89R10974 RDS-F
By: Parker, Campbell, Kolkhorst S.B. No. 2117
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the Texas Committee on Foreign
Investment to review certain transactions involving certain
foreign entities; creating a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 4, Government Code, is amended
by adding Chapter 426 to read as follows:
CHAPTER 426. TEXAS COMMITTEE ON FOREIGN INVESTMENT
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 426.001. DEFINITIONS. In this chapter:
(1) "Committee" means the Texas Committee on Foreign
Investment.
(2) "Covered transaction" means a foreign transaction
that is subject to this chapter in accordance with rules adopted
under Section 426.101.
(3) "Critical infrastructure" means infrastructure in
one of the following categories:
(A) chemical;
(B) commercial facilities;
(C) communications;
(D) critical manufacturing;
(E) dams;
(F) defense industrial bases;
(G) emergency services;
(H) energy;
(I) financial services;
(J) food and agriculture;
(K) government facilities;
(L) health care and public health;
(M) information technology;
(N) nuclear reactors, materials, and waste;
(O) transportation systems; or
(P) water and wastewater systems.
(4) "Foreign entity" means:
(A) a person who is not:
(i) a citizen or national of the United
States; or
(ii) an alien who is lawfully admitted for
permanent residence in the United States under the federal
Immigration and Nationality Act (8 U.S.C. Section 1101 et seq.);
(B) a foreign government; or
(C) a business entity:
(i) organized in a foreign country or under
the laws of a foreign government;
(ii) that has its principal place of
business in a foreign country; or
(iii) controlled by an entity described by
this subdivision.
(5) "Foreign transaction" means a merger,
acquisition, lease, sale, or other transfer by or to a foreign
entity of the direct or indirect control of or an interest in a
business, real property, or other asset located in this state.
(6) "Sensitive personal data" means information,
including health, financial, or biometric information, that may
pose a threat to public safety if obtained by a foreign entity,
including by exploiting the information to cause harm or coerce an
individual to perform an act on behalf of the entity.
Sec. 426.002. APPLICABILITY. This chapter does not apply
to a transaction governed exclusively by federal law, including an
international agreement between the United States and a foreign
nation.
SUBCHAPTER B. TEXAS COMMITTEE ON FOREIGN INVESTMENT
Sec. 426.051. COMMITTEE; MEMBERSHIP. (a) The Texas
Committee on Foreign Investment is established to facilitate the
review of certain foreign transactions as provided by this chapter.
(b) The committee is composed of the following members:
(1) a representative from the office of the governor
appointed by the governor, who shall serve as chair;
(2) the following officers or their designees:
(A) the attorney general;
(B) the land commissioner;
(C) the comptroller; and
(D) the commissioner of agriculture; and
(3) the heads of the following agencies or their
designees:
(A) the Department of Public Safety;
(B) the Public Utility Commission;
(C) the Department of Information Resources, or
its successor in functions relating to cybersecurity; and
(D) the Railroad Commission of Texas.
SUBCHAPTER C. REVIEW OF CERTAIN TRANSACTIONS
Sec. 426.101. FOREIGN TRANSACTIONS SUBJECT TO REVIEW;
PUBLICATION OF CRITERIA. (a) The governor, in consultation with
the committee, shall by rule adopt criteria for determining whether
a foreign transaction is subject to this chapter. The criteria must
provide that a foreign transaction is subject to this chapter if the
transaction:
(1) exceeds the minimum dollar value or the minimum
ownership percentage as determined by the governor; and
(2) affects at least one of the following concerns:
(A) critical infrastructure in this state;
(B) agricultural land in this state;
(C) sensitive personal data of residents of this
state; or
(D) a strategic industry or asset identified by
the governor, in consultation with the committee.
(b) The governor, in consultation with the committee, may by
rule exempt certain transactions from the requirements of this
chapter.
(c) As soon as practicable after adopting the criteria under
Subsection (a) or an exemption under Subsection (b), the governor
shall submit to the secretary of state the criteria and exemptions
adopted under this section and the secretary of state shall publish
and maintain the information on the secretary of state's Internet
website.
Sec. 426.102. NOTICE; REVIEW; REPORT TO COMMITTEE. (a) A
person who intends to enter into a covered transaction shall, not
later than the 90th day before the date of the closing or other
settlement of the transaction, notify the attorney general in the
form and manner prescribed by the attorney general.
(b) Not later than the 30th day after the date the attorney
general receives notice under Subsection (a), the attorney general
shall complete an initial review of the information provided in the
notice and determine whether further investigation is warranted. If
the attorney general determines that further investigation is
warranted, the attorney general shall conduct a secondary
investigation. The attorney general shall conclude a secondary
investigation not later than the 45th day after the date the
attorney general concludes the initial review.
(c) On completion of an initial review and, if applicable,
secondary investigation under Subsection (b), the attorney general
shall submit a report containing the results of the review and
investigation to the committee.
Sec. 426.103. MITIGATION AGREEMENT. (a) If the attorney
general determines that a mitigation agreement is necessary to
protect the state's interests, the attorney general shall, as soon
as practicable after submitting the report under Section 426.102,
submit a proposed mitigation agreement to the committee. The
agreement must address concerns raised in the report and may
require a party to a covered transaction to comply with certain
requirements proposed by the attorney general, including:
(1) data protection protocols;
(2) security clearance requirements;
(3) restrictions on access by foreign entities to
assets that are a part of a covered transaction; and
(4) compliance reporting.
(b) On receipt of the mitigation agreement from the attorney
general, the committee shall adopt or reject the agreement.
(c) If the committee adopts the mitigation agreement, the
committee shall deliver the agreement to each party to the covered
transaction.
(d) If the committee rejects the mitigation agreement, the
attorney general shall prepare a new mitigation agreement that
addresses the committee's concerns with the initial agreement.
(e) The committee shall adopt rules providing procedures to
implement this section.
Sec. 426.104. VIOLATION. A person violates this chapter
if:
(1) the attorney general determines that a covered
transaction involving the person requires a mitigation agreement;
and
(2) the person:
(A) executes a covered transaction without
entering into a mitigation agreement; or
(B) violates a provision of a mitigation
agreement.
Sec. 426.105. CONFIDENTIALITY. Notwithstanding any other
law, information the committee obtains during a review under
Section 426.102 or includes in a mitigation agreement under Section
426.103 is confidential and excepted from disclosure under Chapter
552. The information may be used in a proceeding under Subchapter D
at the attorney general's discretion.
SUBCHAPTER D. ENFORCEMENT
Sec. 426.151. CIVIL PENALTY; INJUNCTION. (a) A person who
violates this chapter is liable to the state for a civil penalty in
an amount not to exceed $50,000 for each violation.
(b) The attorney general may bring an action to:
(1) recover the civil penalty imposed under Subsection
(a); and
(2) restrain or enjoin a person from violating this
chapter, including by requiring a person to divest of an interest
that is the subject of a mitigation agreement.
(c) The attorney general may recover reasonable attorney's
fees and other reasonable expenses incurred in bringing an action
under this section.
Sec. 426.152. VENUE. Notwithstanding any other law, the
attorney general may bring an action under this chapter in the
county where all or a substantial part of the assets that are the
subject of the covered transaction are located.
SUBCHAPTER E. ANNUAL REPORT
Sec. 426.201. ANNUAL REPORT. Not later than September 1 of
each year, the committee shall prepare and submit to the governor,
lieutenant governor, and speaker of the house of representatives a
report that includes:
(1) the number of transactions reviewed by the
attorney general during the preceding fiscal year;
(2) an analysis of the measures imposed by the
committee in mitigation agreements entered into under this chapter;
and
(3) a summary of recommendations for legislative
changes the committee considers appropriate to promote state and
national security.
SECTION 2. Not later than December 1, 2025, the governor, in
consultation with the Texas Committee on Foreign Investment, shall
adopt criteria under Section 426.101, Government Code, as added by
this Act.
SECTION 3. Chapter 426, Government Code, as added by this
Act, applies only to a transaction governed by a contract entered
into on or after January 1, 2026.
SECTION 4. This Act takes effect September 1, 2025.