88R3294 SCP/KBB-D     By: Cain H.B. No. 5140       A BILL TO BE ENTITLED   AN ACT   relating to a prohibition against the consideration of race or   ethnicity as a factor in governmental employment or contracting, in   other governmental functions, and in higher education admissions.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:   ARTICLE 1. PROHIBITIONS AGAINST CONSIDERING RACE OR ETHNICITY AS A   FACTOR IN GOVERNMENTAL EMPLOYMENT OR CONTRACTING, IN OTHER   GOVERNMENTAL FUNCTIONS, AND IN HIGHER EDUCATION ADMISSIONS          SECTION 1.01.  Section 51.805, Education Code, is amended by   adding Subsection (b-1) to read as follows:          (b-1)  A general academic teaching institution may not   consider an applicant's race or ethnicity as a factor in making   admissions decisions.          SECTION 1.02.  Section 51.808, Education Code, is amended by   adding Subsection (b-1) to read as follows:          (b-1)  A general academic teaching institution or medical   and dental unit may not adopt a policy under this section under   which the institution may consider an applicant's race or ethnicity   as a factor in making admissions decisions.          SECTION 1.03.  Chapter 1, Government Code, is amended by   adding Section 1.004 to read as follows:          Sec. 1.004.  PROHIBITION AGAINST CONSIDERATION OF RACE OR   ETHNICITY IN CERTAIN GOVERNMENTAL FUNCTIONS. (a) In this section,   "state agency" means a board, commission, council, committee,   department, office, agency, or other governmental entity in the   executive, legislative, or judicial branch of state government.   The term includes an institution of higher education as defined by   Section 61.003, Education Code.          (b)  Notwithstanding any other law, a state agency, state   officer, or political subdivision may not consider the race or   ethnicity of:                (1)  an applicant for employment as a factor in making   hiring decisions;                (2)  a contractor or vendor responding to a contract   solicitation as a factor in awarding the contract; and                (3)  any other person with regard to whom the state   agency, state officer, or political subdivision makes a decision   that affects the person as a factor in making that decision.   ARTICLE 2. CONFORMING AMENDMENTS          SECTION 2.01.  Section 12.029, Agriculture Code, is amended   to read as follows:          Sec. 12.029.  [MINORITY AND] FEMALE-OWNED BUSINESS   CONTRACTS. (a) The department shall establish by rule policies to   encourage [minority and] female-owned small businesses to bid for   contract and open market purchases of the department and to assist   those businesses in that bidding.  The department shall review the   policies periodically to correct any deficiencies in the policies.          (b)  The department annually shall determine the number,   types, and value of contracts awarded to [minority and]   female-owned small businesses in the year preceding the   determination and the ratio of the number and the value of those   contracts to the number and the value of all contracts awarded by   the department in that year.          (d)  In this section, "[minority and] female-owned small   business" means a business enterprise:                (1)  that is independently owned and operated, that was   formed for the purpose of making a profit, and that has fewer than   100 employees and less than $1 million in annual gross receipts; and                (2)  that is controlled by one or more socially and   economically disadvantaged persons who own at least 51 percent of   the business enterprise and are socially disadvantaged because they   are [of their identification as members of certain groups,   including] women[, black Americans, Mexican Americans and other   Americans of Hispanic origin, Asian Americans, and American   Indians].          SECTION 2.02.  Section 5.102, Alcoholic Beverage Code, is   amended to read as follows:          Sec. 5.102.  RECRUITMENT. For the purpose of providing   adequate personnel for all job positions in the commission, the   commission shall:                (1)  develop a recruiting program that identifies   underrepresentation with the commission and focuses on recruiting   women [different ethnic, racial, or gender groups] for job   categories in which underrepresentation occurs; and                (2)  require that all applicants be reviewed by the   human resources division to ensure consideration of women   [underrepresented ethnic, racial, or gender groups].          SECTION 2.03.  Sections 54.0515(d) and (e), Education Code,   are amended to read as follows:          (d)  An appointed member of the committee serves at the   pleasure of the appointing official. In making appointments to the   committee, the appointing officials shall attempt to appoint   persons who represent the gender composition[, minority   populations,] and geographic regions of the state.          (e)  It is the legislature's intent that each institution of   higher education, as a condition to tuition deregulation under   Section 54.0513, reasonably implement the following:                (1)  each institution shall make satisfactory progress   towards the goals provided in its master plan for higher education   and in "Closing the Gaps," the state's master plan for higher   education; and                (2)  each institution shall meet acceptable   performance criteria, including measures such as graduation rates,   retention rates, enrollment growth, educational quality, [efforts   to enhance minority participation,] opportunities for financial   aid, and affordability.          SECTION 2.04.  Section 55.03, Education Code, is amended to   read as follows:          Sec. 55.03.  [MINORITY-OWNED AND] WOMEN-OWNED BUSINESSES.     (a)  The board of regents of each institution of higher education   shall make a good-faith effort to award to [minority-owned and]   women-owned businesses:                (1)  contracts relating to the issuance of bonds by the   board under this chapter in the amount of at least 25 percent of the   total costs of issuing those bonds; and                (2)  contracts for the items to be financed by bonds   issued by the board in the amount of at least 25 percent of the   proceeds of those bonds.          (b)  Not later than October 31 of each academic year, the   board of regents shall file with the governor and each house of the   legislature a written report containing the following information   for the previous academic year for all businesses[, minority-owned   businesses] and women-owned businesses, classified by gender [and   minority group status]:                (1)  the total number of contracts relating to the   issuance of bonds by the board under this chapter and to the items   to be financed by those bonds;                (2)  the total dollar amount the board of regents must   pay under each contract described by Subdivision (1) of this   subsection; and                (3)  the total number of businesses submitting bids or   proposals relating to the issuance of bonds by the board under this   chapter and to the items to be financed by those bonds.          (c)  In this section, "women-owned [:                [(1)  "Minority-owned business" means a business   entity at least 51 percent of which is owned by members of a   minority group or, in the case of a corporation, at least 51 percent   of the shares of which are owned by members of a minority group, and   that is managed and controlled by members of a minority group in its   daily operations.                [(2)  "Minority group" includes:                      [(A)  African Americans;                      [(B)  American Indians;                      [(C)  Asian Americans; and                      [(D)  Mexican Americans and other Americans of   Hispanic origin.                [(3)  "Women-owned] business" means a business entity   at least 51 percent of which is owned by women or, in the case of a   corporation, at least 51 percent of the shares of which are owned by   women, and that is managed and controlled by women in its daily   operations.          SECTION 2.05.  Section 72.041, Government Code, is amended   to read as follows:          Sec. 72.041.  RECRUITMENT [DIVERSITY]. The judges of the   supreme court, court of criminal appeals, and courts of appeals   shall encourage the recruitment of women as judicial law clerks and   staff attorneys [that reflect the gender, racial, and ethnic   diversity of this state].          SECTION 2.06.  Section 651.009(a), Government Code, is   amended to read as follows:          (a)  In each case in which the governing body of a state   board, commission, or other state agency that has statewide   jurisdiction is appointed by the governor or another appointing   authority, the governor or appointing authority shall ensure that,   to the extent possible, the membership of the governing body   reflects the [racial, ethnic, and] geographic diversity of this   state.          SECTION 2.07.  Section 2161.001(3), Government Code, is   amended to read as follows:                (3)  "Economically disadvantaged person" means a   person who:                      (A)  is economically disadvantaged because of the   person's identification as a member of one or more of the following   groups [a certain group, including]:                            (i)  [Black Americans;                            [(ii) Hispanic Americans;                            [(iii)] women; or                            [(iv) Asian Pacific Americans;                            [(v)  Native Americans; and]                            (ii) [(vi)]  veterans as defined by 38   U.S.C. Section 101(2) who have suffered at least a 20 percent   service-connected disability as defined by 38 U.S.C. Section   101(16); and                      (B)  has suffered the effects of discriminatory   practices or other similar insidious circumstances over which the   person has no control.          SECTION 2.08.  Sections 2161.061(b), (d), and (e),   Government Code, are amended to read as follows:          (b)  As one of its certification procedures, the comptroller   may:                (1)  approve the certification program of one or more   local governments or nonprofit organizations in this state that   certify historically underutilized businesses or [, 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 comptroller; 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.          (d)  A local government or a nonprofit organization that   certifies historically underutilized businesses or [, 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   comptroller in its rules for certification activities.          (e)  A local government or a nonprofit organization that   certifies historically underutilized businesses under Subsection   (c) or that conducts a certification program described by and   approved under Subsection (b) shall make available to the public an   online searchable database containing information about   historically underutilized businesses and [, minority business   enterprises,] women's business enterprises[, and disadvantaged   business enterprises] certified by the local government or   nonprofit organization, including:                (1)  the name of the business;                (2)  the contact person or owner of the business;                (3)  the address and telephone number of the business;                (4)  the type or category of business, including   relevant capabilities of the business and the North American   Industry Classification System codes for the business; and                (5)  the expiration date of the business's   certification.          SECTION 2.09.  Section 2161.125, Government Code, is amended   to read as follows:          Sec. 2161.125.  CATEGORIZATION OF HISTORICALLY   UNDERUTILIZED BUSINESSES. The comptroller, in cooperation with   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] and by whether the   business qualifies as a historically underutilized business   because it is owned or owned, operated, and controlled, as   applicable, wholly or partly by one or more veterans as defined by   38 U.S.C. Section 101(2) who have suffered at least a 20 percent   service-connected disability as defined by 38 U.S.C. Section   101(16).          SECTION 2.10.  Section 93.002(b), Health and Safety Code, is   amended to read as follows:          (b)  In appointing public members under Subsection (a)(1),   the governor shall attempt to appoint female members [and members   of different minority groups, including African Americans,   Hispanic Americans, Native Americans, and Asian Americans].          SECTION 2.11.  Section 318.003(a), Local Government Code, is   amended to read as follows:          (a)  The commission must be composed of at least seven   residents of the county. Members of the commission must be   individuals who broadly reflect the age[, ethnic,] and geographic   diversity of the county.          SECTION 2.12.  Section 351.1035(a), Local Government Code,   is amended to read as follows:          (a)  In this section, "disadvantaged 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 are owned by one or more persons   who are socially disadvantaged because they are [of their   identification as members of certain groups, including black   Americans, Hispanic Americans,] women and [, Asian Pacific   Americans, and American Indians, who] have suffered the effects of   discriminatory practices or similar insidious circumstances over   which they have no control;                (2)  a sole proprietorship for the purpose of making a   profit that is 100 percent owned, operated, and controlled by a   person described by Subdivision (1) of this subsection;                (3)  a partnership for the purpose of making a profit in   which 51 percent of the assets and interest in the partnership is   owned by one or more persons described by Subdivision (1) of this   subsection who[. Those persons must] have a proportionate interest   in the control, operation, and management of the partnership's   affairs;                (4)  a joint venture in which each entity in the joint   venture is a disadvantaged business under this subsection; or                (5)  a supplier contract between a disadvantaged   business under this subsection and a prime contractor under which   the disadvantaged business is directly involved in the manufacture   or distribution of the supplies or materials or otherwise   warehouses and ships the supplies.          SECTION 2.13.  Section 375.003(4), Local Government Code, is   amended to read as follows:                (4)  "Disadvantaged business" means:                      (A)  a corporation formed for the purpose of   making a profit and at least 51 percent of all classes of the shares   of stock or other equitable securities of which are owned by one or   more persons who are socially disadvantaged because they are women   and [of their identification as members of certain groups that]   have suffered the effects of discriminatory practices or similar   insidious circumstances over which they have no control[, including   black Americans, Hispanic Americans, women, Asian Pacific   Americans, and American Indians];                      (B)  a sole proprietorship formed for the purpose   of making a profit that is owned, operated, and controlled   exclusively by one or more persons described by Paragraph (A);                      (C)  a partnership that is formed for the purpose   of making a profit, in which 51 percent of the assets and interest   in the partnership is owned by one or more persons described by   Paragraph (A), and in which [minority or] women partners have a   proportionate interest in the control, operation, and management of   the partnership affairs;                      (D)  a joint venture [between minority and women's   group members] formed by women for the purpose of making a profit   [and the minority participation in which is based on the sharing of   real economic interest, including equally proportionate control   over management, interest in capital, and interest earnings, other   than a joint venture in which majority group members own or control   debt securities, leasehold interest, management contracts, or   other interests];                      (E)  a supplier contract between persons   described in Paragraph (A) and a prime contractor in which the   disadvantaged business is directly involved for the manufacture or   distribution of the supplies or materials or otherwise for   warehousing and shipping the supplies; or                      (F)  a person certified as a disadvantaged   business by:                            (i)  this state;                            (ii)  a political subdivision of this state;   or                            (iii)  a regional planning commission,   council of governments, or similar regional planning agency created   under Chapter 391.          SECTION 2.14.  Sections 381.004(b) and (d), Local Government   Code, are amended to read as follows:          (b)  To stimulate business and commercial activity in a   county, the commissioners court of the county may develop and   administer a program:                (1)  for state or local economic development;                (2)  for small [or disadvantaged] business   development;                (3)  to stimulate, encourage, and develop business   location and commercial activity in the county;                (4)  to promote or advertise the county and its   vicinity or conduct a solicitation program to attract conventions,   visitors, and businesses;                (5)  to improve the extent to which women-owned [women   and minority] businesses are awarded county contracts;                (6)  to support comprehensive literacy programs for the   benefit of county residents; or                (7)  for the encouragement, promotion, improvement,   and application of the arts.          (d)  A program established under this section may be designed   to reasonably increase participation by [minority and] women-owned   businesses in public contract awards by the county by establishing   a contract percentage goal for those businesses.          SECTION 2.15.  Section 901.659, Occupations Code, is amended   to read as follows:          Sec. 901.659.  [MINORITY AND] DISADVANTAGED STUDENT   INTERNSHIPS. (a)  The board shall adopt rules to encourage   internships for [minority and] disadvantaged students and   certified public accountant examination candidates who notify the   board not later than 90 days after the date of being accepted into   an accounting internship program.          (b)  The rules adopted by the board shall include standards   for appropriate recognition of an accounting firm for its efforts   in training and hiring [minority or] disadvantaged students.          SECTION 2.16.  Section 311.0101(d), Tax Code, is amended to   read as follows:          (d)  The board by rule shall adopt goals for the   participation of [minority business enterprises and] women-owned   business enterprises in the awarding of state contracts for   professional services. To implement the participation goals, the   board shall encourage each issuer to award to [minority business   enterprises and] women-owned business enterprises not less than 15   percent of the total value of all professional services contract   awards that the issuer expects to make in its fiscal year.          SECTION 2.17.  Section 284.007(d), Transportation Code, is   amended to read as follows:          (d)  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 they are [of their   identification as members of certain groups, including African   Americans, Hispanic Americans,] women and [, 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 operations 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 is owned by one or more persons described by   Subdivision (1) who also have proportionate interest in the   control, daily operations, 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 2.18.  Section 431.109(e), Transportation Code, is   amended to read as follows:          (e)  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 they are [of their   identification as members of certain groups, including African   Americans, Hispanic Americans,] women and[, 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 2.19.  Section 451.251, Transportation Code, is   amended to read as follows:          Sec. 451.251.  CONTRACT GOALS FOR DISADVANTAGED BUSINESSES.   An authority that does not have an up-to-date disadvantaged   business enterprise program[, as defined by 49 C.F.R. Part 23,] to   assist [minorities and] women in participating in authority   contracts should establish goals for that participation. The   recommended contract goals are:                (1)  17 percent for construction, 11 percent for   purchasing, and 24 percent for professional services; or                (2)  the weighted average equivalent of the categories   in Subdivision (1).          SECTION 2.20.  The heading to Section 451.252,   Transportation Code, is amended to read as follows:          Sec. 451.252.  WOMEN-OWNED BUSINESSES [MINORITY AND   DISADVANTAGED INDIVIDUALS] PROGRAM: CERTAIN AUTHORITIES.          SECTION 2.21.  Section 451.252(a), Transportation Code, is   amended to read as follows:          (a)  The board of an authority confirmed before July 1, 1985,   shall establish a program to encourage participation in contracts   of the authority by businesses owned by women [minorities or   disadvantaged individuals].          SECTION 2.22.  The heading to Section 451.253,   Transportation Code, is amended to read as follows:          Sec. 451.253.  [MINORITY AND] WOMEN-OWNED BUSINESS PROGRAM:   CERTAIN AUTHORITIES.          SECTION 2.23.  Sections 451.253(a), (c), and (d),   Transportation Code, are amended to read as follows:          (a)  An authority with a regional economic development   facility approved under Subchapter E may establish a program   reasonably designed to increase the participation of [minority and]   women-owned businesses in public contracts awarded by the   authority, and if the program is established, the board shall   provide a plan to assist [minority and] women-owned businesses in   the area served by the authority to achieve the purposes of the   program. If the board establishes a [an overall minority and]   women-owned business contract percentage goal as a part of the   program, the goal may not exceed the capability of the [minority   and] women-owned businesses in the area served by the authority to   perform the number and type of contracts awarded by the authority,   as determined by a qualified, independent source.          (c)  This section does not affect Sections 451.110 and   451.111, but prospective bidders may be required to meet uniform   standards designed to assure a reasonable degree of participation   by [minority and] women-owned businesses in the performance of any   contract.          (d)  In this section, "women-owned[:                [(1)  "Minority" includes blacks, Hispanics, Asian   Americans, American Indians, and Alaska natives.                [(2)  "Minority business" means a business concern more   than 50 percent of which is owned and controlled in management and   daily operations by members of one or more minorities.                [(3)  "Women-owned] business" means a business concern   more than 50 percent of which is owned and controlled in management   and daily operations by one or more women.          SECTION 2.24.  Section 451.353(b), Transportation Code, is   amended to read as follows:          (b)  A revenue bond indenture may limit a power of the   authority provided by Sections 451.054-451.060, 451.061(a) or (b),     451.064-451.068 [451.064-451.069], or 451.107(a)[, or 451.251] as   long as the bonds issued under the indenture are outstanding.          SECTION 2.25.  The heading to Section 452.201,   Transportation Code, is amended to read as follows:          Sec. 452.201.  [MINORITY AND] WOMEN-OWNED BUSINESS PROGRAM   IN CERTAIN AUTHORITIES.          SECTION 2.26.  Sections 452.201(a), (b), (d), and (e),   Transportation Code, are amended to read as follows:          (a)  An authority consisting of one subregion governed by a   subregional board created under Subchapter O  may establish a   program reasonably designed to increase the participation of   [minority and] women-owned business enterprises in contracts   awarded by the authority.  If the program is established, the board   shall provide a program outlining acceptable assistance to be given   [minority and] women-owned business enterprises in the area served   by the authority to achieve the purposes of the program.          (b)  An overall [minority and] women-owned business   enterprise contract percentage goal may be established as a part of   the program only after reasonable consultation with affected   organizations and a qualified independent source and after public   comment.  In establishing a goal, the authority shall consider the   various types of construction contracts the authority expects to   award and the effect of market conditions on the feasibility of   attaining the goals.          (d)  This section does not affect Sections 452.106, 452.107,   and 452.108(a) and (b), but prospective bidders may be required to   meet uniform standards designed to assure a reasonable degree of   participation by [minority and] women-owned business enterprises   in the performance of any contract.          (e)  In this section, "women-owned[:                [(1)  "Minority" includes blacks, Hispanics, Asian   Americans, American Indians, and Alaska natives.                [(2)  "Minority business enterprise" means a small   business concern at least 51 percent of which is owned and   controlled in management and daily operations by members of one or   more minorities.                [(3)  "Women-owned] business enterprise" means a small   business concern at least 51 percent of which is owned and   controlled in management and daily operations by one or more women.          SECTION 2.27.  The following laws are repealed:                (1)  Sections 381.004(a)(2) and (3), Local Government   Code; and                (2)  Section 161.131, Natural Resources Code.          SECTION 2.28.  Section 51.803(k), Education Code, is   repealed.   ARTICLE 3. TRANSITION AND EFFECTIVE DATE          SECTION 3.01.  The change in law made by this Act to   Subchapter U, Chapter 51, Education Code, applies beginning with   admissions to a general academic teaching institution for the   2024-2025 academic year. Admissions for an academic period   preceding that academic year are covered by the law in effect   immediately before the effective date of this Act, and the prior law   is continued in effect for that purpose.          SECTION 3.02.  (a) Except as provided by Subsection (b) of   this section, this Act takes effect September 1, 2023.          (b)  The section of this Act repealing Section 51.803(k),   Education Code, takes effect January 1, 2024.