HB 346

relating to support for new businesses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter B, Chapter 405, Government Code, is
amended by adding Section 405.025 to read as follows:
Sec. 405.025.  ELIMINATION OF FIRST YEAR BUSINESS ENTITY
FEES.  The secretary of state shall, in coordination with
appropriate state and local governmental entities, work to
eliminate all fees relating to licensing and registration required
to be paid by a business entity in the entity's first year of
business, to the extent authorized by law.
SECTION 2.  Subchapter E, Chapter 481, Government Code, is
amended by adding Section 481.081 to read as follows:
Sec. 481.081.  SUPPORT FOR NEW BUSINESS ORGANIZATIONS.  To
the extent possible, the office shall encourage the appropriate
state entities to allocate at least five percent of funding
budgeted for economic development programs, including community
development block grants, to support businesses that:
(1)  were established within the previous five years;
(2)  have a principal place of business in this state.
SECTION 3.  Subchapter B, Chapter 2155, Government Code, is
amended by adding Section 2155.0735 to read as follows:
Sec. 2155.0735.  PARTICIPATION BY NEW BUSINESSES IN STATE
PURCHASING.  (a)  In this section, "new business" means a business
in operation for less than five years with its principal place of
(b)  The comptroller shall make reasonable efforts to
increase the number of contracts for the purchase of goods or
services awarded by state agencies to new businesses to at least
five percent of awarded contracts in a state fiscal year.
SECTION 4.  Subchapter B, Chapter 2155, Government Code, is
amended by adding Section 2155.092 to read as follows:
Sec. 2155.092.  REPORTING CONTRACTS WITH NEW BUSINESS.  (a)
In this section, "new business" means a business that has been in
operation for less than five years and has its principal place of
(b)  Not later than September 1 of each year, the comptroller
shall file a report with the legislature that identifies:
(1)  the number of state contracts awarded to new
businesses during the previous year;
(2)  the dollar value of all state contracts awarded to
new businesses during the previous year;
(3)  the number of state contracts awarded to new
businesses that qualify as a historically underutilized business,
as defined by Section 2161.001, during the previous year;
(4)  the geographic area of the state, including the
city and county, where each new business awarded a state contract in
(5)  the percentage of all state contracts awarded to
new businesses during the previous year; and
(6)  the percentage of the total dollar value of all
state contracts awarded to new businesses during the previous year.
(c)  As part of the report required by Subsection (b) that
must be filed before September 1, 2026, the comptroller, in
conjunction with the Texas Economic Development and Tourism Office
within the office of the governor, shall make recommendations to
improve access by new businesses to state contracting, including
new businesses owned by statistically underrepresented demographic
groups and in statistically underrepresented geographic areas of
the state.  This subsection expires January 1, 2027.
SECTION 5.  Subchapter D, Chapter 301, Labor Code, is
amended by adding Section 301.0701 to read as follows:
Sec. 301.0701.  ANNUAL REPORT ON ECONOMIC DEVELOPMENT.  Not
later than September 1 each year, the commission shall submit a
report to the legislature on economic development in this state.
(1)  the proportion of economic development funding,
including community development block grants, that supports
(A)  an individual who started a new business
within the preceding five years; or
(B)  organizations that provide services to
individuals described by Paragraph (A); and
(2)  the total amount of economic development funding
provided to programs described by Subdivision (1).
SECTION 6.  Subchapter A, Chapter 302, Labor Code, is
amended by adding Section 302.0021 to read as follows:
Sec. 302.0021.  ANNUAL WORKFORCE DEVELOPMENT FUNDING
REPORT.  Not later than September 1 of each year, the commission
shall prepare and submit to the legislature a report on workforce
development funding. The report must include information on the
total amount of funding allocated by the division and any local
workforce development boards, and the percentage of all workforce
development funding that total represents, to support
organizations, services, and programs for:
(1)  individuals starting a new business; and
(2)  businesses established in the preceding five years
whose primary place of business is in this state.
SECTION 7.  Subchapter D, Chapter 302, Labor Code, is
amended by adding Section 302.0615 to read as follows:
Sec. 302.0615.  ALLOCATION OF FUNDS TO SUPPORT NEW
BUSINESSES.  Unless superseded by federal law and notwithstanding
any other provision of this subchapter or other law, the commission
shall make reasonable efforts to ensure that at least five percent
of workforce development funds allocated by the commission in a
state fiscal year, including any funds distributed by local
workforce development boards, are used to support programs or
organizations that provide support to:
(1)  persons establishing a business in this state; or
(A)  have been in operation for less than five
(B)  have their principal place of business in
SECTION 8.  Not later than September 1, 2026, the
comptroller of public accounts shall prepare and submit the first
annual report required by Section 2155.092, Government Code, as
SECTION 9.  Not later than September 1, 2026, the Texas
Workforce Commission shall prepare and submit the first annual
report required by Sections 301.0701 and 302.0021, Labor Code, as
SECTION 10.  This Act takes effect September 1, 2025.