Bill Text: TX HB129 | 2025-2026 | 89th Legislature | Engrossed
Bill Title: Relating to a prohibition on certain governmental contracts with foreign adversary companies and federally banned companies; authorizing a civil penalty.
Sponsorship: Partisan Bill (Republican 24-1)
Status: (Engrossed - Dead) 2025-05-09 - Referred to State Affairs [HB129 Detail]
Download: Texas-2025-HB129-Engrossed.html
| 89R24407 CXP-F | ||
| By: McQueeney, Raymond, Harris, Metcalf, | H.B. No. 129 | |
| Barry, et al. | ||
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| relating to a prohibition on certain governmental contracts with | ||
| foreign adversary companies and federally banned companies; | ||
| 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 CONTRACTS WITH FOREIGN ADVERSARY | ||
| COMPANIES AND FEDERALLY BANNED COMPANIES | ||
| Sec. 2278.001. DEFINITIONS. In this chapter: | ||
| (1) "Company" has the meaning assigned by Section | ||
| 117.001, Business & Commerce Code. | ||
| (2) "Federally banned company" means a company: | ||
| (A) that produces or provides communications | ||
| equipment or services listed on the covered list published by the | ||
| Public Safety and Homeland Security Bureau of the Federal | ||
| Communications Commission, as required by 47 C.F.R. Section | ||
| 1.50002; | ||
| (B) listed in Supplement No. 4 to 15 C.F.R. Part | ||
| 744; | ||
| (C) prohibited from participating in federal | ||
| contracts under Section 889, John S. McCain National Defense | ||
| Authorization Act for Fiscal Year 2019 (Pub. L. No. 115-232); | ||
| (D) identified as a Chinese military company by | ||
| the United States Department of Defense in accordance with Section | ||
| 1260H, William M. (Mac) Thornberry National Defense Authorization | ||
| Act for Fiscal Year 2021 (Pub. L. No. 116-283); | ||
| (E) prohibited from participating in federal | ||
| contracts under Section 5949, James M. Inhofe National Defense | ||
| Authorization Act for Fiscal Year 2023 (Pub. L. No. 117-263); | ||
| (F) subject to economic and trade sanctions | ||
| administered by the Office of Foreign Assets Control of the United | ||
| States Department of the Treasury; | ||
| (G) subject to an order issued by the Federal | ||
| Acquisition Security Council under the Federal Acquisition Supply | ||
| Chain Security Act of 2018 (Title II, Pub. L. No. 115-390); or | ||
| (H) restricted under any similar sanction | ||
| program under federal law. | ||
| (3) "Foreign adversary" means: | ||
| (A) the People's Republic of China, including the | ||
| Hong Kong special administrative region; | ||
| (B) the Republic of Cuba; | ||
| (C) the Islamic Republic of Iran; | ||
| (D) the Democratic People's Republic of Korea; | ||
| (E) the Russian Federation; | ||
| (F) the Syrian Arab Republic; | ||
| (G) the Venezuelan regime under Nicolás Maduro; | ||
| or | ||
| (H) an agent or entity under significant control | ||
| of a country described by Paragraphs (A) through (G). | ||
| (4) "Foreign adversary company": | ||
| (A) means a company that: | ||
| (i) is domiciled, incorporated, | ||
| headquartered, issued, or listed in a foreign adversary; | ||
| (ii) has its principal place of business in | ||
| a foreign adversary; | ||
| (iii) is controlled by the government, | ||
| military, or ruling political party of a foreign adversary; or | ||
| (iv) is majority owned by an entity | ||
| described by Subparagraph (i), (ii), or (iii); and | ||
| (B) does not include: | ||
| (i) a United States citizen; | ||
| (ii) a U.S. subsidiary, as defined by 15 | ||
| C.F.R. Section 772.1; or | ||
| (iii) a parent company not described by | ||
| Paragraph (A) that derives not more than 50 percent of the company's | ||
| total annual global revenue from subsidiaries from a foreign | ||
| adversary, regardless of whether the subsidiaries are companies | ||
| described by Paragraph (A). | ||
| (5) "Governmental entity" has the meaning assigned by | ||
| Section 2251.001. | ||
| Sec. 2278.002. PROHIBITED CONTRACTS; EXCEPTION. (a) | ||
| Except as provided by Subsection (b), a foreign adversary company | ||
| or a federally banned company may not submit a bid for a contract or | ||
| enter into a contract with a governmental entity relating to goods | ||
| or services. For purposes of this section, a company is considered | ||
| a foreign adversary company if the company enters into a contract | ||
| with a governmental entity to sell to the entity any final products | ||
| or services produced by a foreign adversary company or a federally | ||
| banned company. | ||
| (b) A governmental entity may enter into a contract with a | ||
| company described by Subsection (a) if: | ||
| (1) there is no other reasonable option for procuring | ||
| the good or service; | ||
| (2) the entity preapproves the contract; and | ||
| (3) failure to procure the good or service would pose a | ||
| greater threat to this state than the threat associated with | ||
| procuring the good or service. | ||
| Sec. 2278.003. CERTIFICATION REQUIRED. A governmental | ||
| entity shall require a vendor submitting a bid for a contract | ||
| relating to goods or services to include in the bid a written | ||
| certification that the vendor is not prohibited from submitting the | ||
| bid or entering into the contract under Section 2278.002(a). | ||
| Sec. 2278.004. FALSE CERTIFICATION; VIOLATION. (a) A | ||
| governmental entity that determines that a vendor holding a | ||
| contract with the entity was ineligible to have the contract | ||
| awarded under Section 2278.002(a) because the vendor's | ||
| certification submitted under Section 2278.003 was false shall | ||
| notify the vendor that the vendor is in violation of this chapter. | ||
| The notice must include the basis for the entity's determination | ||
| that the vendor is in violation of this chapter. | ||
| (b) A governmental entity, on making a final determination | ||
| that a vendor violated this chapter, shall refer the matter to the | ||
| attorney general for enforcement under Section 2278.006. | ||
| Sec. 2278.005. CONTRACT TERMINATION FOR FALSE | ||
| CERTIFICATION; BARRING FROM STATE CONTRACTS. (a) A governmental | ||
| entity, on making a final determination that a vendor violated this | ||
| chapter, shall immediately terminate the contract without further | ||
| obligation to the vendor. | ||
| (b) On receiving notice from a governmental entity of a | ||
| contract termination under Subsection (a) because a vendor violated | ||
| this chapter, the comptroller may bar the vendor from participating | ||
| in state contracts using procedures prescribed under Section | ||
| 2155.077. | ||
| (c) Debarment under this section expires on the fifth | ||
| anniversary of the date of the debarment under Subsection (b). | ||
| Sec. 2278.006. CIVIL PENALTY. (a) A vendor that violates | ||
| this chapter is liable to the state for a civil penalty in an amount | ||
| equal to the greater of: | ||
| (1) twice the amount of the contract terminated under | ||
| Section 2278.005; or | ||
| (2) $250,000. | ||
| (b) The attorney general may bring an action to recover a | ||
| civil penalty imposed under this section. | ||
| SECTION 2. Chapter 2278, Government Code, as added by this | ||
| Act, applies only to a contract for which the request for bids or | ||
| proposals or other applicable expression of interest is made public | ||
| on or after the effective date of this Act. A contract for which the | ||
| request for bids or proposals or other applicable expression of | ||
| interest is made public before that date is governed by the law in | ||
| effect on the date the request or other expression of interest is | ||
| made public, and the former law is continued in effect for that | ||
| purpose. | ||
| SECTION 3. This Act takes effect September 1, 2025. | ||
