88R7443 LRM-D
By: Paul H.B. No. 2758
A BILL TO BE ENTITLED
AN ACT
relating to a prohibition on state contracts with certain foreign
companies or organizations; authorizing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 10, Government Code, is
amended by adding Chapter 2279 to read as follows:
CHAPTER 2279. PROHIBITION ON STATE CONTRACTS WITH CERTAIN
COMPANIES OR ORGANIZATIONS IN SCRUTINIZED COUNTRIES
Sec. 2279.001. DEFINITIONS. In this chapter:
(1) "Company" means a sole proprietorship,
organization, association, corporation, partnership, joint
venture, limited partnership, limited liability partnership, or
limited liability company, including a wholly owned subsidiary,
majority-owned subsidiary, parent company, or affiliate of those
entities or business associations, that exists to make a profit.
(2) "Nonprofit organization" includes a nonprofit
corporation or association.
(3) "Scrutinized country" means China, Iran, North
Korea, or Russia.
Sec. 2279.002. PROVISION REQUIRED IN STATE CONTRACTS. (a)
A state agency may not enter into a contract with a vendor for goods
or services unless the contract contains a written verification
from the vendor that it is not:
(1) a company owned or directly controlled by the
government of a scrutinized country; or
(2) a nonprofit organization or government-organized
nongovernmental organization that is headquartered in a
scrutinized county.
(b) The prohibition described by Subsection (a) applies
regardless of whether:
(1) the company's or its parent company's securities
are publicly traded; or
(2) the company or its parent company is listed on a
public stock exchange as a company of a scrutinized country.
Sec. 2279.003. FALSE VERIFICATION; PENALTIES. (a) If a
state agency determines that a vendor holding a contract with the
state agency was ineligible to have the contract awarded under
Section 2279.002 because the vendor's written verification was
false, the state agency shall immediately terminate the contract
without further obligation to the vendor.
(b) A vendor described by Subsection (a):
(1) is barred from responding to a solicitation for or
being awarded a contract for goods or services by any state agency;
and
(2) is liable to this state for a civil penalty of
either $250,000, or twice the amount of the terminated contract
under Subsection (a), whichever is greater.
(c) The attorney general may bring an action to recover a
civil penalty imposed under Subsection (b)(2). The attorney
general may recover reasonable attorney's fees and court costs in
bringing an action under this subsection.
SECTION 2. Section 2279.002, Government Code, as added by
this Act, applies only to a contract entered into on or after the
effective date of this Act. A contract entered into before the
effective date of this Act is governed by the law in effect on the
date the contract was entered into, and the former law is continued
in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2023.