| 1 | 1 | | By: Paxton S.B. No. 2484 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to prohibiting contracts or other agreements involving the |
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| 7 | 7 | | receipt of certain tax incentives by certain foreign-owned |
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| 8 | 8 | | companies. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subtitle F, Title 10, Government Code, is |
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| 11 | 11 | | amended by adding Chapter 2278 to read as follows: |
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| 12 | 12 | | CHAPTER 2278. PROHIBITION ON CONTRACTS INVOLVING RECEIPT OF TAX |
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| 13 | 13 | | INCENTIVES BY CERTAIN FOREIGN-OWNED COMPANIES |
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| 14 | 14 | | Sec. 2278.001. DEFINITIONS. In this chapter: |
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| 15 | 15 | | (1) "Company" means a sole proprietorship, |
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| 16 | 16 | | organization, association, corporation, partnership, joint |
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| 17 | 17 | | venture, limited partnership, limited liability partnership, or |
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| 18 | 18 | | limited liability company, including a wholly owned subsidiary, |
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| 19 | 19 | | majority-owned subsidiary, parent company, or affiliate of those |
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| 20 | 20 | | entities or business associations, that exists to make a profit. |
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| 21 | 21 | | (2) "Governmental entity" means a state agency or |
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| 22 | 22 | | political subdivision of this state. |
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| 23 | 23 | | (3) "Tax incentive" has the meaning assigned by |
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| 24 | 24 | | Section 490G.001. |
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| 25 | 25 | | Sec. 2278.002. PROHIBITED CONTRACTS. (a) A governmental |
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| 26 | 26 | | entity may not enter into a contract or other agreement relating to |
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| 27 | 27 | | tax incentives in this state with a company if: |
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| 28 | 28 | | (1) under the contract or other agreement, the company |
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| 29 | 29 | | would receive or be granted tax incentives from the governmental |
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| 30 | 30 | | entity; and |
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| 31 | 31 | | (2) the governmental entity knows that the company is: |
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| 32 | 32 | | (A) owned by or the majority of stock or other |
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| 33 | 33 | | ownership interest of the company is held or controlled by a company |
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| 34 | 34 | | or other entity, including a governmental entity, that is directly |
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| 35 | 35 | | controlled by the government of China, Iran, North Korea, or |
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| 36 | 36 | | Russia; or |
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| 37 | 37 | | (B) headquartered in China, Iran, North Korea, or |
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| 38 | 38 | | Russia. |
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| 39 | 39 | | (b) The prohibition described by Subsection (a) applies |
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| 40 | 40 | | regardless of whether: |
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| 41 | 41 | | (1) the company's or its parent company's securities |
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| 42 | 42 | | are publicly traded; or |
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| 43 | 43 | | (2) the company or its parent company is listed on a |
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| 44 | 44 | | public stock exchange as a Chinese, Iranian, North Korean, or |
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| 45 | 45 | | Russian company. |
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| 46 | 46 | | Sec. 2278.003. ASSISTANCE BY ECONOMIC INCENTIVE OVERSIGHT |
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| 47 | 47 | | BOARD. On request, the Economic Incentive Oversight Board |
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| 48 | 48 | | established under Chapter 490G shall, not later than the 60th |
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| 49 | 49 | | business day after the request, provide a governmental entity with |
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| 50 | 50 | | information to identify companies that may be prohibited from |
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| 51 | 51 | | contracting with a governmental entity under Section 2278.002. |
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| 52 | 52 | | SECTION 2. The change in law made by this Act applies only |
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| 53 | 53 | | to a contract entered into on or after the effective date of this |
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| 54 | 54 | | Act. A contract entered into before the effective date of this Act |
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| 55 | 55 | | is governed by the law in effect on the date the contract was |
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| 56 | 56 | | entered into, and the former law is continued in effect for that |
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| 57 | 57 | | purpose. |
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| 58 | 58 | | SECTION 3. This Act takes effect immediately if it receives |
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| 59 | 59 | | a vote of two-thirds of all the members elected to each house, as |
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| 60 | 60 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 61 | 61 | | Act does not receive the vote necessary for immediate effect, this |
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| 62 | 62 | | Act takes effect September 1, 2023. |
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