Texas 2023 - 88th Regular

Texas Senate Bill SB2459 Compare Versions

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1	1	88R750 RDS/CXP-D
2	2	By: Hughes S.B. No. 2459
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the disclosure of certain gifts, grants, contracts, and
8	8	financial interests received from a foreign source by certain state
9	9	agencies, public institutions of higher education, and state
10	10	contractors, and to the approval and monitoring of
11	11	employment-related foreign travel and activities by certain public
12	12	institution of higher education employees; providing civil and
13	13	administrative penalties.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Title 7, Government Code, is amended by adding
16	16	Chapters 794 and 795 to read as follows:
17	17	CHAPTER 794. DISCLOSURE OF CERTAIN GIFTS, GRANTS, CONTRACTS, AND
18	18	INTERESTS WITH FOREIGN SOURCES
19	19	Sec. 794.001. DEFINITIONS. In this chapter:
20	20	(1) "Foreign country of concern" means:
21	21	(A) the People's Republic of China;
22	22	(B) the Russian Federation;
23	23	(C) the Islamic Republic of Iran;
24	24	(D) the Democratic People's Republic of Korea;
25	25	(E) the Venezuelan regime under Nicolas Maduro;
26	26	(F) the Syrian Arab Republic; or
27	27	(G) an agency or entity under the significant
28	28	control of a country described by this subdivision.
29	29	(2) "Foreign source" means:
30	30	(A) a foreign government or agency of a foreign
31	31	government;
32	32	(B) a legal entity created solely under the laws
33	33	of a foreign government or an affiliate or subsidiary acting on
34	34	behalf of the legal entity;
35	35	(C) an individual who is not a citizen or
36	36	national of the United States, including a territory or
37	37	protectorate of the United States; or
38	38	(D) an agent acting on behalf of an individual or
39	39	entity described by Paragraph (A), (B), or (C).
40	40	(3) "Interest" means any direct or indirect:
41	41	(A) investment in or loan extended to an entity
42	42	that constitutes at least five percent of the entity's net worth; or
43	43	(B) control over an entity at a level exerting
44	44	similar or greater influence on the decision making or governance
45	45	of the entity as an investment described by Paragraph (A).
46	46	(4) "State agency" means:
47	47	(A) a board, commission, department, office, or
48	48	other agency in the executive branch of state government that was
49	49	created by the constitution or a statute of this state, including an
50	50	institution of higher education as defined by Section 61.003,
51	51	Education Code; or
52	52	(B) the legislature or a legislative agency.
53	53	Sec. 794.002. DATABASE OF FOREIGN SOURCE GIFTS, GRANTS,
54	54	CONTRACTS, AND INTERESTS. (a) The comptroller, in consultation
55	55	with the Department of Information Resources, shall establish and
56	56	maintain a database containing the disclosures submitted to the
57	57	comptroller under this chapter and make the disclosures available
58	58	to the public on an Internet website.
59	59	(b) The comptroller and Department of Information Resources
60	60	shall ensure that all disclosures submitted to the comptroller
61	61	under this chapter are easily accessible through the comptroller's
62	62	purchasing system.
63	63	Sec. 794.003. REQUIRED DISCLOSURE OF CERTAIN GIFTS AND
64	64	GRANTS RECEIVED BY STATE AGENCY. (a) A state agency that receives,
65	65	directly or indirectly from a foreign source, a gift or grant with a
66	66	value of at least $50,000 shall disclose the gift or grant to the
67	67	comptroller not later than the 30th day after the date the gift or
68	68	grant is received.
69	69	(b) A disclosure under this section must include the:
70	70	(1) date the state agency received the gift or grant;
71	71	(2) amount of the gift or grant;
72	72	(3) foreign source's name; and
73	73	(4) foreign source's country of residence or domicile.
74	74	Sec. 794.004. REQUIRED DISCLOSURES BY CONTRACTORS,
75	75	PROSPECTIVE CONTRACTORS, AND GRANT APPLICANTS. (a) This section
76	76	applies only to a grant or contract awarded by a state agency that
77	77	has a value of at least $100,000 paid wholly or partly from public
78	78	funds of the state agency.
79	79	(b) This section does not apply to a grant application or
80	80	contract proposal submitted by:
81	81	(1) a public or nonprofit research institution in
82	82	connection with research funded by a federal agency;
83	83	(2) a state agency required to disclose gifts and
84	84	grants from foreign sources under Section 794.003 or another law of
85	85	this state; or
86	86	(3) a foreign source, if award of the grant or contract
87	87	to the foreign source would require disclosure under Section
88	88	794.003 or another law of this state.
89	89	(c) A person who submits an application or proposal for a
90	90	grant or contract to which this section applies shall disclose to
91	91	the state agency and the comptroller any:
92	92	(1) current or former interest in the person held by a
93	93	foreign country of concern with a value of at least $50,000;
94	94	(2) contract between the person and a foreign country
95	95	of concern with a value of at least $50,000 that was entered into or
96	96	in effect at any time during the five years preceding the date the
97	97	person submits the grant application or contract proposal; or
98	98	(3) gift or grant with a value of at least $50,000
99	99	received by the person from a foreign country of concern during the
100	100	five years preceding the date the person submits the grant
101	101	application or contract proposal.
102	102	(d) A disclosure under this section must:
103	103	(1) be submitted with the grant application or
104	104	contract proposal or have been submitted not more than one year
105	105	before the date the grant application or contract proposal is
106	106	submitted;
107	107	(2) be updated at least monthly while the grant
108	108	application or contract proposal is pending; and
109	109	(3) include:
110	110	(A) the name and mailing address of the person
111	111	making the disclosure;
112	112	(B) the value of the interest, contract, gift, or
113	113	grant being disclosed;
114	114	(C) the foreign country of concern;
115	115	(D) the date the interest was acquired, the
116	116	contract was entered into, or the gift or grant was received, as
117	117	applicable;
118	118	(E) the date the contract or interest was
119	119	terminated, if applicable; and
120	120	(F) the name of an agent of the foreign country of
121	121	concern if the agent was the source of the interest, contract, gift,
122	122	or grant.
123	123	(e) A person who is a party to an existing grant or contract
124	124	to which this section applies shall disclose to the state agency and
125	125	the comptroller:
126	126	(1) the information required by Subsection (d) not
127	127	later than the 30th day after the date:
128	128	(A) a foreign country of concern acquires an
129	129	interest in the person with a value of at least $50,000;
130	130	(B) the person enters into a contract with a
131	131	foreign country of concern with a value of at least $50,000; or
132	132	(C) the person receives a gift or grant from a
133	133	foreign country of concern with a value of at least $50,000; and
134	134	(2) a sanction, embargo, or other trade restriction
135	135	not later than the 30th day after the date the information is
136	136	discovered as a result of screening conducted under Section
137	137	794.005.
138	138	Sec. 794.005. SCREENING OF CERTAIN CONTRACTORS. (a) At
139	139	least once every five years, the comptroller shall screen each
140	140	vendor who participates in an online procurement system maintained
141	141	by the comptroller or another state agency and has the ability to
142	142	fulfill an order with a value of at least $100,000 to determine
143	143	whether the person is subject, under federal law, to any:
144	144	(1) trade sanction;
145	145	(2) embargo; or
146	146	(3) other trade restriction.
147	147	(b) The comptroller shall request the assistance of federal
148	148	agencies responsible for identifying persons and organizations
149	149	that are subject to the trade restrictions described by Subsection
150	150	(a).
151	151	(c) A person whom the comptroller identifies as being
152	152	subject to a trade restriction described by Subsection (a) shall
153	153	make a disclosure under Section 794.004.
154	154	(d) The comptroller shall notify a person who is found to be
155	155	subject to a trade restriction under Subsection (a) that the person
156	156	must make a disclosure under Subsection (c) and shall indicate on
157	157	the online procurement system that the vendor has been found to be
158	158	subject to a trade restriction.
159	159	(e) The comptroller shall ensure that disclosures made
160	160	under this section are easily accessible by state agencies using an
161	161	online procurement system.
162	162	Sec. 794.006. INVESTIGATION. (a) The comptroller shall
163	163	investigate an alleged violation of this chapter upon receiving a
164	164	complaint from an inspector general or other compliance officer of
165	165	a state agency or political subdivision or any sworn complaint
166	166	based on substantive information and reasonable belief. The office
167	167	of the attorney general shall assist with the investigation at the
168	168	comptroller's request.
169	169	(b) The comptroller, the attorney general, or an agent or
170	170	compliance officer authorized by a state agency or political
171	171	subdivision may request records relevant to a reasonable suspicion
172	172	of a violation of this chapter. A person who receives a request
173	173	under this subsection must produce the records not later than the
174	174	30th day after the date the person receives the request, unless the
175	175	parties to the request agree to a later date.
176	176	Sec. 794.007. ENFORCEMENT; CIVIL PENALTY FOR VIOLATION.
177	177	(a) A state agency that fails to provide a disclosure under Section
178	178	794.003 is liable to this state for a civil penalty in the amount of
179	179	$5,000 for the first violation and $10,000 for each subsequent
180	180	violation.
181	181	(b) A person who fails to provide a disclosure under Section
182	182	794.004 or fails to provide a record requested under Section
183	183	794.006 is liable to this state for a civil penalty in the amount of
184	184	$5,000 for the first violation and $10,000 for each subsequent
185	185	violation.
186	186	(c) If it is shown that a state agency has committed at least
187	187	two previous violations of this chapter, the final order
188	188	determining the third or subsequent violation must:
189	189	(1) identify the state officer or employee responsible
190	190	for acceptance of the undisclosed grant or gift; and
191	191	(2) refer the violation to the governor, the speaker
192	192	of the house of representatives, and the lieutenant governor to
193	193	consider removing the state officer from office or terminating the
194	194	state employee, as applicable.
195	195	(d) Except as provided by this section, a state agency may
196	196	not accept a contract proposal from or award a contract or grant to
197	197	a person if it is shown that the person has committed at least three
198	198	violations of this chapter. A state agency may accept a contract
199	199	proposal from or award a contract or grant to a person with the
200	200	approval of the comptroller.
201	201	(e) The attorney general may sue to collect the civil
202	202	penalty under this section.
203	203	(f) A suit or petition under this section may be filed in a
204	204	district court in Travis County.
205	205	Sec. 794.008. RULES. (a) The comptroller and Department of
206	206	Information Resources shall adopt rules necessary to carry out this
207	207	chapter.
208	208	(b) Rules adopted under this section may identify federal
209	209	agencies to be consulted under Section 794.005 and the procedure
210	210	for notifying a vendor of the disclosure requirement under this
211	211	chapter.
212	212	CHAPTER 795. CERTAIN INTERNATIONAL CULTURAL AGREEMENTS PROHIBITED
213	213	Sec. 795.001. DEFINITIONS. In this chapter:
214	214	(1) "Foreign country of concern" has the meaning
215	215	assigned by Section 794.001.
216	216	(2) "Governmental entity" has the meaning assigned by
217	217	Section 2251.001.
218	218	Sec. 795.002. CERTAIN INTERNATIONAL CULTURAL AGREEMENTS
219	219	PROHIBITED. (a) A governmental entity authorized to spend state
220	220	appropriations or impose an ad valorem tax may not participate in an
221	221	agreement with or accept a grant from a foreign country of concern
222	222	that:
223	223	(1) constrains the governmental entity's freedom of
224	224	contract;
225	225	(2) allows the curriculum or values of any program in
226	226	this state to be directed or controlled by the foreign country of
227	227	concern; or
228	228	(3) promotes an agenda detrimental to the safety or
229	229	security of the United States or its residents.
230	230	(b) Before entering into a cultural exchange agreement with
231	231	a foreign country of concern, including an agreement that relates
232	232	to the exchange of ideas, traditions, or knowledge, the
233	233	governmental entity shall review the agreement and determine
234	234	whether the agreement promotes an agenda detrimental to the safety
235	235	or security of the United States or its residents.
236	236	(c) A governmental entity shall request the assistance of
237	237	appropriate federal agencies, including agencies responsible for
238	238	national security or the enforcement of trade sanctions, embargoes,
239	239	or other trade restrictions, in reviewing an agreement and making a
240	240	determination under Subsection (b).
241	241	(d) A governmental entity may not enter into an agreement if
242	242	a federal agency consulted under Subsection (c) determines that the
243	243	agreement promotes an agenda that would be detrimental to the
244	244	safety or security of the United States or its residents.
245	245	Sec. 795.003. CONDITIONAL PARTICIPATION IN INTERNATIONAL
246	246	CULTURAL AGREEMENT PROHIBITED. A governmental entity may not
247	247	accept money, a financial benefit, or other consideration from a
248	248	foreign country of concern that is conditioned on participating in
249	249	a program or other endeavor to promote the language or culture of
250	250	the foreign country of concern.
251	251	SECTION 2. Subtitle A, Title 3, Education Code, is amended
252	252	by adding Chapter 51B to read as follows:
253	253	CHAPTER 51B. FOREIGN GIFTS AND TRAVEL
254	254	SUBCHAPTER A. GENERAL PROVISIONS
255	255	Sec. 51B.001. DEFINITIONS. In this chapter:
256	256	(1) "Coordinating board" means the Texas Higher
257	257	Education Coordinating Board.
258	258	(2) "Foreign country of concern" has the meaning
259	259	assigned by Section 794.001, Government Code.
260	260	(3) "Foreign government" means the government or an
261	261	agent of the government of any country, nation, or group of nations,
262	262	or any province or other political subdivision of any country or
263	263	nation, other than the United States government or the government
264	264	of a state or political subdivision of the United States.
265	265	(4) "Foreign source" has the meaning assigned by
266	266	Section 794.001, Government Code.
267	267	(5) "Governing board," "institution of higher
268	268	education," and "university system" have the meanings assigned by
269	269	Section 61.003.
270	270	Sec. 51B.002. RULES. The coordinating board shall adopt
271	271	rules as necessary to implement this chapter.
272	272	SUBCHAPTER B. FOREIGN GIFT REPORTING AND REQUIREMENTS
273	273	Sec. 51B.051. FOREIGN GIFT AGREEMENT REQUIRED. (a) An
274	274	institution of higher education that accepts a gift directly or
275	275	indirectly from a foreign source shall enter into a written gift
276	276	agreement with the foreign source regarding the gift.
277	277	(b) A gift agreement required under Subsection (a) must:
278	278	(1) be signed by the foreign source and the chief
279	279	administrative officer of the institution of higher education or
280	280	the officer's designee; and
281	281	(2) include:
282	282	(A) a detailed description of the purpose for
283	283	which the institution will use the gift;
284	284	(B) an identification of the persons the gift is
285	285	explicitly intended to benefit; and
286	286	(C) any applicable condition, requirement,
287	287	restriction, or term made a part of the gift regarding the control
288	288	of curricula, faculty, student admission, or student fees or
289	289	constraints placed on the institution to take a specific public
290	290	position or to award an honorary degree.
291	291	Sec. 51B.052. FOREIGN GIFT REPORTING REQUIRED. (a) Twice
292	292	each year on dates designated by the coordinating board, each
293	293	institution of higher education shall compile and submit as
294	294	provided by Subsection (c) a report of each gift the institution
295	295	receives directly or indirectly from a foreign source during the
296	296	fiscal year in which the report is made that:
297	297	(1) has a value of $50,000 or more; or
298	298	(2) is received from a foreign source that provides
299	299	more than one gift to the institution during that fiscal year and
300	300	the total value of those gifts is $50,000 or more.
301	301	(b) For purposes of this section, a gift received from a
302	302	foreign source through an intermediary is considered an indirect
303	303	gift.
304	304	(c) An institution of higher education shall submit a report
305	305	required under this section to the institution's governing board
306	306	and the coordinating board. Institutions that are component
307	307	institutions of a university system may consolidate the
308	308	institutions' respective reports into a single report submitted to
309	309	the coordinating board.
310	310	Sec. 51B.053. CONTENTS OF FOREIGN GIFT REPORT. (a) For
311	311	each gift required to be reported under Section 51B.052, an
312	312	institution of higher education must include in the report the
313	313	following information, unless the disclosure of that information is
314	314	prohibited or the information is confidential under federal or
315	315	state law:
316	316	(1) the amount of the gift;
317	317	(2) the date the gift was received;
318	318	(3) the name of the foreign source and, if not a
319	319	foreign government, the country of citizenship, if known, and the
320	320	country of principal residence or domicile of the foreign source;
321	321	and
322	322	(4) a copy of a gift agreement required under Section
323	323	51B.051.
324	324	(b) Information reported under this section is not
325	325	confidential except as otherwise provided by state law or unless
326	326	protected by federal or state law as a trade secret.
327	327	Sec. 51B.054. FOREIGN GIFT REPORTING AUDIT. Using existing
328	328	resources, the coordinating board shall annually conduct random
329	329	inspections or audits of at least five percent of the total number
330	330	of gifts or gift agreements reported under Section 51B.052 during
331	331	the preceding fiscal year to determine an institution of higher
332	332	education's compliance with the requirements of this subchapter.
333	333	Sec. 51B.055. ENFORCEMENT. (a) If the coordinating board
334	334	determines that an institution of higher education negligently
335	335	fails to disclose the information required by this subchapter, the
336	336	coordinating board may assess an administrative penalty against the
337	337	institution in an amount equal to 105 percent of the value of each
338	338	undisclosed gift.
339	339	(b) An institution of higher education may not pay an
340	340	administrative penalty assessed under this section using state or
341	341	federal money.
342	342	SUBCHAPTER C. FOREIGN TRAVEL: RESEARCH INSTITUTIONS
343	343	Sec. 51B.101. APPLICABILITY. This subchapter applies only
344	344	to an institution of higher education that has an annual research
345	345	budget of $10 million or more.
346	346	Sec. 51B.102. FOREIGN TRAVEL: RESEARCH INSTITUTIONS. (a)
347	347	Each institution of higher education to which this subchapter
348	348	applies shall establish a research integrity office to operate an
349	349	international travel approval and monitoring program at the
350	350	institution.
351	351	(b) The program must require, in addition to any other
352	352	travel approval process required by the institution of higher
353	353	education, preapproval from the institution's research integrity
354	354	office for any employment-related foreign travel or activities by a
355	355	faculty member, researcher, or research department staff member of
356	356	the institution.
357	357	(c) The research integrity office may preapprove travel or
358	358	activities under the program only if the applicant:
359	359	(1) reviews and acknowledges guidance published by the
360	360	institution of higher education that relates to countries under
361	361	sanctions or other restrictions by this state or the United States
362	362	government, including:
363	363	(A) federal license requirements;
364	364	(B) customs rules;
365	365	(C) export controls;
366	366	(D) restrictions on taking institution property,
367	367	including intellectual property, abroad;
368	368	(E) restrictions on presentation, teaching, and
369	369	interactions with foreign colleagues; and
370	370	(F) other subjects important to the research and
371	371	academic integrity of the institution; and
372	372	(2) agrees to comply with the institution's
373	373	limitations on travel and activities abroad and all applicable
374	374	federal laws.
375	375	Sec. 51B.103. MAINTENANCE OF RECORDS AND REPORT. (a) An
376	376	institution of higher education shall maintain for at least three
377	377	years, or any longer period of time required by applicable federal
378	378	or state law, records relating to employment-related foreign travel
379	379	or activities by a faculty member, researcher, or research staff
380	380	member of the institution, including:
381	381	(1) each foreign travel request and approval;
382	382	(2) expenses reimbursed by the institution for foreign
383	383	travel, including for travel, food, and lodging;
384	384	(3) payments and honoraria received during foreign
385	385	travel or activities, including for travel, food, and lodging;
386	386	(4) the purpose of each foreign travel; and
387	387	(5) any record related to the foreign activity review.
388	388	(b) Each institution of higher education shall annually
389	389	submit to the institution's governing board a report on
390	390	employment-related foreign travel and activities by a faculty
391	391	member, researcher, or research staff member of the institution to
392	392	foreign countries of concern. The report must list each traveler,
393	393	foreign location visited, and foreign institution visited.
394	394	SECTION 3. Section 794.004, Government Code, as added by
395	395	this Act, applies only to a grant application or contract proposal
396	396	submitted on or after the effective date of this Act, except as
397	397	otherwise provided by that section.
398	398	SECTION 4. Sections 795.002 and 795.003, Government Code,
399	399	as added by this Act, apply only to an agreement entered into on or
400	400	after the effective date of this Act.
401	401	SECTION 5. Not later than January 1, 2024, the comptroller
402	402	of public accounts and Department of Information Resources shall
403	403	create and make available to the public the Internet database
404	404	required by Section 794.002, Government Code, as added by this Act.
405	405	SECTION 6. Chapter 51B, Education Code, as added by this
406	406	Act, applies beginning July 1, 2024.
407	407	SECTION 7. Not later than April 1, 2024, the Texas Higher
408	408	Education Coordinating Board shall adopt the rules required by
409	409	Section 51B.002, Education Code, as added by this Act.
410	410	SECTION 8. This Act takes effect September 1, 2023.