Texas 2025 - 89th Regular

Texas House Bill HB2403 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R8425 RDS-D
2	2	By: Leo Wilson H.B. No. 2403
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to a prohibition on governmental contracts with Chinese
10	10	companies for certain information and communications technology;
11	11	authorizing a civil penalty.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. The heading to Chapter 2275, Government Code, is
14	14	amended to read as follows:
15	15	CHAPTER 2275. PROHIBITION ON CONTRACTS WITH CERTAIN FOREIGN-OWNED
16	16	COMPANIES IN CONNECTION WITH CRITICAL INFRASTRUCTURE AND
17	17	INFORMATION AND COMMUNICATIONS TECHNOLOGY
18	18	SECTION 2. Chapter 2275, Government Code, is amended by
19	19	designating Sections 2275.0101 through 2275.0103 as Subchapter A
20	20	and adding a subchapter heading to read as follows:
21	21	SUBCHAPTER A. PROHIBITION ON CERTAIN CONTRACTS IN CONNECTION WITH
22	22	CRITICAL INFRASTRUCTURE
23	23	SECTION 3. Chapter 2275, Government Code, is amended by
24	24	adding Subchapter B to read as follows:
25	25	SUBCHAPTER B. PROHIBITION ON CERTAIN CONTRACTS IN CONNECTION WITH
26	26	INFORMATION AND COMMUNICATIONS TECHNOLOGY
27	27	Sec. 2275.0201. DEFINITIONS. In this subchapter:
28	28	(1) "Control" means the direct or indirect power,
29	29	whether or not exercised, to determine, direct, or decide important
30	30	matters affecting a company through the ownership of a majority or a
31	31	dominant minority of the total outstanding voting interest in the
32	32	company, board representation, proxy voting, special share,
33	33	contractual arrangement, formal or informal arrangement to act in
34	34	concert, or other means of exercising power.
35	35	(2) "Governmental entity" has the meaning assigned by
36	36	Section 2251.001.
37	37	(3) "Information or communications technology or
38	38	service" means a hardware, software, or other product or service
39	39	and its components that is designed to facilitate by electronic
40	40	means the processing, storage, retrieval, communication,
41	41	transmission, or display of information or data.
42	42	(4) "Scrutinized company" means a company or a wholly
43	43	owned subsidiary or majority-owned subsidiary of a company that is:
44	44	(A) organized in or under the laws of the
45	45	People's Republic of China or has its principal place of business in
46	46	the People's Republic of China;
47	47	(B) a publicly traded company for which the
48	48	government of the People's Republic of China has the ability to:
49	49	(i) exercise control over the company;
50	50	(ii) appoint or discharge a board member,
51	51	officer, or director; or
52	52	(iii) exercise any other right not
53	53	available to a retail investor holding an equivalent share of
54	54	ownership; or
55	55	(C) a privately held company in which the
56	56	government of the People's Republic of China holds any share of
57	57	ownership.
58	58	Sec. 2275.0202. CONTRACTS WITH SCRUTINIZED COMPANIES
59	59	PROHIBITED; EXCEPTION. (a) Except as provided by Subsection (b), a
60	60	scrutinized company may not submit a bid for a contract or enter
61	61	into a contract with a governmental entity relating to an
62	62	information or communications technology or service.
63	63	(b) A governmental entity may enter into a contract relating
64	64	to an information or communications technology or service with a
65	65	scrutinized company if the governmental entity, with the approval
66	66	of the governor, determines:
67	67	(1) the only vendors available to provide the
68	68	information or communications technology or service are
69	69	scrutinized companies;
70	70	(2) the cost to this state of finding and contracting
71	71	with a vendor that is not a scrutinized company would be so
72	72	disproportionately high that the use of a vendor that is a
73	73	scrutinized company would be overwhelmingly in the best interest of
74	74	this state; or
75	75	(3) any goods or services that originate with a
76	76	scrutinized company and may be used in the performance of the
77	77	contract constitute a de minimis amount of the total value of the
78	78	goods and services provided under the contract and pose no risk to
79	79	the security of this state.
80	80	Sec. 2275.0203. VERIFICATION REQUIRED. (a) A vendor
81	81	submitting a bid for a contract relating to an information or
82	82	communications technology or service shall include in the bid a
83	83	written verification that the vendor:
84	84	(1) is not a scrutinized company;
85	85	(2) will not contract with a scrutinized company for
86	86	any aspect of its performance under the contract; and
87	87	(3) will not procure products or services from or that
88	88	originate with a scrutinized company for use in the performance of
89	89	the contract.
90	90	(b) A governmental entity may not enter into a contract
91	91	relating to an information or communications technology or service
92	92	with a vendor that fails to provide the verification required by
93	93	Subsection (a).
94	94	Sec. 2275.0204. FALSE VERIFICATION; VIOLATION. (a) A
95	95	governmental entity that determines that a vendor holding a
96	96	contract with the entity was ineligible to have the contract
97	97	awarded under Section 2275.0202 because the vendor's written
98	98	verification was false shall notify the vendor that the vendor is in
99	99	violation of this subchapter. The notice must include the basis for
100	100	the entity's determination that the vendor is in violation of this
101	101	subchapter.
102	102	(b) Not later than the 60th day after the date a vendor
103	103	receives a notice under Subsection (a), the vendor may provide a
104	104	written response to the governmental entity with evidence that the
105	105	vendor's verification was not false and that the vendor is not in
106	106	violation of this subchapter. If a vendor does not provide a
107	107	response in the manner provided by this subsection, the entity's
108	108	determination under Subsection (a) becomes a final determination.
109	109	(c) Not later than the 60th day after the date the
110	110	governmental entity receives a vendor's response as provided under
111	111	Subsection (b), the governmental entity shall review the response
112	112	and notify the vendor of the entity's final determination based on
113	113	the evidence provided by the vendor.
114	114	Sec. 2275.0205. CONTRACT TERMINATION FOR FALSE
115	115	VERIFICATION; BARRING FROM STATE CONTRACTS. (a) A governmental
116	116	entity, on making a final determination that a vendor violated this
117	117	subchapter, shall immediately terminate the contract without
118	118	further obligation to the vendor.
119	119	(b) A vendor that violates this subchapter is barred from
120	120	responding to a solicitation for or being awarded a contract for
121	121	goods or services by any governmental entity until the second
122	122	anniversary of the date the vendor receives a final determination
123	123	under Section 2275.0204.
124	124	Sec. 2275.0206. CIVIL PENALTY. (a) A vendor that violates
125	125	this subchapter is liable to the state for a civil penalty in an
126	126	amount equal to the greater of:
127	127	(1) twice the amount of the contract terminated under
128	128	Section 2275.0205; or
129	129	(2) the amount of loss suffered by the state from
130	130	terminating the contract.
131	131	(b) The attorney general may bring an action to recover a
132	132	civil penalty imposed under this section.
133	133	(c) The attorney general may recover reasonable attorney's
134	134	fees and court costs in bringing an action under this section.
135	135	SECTION 4. Subchapter B, Chapter 2275, Government Code, as
136	136	added by this Act, applies only to a contract for which the request
137	137	for bids or proposals or other applicable expression of interest is
138	138	made public on or after the effective date of this Act. A contract
139	139	for which the request for bids or proposals or other applicable
140	140	expression of interest is made public before that date is governed
141	141	by the law in effect on the date the request or other expression of
142	142	interest is made public, and the former law is continued in effect
143	143	for that purpose.
144	144	SECTION 5. This Act takes effect September 1, 2025.