Bill Text: TX SB1189 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to state contracts with and investments in certain companies doing business in the Russian Federation.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-09 - Referred to State Affairs [SB1189 Detail]

Download: Texas-2023-SB1189-Introduced.html

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88R323 RDS-F
By: Parker S.B. No. 1189

A BILL TO BE ENTITLED
AN ACT
relating to state contracts with and investments in certain
companies doing business in the Russian Federation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2270.0001(9), Government Code, is
amended to read as follows:
(9) "Scrutinized company" means:
(A) a company that:
(i) engages in scrutinized business
operations described by Section 2270.0052; or
(ii) has been complicit in the Darfur
genocide during any preceding 20-month period;
(B) a company that engages in scrutinized
business operations described by Section 2270.0102; [and]
(C) a company that engages in scrutinized
business operations described by Section 2270.0152; and
(D) a company that engages in scrutinized
business operations described by Section 2270.0162.
SECTION 2. Section 2270.0002, Government Code, is amended
to read as follows:
Sec. 2270.0002. EXCEPTION. Notwithstanding any other law,
a company that the United States government affirmatively declares
to be excluded from its federal sanctions regime relating to Sudan,
its federal sanctions regime relating to Iran, [or] any federal
sanctions regime relating to a designated foreign terrorist
organization, or its federal sanctions regime relating to the
Russian Federation is not subject to divestment or investment
prohibition under this chapter.
SECTION 3. Chapter 2270, Government Code, is amended by
adding Subchapter D-1 to read as follows:
SUBCHAPTER D-1. GENERAL PROVISIONS RELATING TO INVESTMENTS IN
RUSSIAN FEDERATION
Sec. 2270.0161. DEFINITIONS. In this subchapter:
(1) "Business operations" means engaging in commerce
in any form in the Russian Federation, including by acquiring,
developing, maintaining, owning, selling, possessing, leasing, or
operating equipment, facilities, personnel, products, services,
personal property, real property, or any other apparatus of
business or commerce.
(2) "Military equipment" means weapons, arms,
military supplies, and equipment that readily may be used for
military purposes, including radar systems and military-grade
transport vehicles.
Sec. 2270.0162. SCRUTINIZED BUSINESS OPERATIONS IN RUSSIAN
FEDERATION. A company engages in scrutinized business operations
in the Russian Federation if:
(1) the company has business operations that involve
contracts with or providing supplies or services to the government
of the Russian Federation, a company in which the government of the
Russian Federation has any direct or indirect equity share, a
consortium or project commissioned by the government of the Russian
Federation, or a company involved in a consortium or project
commissioned by the government of the Russian Federation; or
(2) the company supplies military equipment to the
Russian Federation.
SECTION 4. Sections 2270.0201(a) and (b), Government Code,
are amended to read as follows:
(a) The comptroller shall prepare and maintain a list of all
scrutinized companies. The list must be categorized according to:
(1) companies that are scrutinized companies under
Section 2270.0001(9)(A);
(2) companies that are scrutinized companies under
Section 2270.0001(9)(B); [and]
(3) companies that are scrutinized companies under
Section 2270.0001(9)(C); and
(4) companies that are scrutinized companies under
Section 2270.0001(9)(D).
(b) In maintaining the list of scrutinized companies under
Subsection (a), the comptroller may review and rely, as appropriate
in the comptroller's judgment, on publicly available information
regarding companies with business operations in Sudan, in Iran,
[or] with designated foreign terrorist organizations, or in the
Russian Federation, as applicable, including information provided
by the state, nonprofit organizations, research firms,
international organizations, and governmental entities.
SECTION 5. Section 2270.0203, Government Code, is amended
to read as follows:
Sec. 2270.0203. NOTICE TO LISTED COMPANY ENGAGED IN
INACTIVE BUSINESS OPERATIONS. For each listed company identified
under Section 2270.0202 that is engaged in only inactive
scrutinized business operations, the investing entity shall send a
written notice informing the company of this chapter and
encouraging the company to continue to refrain from initiating
active business operations in Sudan, in Iran, [and] with designated
foreign terrorist organizations, and in the Russian Federation
until it is able to avoid being considered a listed company. The
investing entity shall continue the correspondence as the entity
considers necessary, but is not required to initiate correspondence
more often than semiannually.
SECTION 6. Section 2270.0204(b), Government Code, is
amended to read as follows:
(b) The notice shall offer the company the opportunity to
clarify its Sudan-related, Iran-related, [or] designated foreign
terrorist organization-related, or Russian Federation-related
activities, as applicable, and shall encourage the company, not
later than the 90th day after the date the company receives notice
under this section, to either cease all scrutinized business
operations as described by Sections 2270.0052, 2270.0102, [and]
2270.0152, and 2270.0162, or convert such operations to inactive
business operations in order to avoid qualifying for divestment by
investing entities.
SECTION 7. Subtitle F, Title 10, Government Code, is
amended by adding Chapter 2278 to read as follows:
CHAPTER 2278. PROHIBITION ON CONTRACTS WITH CERTAIN COMPANIES
ENGAGING IN SCRUTINIZED BUSINESS OPERATIONS IN RUSSIAN FEDERATION
Sec. 2278.001. DEFINITIONS. In this chapter:
(1) "Company" has the meaning assigned by Section
2270.0001, Government Code, except that the term does not include a
sole proprietorship.
(2) "Governmental entity" has the meaning assigned by
Section 2251.001.
Sec. 2278.002. PROVISION REQUIRED IN CONTRACT. (a) This
section applies only to a contract that:
(1) is between a governmental entity and a company
with 10 or more full-time employees; and
(2) has a value of $100,000 or more that is to be paid
wholly or partly from public funds of the governmental entity.
(b) Except as provided by Subsection (c), a governmental
entity may not enter into a contract with a company for goods or
services unless the contract contains a written verification from
the company that it:
(1) does not engage in scrutinized business operations
described by Section 2270.0162; and
(2) will not engage in scrutinized business operations
described by Section 2270.0162 during the term of the contract.
(c) Subsection (b) does not apply to a governmental entity
that determines the requirements of Subsection (b) are inconsistent
with the governmental entity's constitutional or statutory duties
related to the issuance, incurrence, or management of debt
obligations or the deposit, custody, management, borrowing, or
investment of funds.
SECTION 8. Not later than the 180th day after the effective
date of this Act, the comptroller of public accounts shall include
the companies described by Section 2270.0201(a)(4), Government
Code, as added by this Act, on the list under Section 2270.0201(a),
Government Code.
SECTION 9. Chapter 2278, 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 that
date 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 10. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2023.