89R10594 LRM-F
By: Cain H.B. No. 2244
A BILL TO BE ENTITLED
AN ACT
relating to a prohibition on state contracts to purchase electric
vehicles and related components produced in scrutinized countries;
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 2278 to read as follows:
CHAPTER 2278. PROHIBITION ON STATE CONTRACTS FOR ELECTRIC VEHICLES
AND RELATED COMPONENTS PRODUCED IN SCRUTINIZED COUNTRIES
Sec. 2278.001. 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) "Electric vehicle" means a motor vehicle that
draws propulsion energy only from a rechargeable energy storage
system.
(3) "Forced labor or services" has the meaning
assigned by Section 20A.01, Penal Code.
(4) "Nonprofit organization" means an entity that is
exempt from federal income tax under Section 501(a), Internal
Revenue Code of 1986, by being listed as an exempt entity under
Section 501(c) of that code, has submitted an application with the
Internal Revenue Service for recognition of an exemption under
Section 501(c) of that code, or is a nonprofit corporation or
association organized or formed under the laws of this state or
another state.
(5) "Scrutinized country" means the People's Republic
of China.
Sec. 2278.002. PROVISION REQUIRED IN STATE CONTRACTS. (a)
A state agency may not enter into a contract with a vendor to
purchase an electric vehicle or any component of an electric
vehicle unless the contract contains a written verification from
the vendor that:
(1) the vendor is not:
(A) a company organized under the laws of or
headquartered in a scrutinized country;
(B) a company owned, operated, or directly
controlled by the government of a scrutinized country;
(C) a nonprofit organization or
government-organized nongovernmental organization organized under
the laws of or headquartered in a scrutinized country; or
(D) a company or nonprofit organization that
subcontracts with a company or organization described by Paragraphs
(A)-(C) for production of any component of an electric vehicle;
(2) the electric vehicle or component of an electric
vehicle was not mined, produced, or manufactured wholly or partly
in a scrutinized country; or
(3) the vendor or any subcontractor of the vendor has
not used forced labor or services in the production of the electric
vehicle or component.
(b) The prohibitions described by Subsection (a) apply
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. 2278.003. CONTRACT TERMINATION FOR FALSE
VERIFICATION; BARRING FROM STATE CONTRACTS. (a) If a state agency
determines that a vendor holding a contract with the state agency
was ineligible for the contract awarded under Section 2278.002
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) is barred from
responding to a solicitation for or contracting for goods or
services procured by any state agency.
Sec. 2278.004. ATTORNEY GENERAL ENFORCEMENT; CIVIL
PENALTY; INJUNCTION. (a) A vendor that is in violation of this
chapter is liable for a civil penalty not to exceed $250,000 for
each violation.
(b) The attorney general may bring an action in the name of
this state to:
(1) recover a civil penalty under this section;
(2) restrain or enjoin the vendor from violating this
chapter; or
(3) recover the civil penalty and seek injunctive
relief.
(c) The attorney general may recover reasonable attorney's
fees and court costs in bringing an action under this section.
SECTION 2. Section 2278.002, 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, 2025.