Small businesses are at the core of the Texas economy. Defined as those with 500 or fewer employees, small businesses provided 45 percent of the state's private-sector jobs, with more than 2.3 million small businesses accounting for more than 98 percent of the state's employers, according to 2010 statistics from the U.S. Small Business Administration.

More than 4 million Texans work for small businesses, and the Texas Legislature is focused on trying to help small businesses, with ideas like certifying them as homegrown businesses, opening the door for more cottage-industry food artisans and making permanent a small business tax exemption set to expire in 2014.

Bills by Rep. Eddie Rodriguez, D-Austin, would expand the allowable list of foods to be made and sold by small, independent artisans to include non-potentially hazardous foods such as candy, dried fruits, cereal, granola, dry mixes and vinegar.

It also allows those foods to be sold at farmers markets, farm stands, fairs and similar events directly to customers, making it easier for smaller makers to operate.

"It would relax some of what we feel to be onerous regulation on farmer's markets," said Lane McCarty, president of the Tomball Farmer's Market. "People for millennia have been going to community gardens and sharing food. Fresh food, something not altered, has a very low risk factor."

Vendors would still be required to label their products as home-produced, and include the producer's name and address.

"A lot of our vendors at the Tomball Farmer's Market are small mom and pop operations with a fraction of an acre," McCarty said. "They may have 30 tomato plants, which makes them too small to be commercial, but they can come to the farmer's market and make $100."

The bill provides opportunities for micro- and start-up businesses to meet the growing demand for locally produced foods in both rural and urban areas, Rodriguez said.

"This session, the Texas Legislature is focused on maintaining an economic environment where entrepreneurial vision can expand and small businesses can thrive," said Rep. Giovanni Capriglione, R-Southlake. "Whether it be through lessening the impact and reach of the business margins tax, providing creative economic development incentives or increasing the transparency and predictability of government regulations, lawmakers are clearly prioritizing the interests of small businesses around the state, upon whom we all depend to keep the economic engine going."

Tax relief proposal

On April 16, Gov. Rick Perry announced a four-point plan to give nearly $1.6 billion in tax relief to all Texas businesses that are subject to the state's franchise tax.

The plan reduces franchise taxes by 5 percent, provides a $1 million deduction for businesses with revenues of up to $20 million, lowers the rate for 1040EZ tax form filers and gives companies relocating to Texas from out of state a one-time moving expense deduction.

Perry's plan also makes permanent the state's small business tax exemption, which currently affects 29,000 businesses and is scheduled to end in 2014.

"Gov. Perry's tax relief proposals will go a long way in helping entrepreneurs and smaller businesses grow during this period of economic recovery," said Will Newton, executive director of the Texas branch of the National Federation of Independent Businesses.

Business-friendly state

The 2011 Small Business Survival Index lists Texas as the third-friendliest state for small business, but lawmakers said they hope to boost it to No. 1 with several ideas.

One proposal would require the comptroller and state agencies to give preferences to small businesses when purchasing goods or services with a value of less than $500,000. Another would create a state Small Business Advisory Council.

"I think most of the bills that are presented tend to be favorable to small business, and large [businesses] in some instances as well," said Rep. Cecil Bell Jr., R-Magnolia. "What we've heard so far is in that line of thinking—and certainly protecting the business climate in Texas."

Underscoring the importance of small business, the Texas House has a committee dedicated to small businesses—the House Economic and Small Business Development Committee—which is considering more than 100 bills this session.

In its interim report to the Texas Legislature, the committee recommended lawmakers make it easier for students to get entrepreneurship education, ease tax burdens on small businesses throughout the state, create incentives for investing in small businesses, consolidate resources for entrepreneurs and brand the state as immigrant-friendly.

Additional reporting by Tamra Santana