awarded contract shall contain, as a 
provision of the contract that must be fulfilled, the plan that the 
contractor submitted in its bid, proposal, offer, or other 
applicable expression of interest for the contract.  The contractor 
shall make good faith efforts to implement the plan.  A contractor's 
participation in a mentor-protege program under Section 2161.065 
and submission of a protege as a subcontractor in the contractor's 
historically underutilized business subcontracting plan 
constitutes a good faith effort under this section for the 
particular area of the subcontracting plan involving the protege.
	(b)  To the extent that subcontracts are not contracted for 
as originally submitted in the historically underutilized business 
subcontracting plan, the contractor shall report to the state 
agency all the circumstances that explain that fact and describe 
the good faith efforts made to find and subcontract with another 
historically underutilized business.
	(c)  The state agency shall audit the contractor's 
compliance with the historically underutilized business 
subcontracting plan.  In determining whether the contractor made 
the required good faith effort, the agency may not consider the 
success or failure of the contractor to subcontract with 
historically underutilized businesses in any specific quantity.  
The agency's determination is restricted to considering factors 
indicating good faith.
	(d)  If a determination is made that the contractor failed to 
implement the plan in good faith, the agency, in addition to any 
other remedies, may bar the contractor from further contracting 
opportunities with the agency.
	(e)  The commission shall adopt rules to administer this 
subchapter.         

Added by Acts 1999, 76th Leg., ch. 1499, § 2.10, eff. Sept. 1, 
1999.  Amended by Acts 2001, 77th Leg., ch. 1422, § 13.02, eff. 
Sept. 1, 2001.