Senate Bill 424 by Senator Juan “Chuy” Hinojosa has passed the Texas Senate and the House of Representatives and will soon be on its way to Governor Greg Abbott’s desk for his signature. The bill ensures that small businesses across the state are given the opportunity to remedy a first-time regulatory violation before an administrative penalty is imposed.

In 2020, Texas had 2.8 million small businesses representing 99.8% of businesses statewide. These businesses employ over 4.8 million Texans and cover a wide range of industries.

Senator Hinojosa filed SB 424 following a recommendation made by the Office of Small Business Assistance Advisory Task Force which Senator Hinojosa created in 2013 and is within the Office of the Governor. The task force regularly produces reports highlighting issues that small businesses in Texas are facing, as well as recommendations for improvement. Their 2019 biennial report pointed out that many small businesses are unlikely to have compliance teams or resources available to ensure regulatory compliance, which can result in costly penalties and fines. This burden was only heightened during the COVID-19 pandemic when small businesses struggled to keep up with frequently changing of regulations and rules.

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