89R610 RDS-D

By: Tepper H.B. No. 1308

A BILL TO BE ENTITLED

AN ACT

relating to employment practices of governmental entities, state contractors, and private employers in this state regarding the legal status of employees, including requiring participation in the federal electronic verification of employment authorization program, or E-verify program, and authorizing the suspension of certain licenses held by private employers for certain conduct in relation to the employment of persons not lawfully present.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Chapter 2264, Government Code, is amended to read as follows:

CHAPTER 2264. CERTAIN RESTRICTIONS ON [USE OF CERTAIN] PUBLIC

SUBSIDIES AND STATE CONTRACTS

SECTION 2. Section 2264.101, Government Code, is transferred to Subchapter B, Chapter 2264, Government Code, redesignated as Section 2264.054, Government Code, and amended to read as follows:

Sec. 2264.054 [2264.101]. RECOVERY. (a) A public agency, local taxing jurisdiction, or economic development corporation, or the attorney general on behalf of the state or a state agency, may bring a civil action to recover any amounts owed to the public agency, state or local taxing jurisdiction, or economic development corporation under this subchapter [chapter].

(b) The public agency, local taxing jurisdiction, economic development corporation, or attorney general, as applicable, shall recover court costs and reasonable attorney's fees incurred in an action brought under Subsection (a).

(c) A business is not liable for a violation of this subchapter [chapter] by a subsidiary, affiliate, or franchisee of the business, or by a person with whom the business contracts.

SECTION 3. The heading to Subchapter C, Chapter 2264, Government Code, is amended to read as follows:

SUBCHAPTER C. E-VERIFY PROGRAM [ENFORCEMENT]

SECTION 4. Subchapter C, Chapter 2264, Government Code, is amended by adding Sections 2264.1011, 2264.102, and 2264.103 to read as follows:

Sec. 2264.1011. DEFINITIONS. In this subchapter:

(1) "E-verify program" has the meaning assigned by Section 673.001.

(2) "State agency" has the meaning assigned by Section 2103.001.

Sec. 2264.102. VERIFICATION BY CONTRACTORS. (a) Except as provided by Subsection (b), a state agency may not award a contract for goods or services within this state to a contractor unless the contractor and any subcontractor register with and participate in the E-verify program to verify employee information. The contractor and any subcontractor must continue to participate in the program during the term of the contract.

(b) This section does not apply to a contract for goods or services:

(1) a state agency determines is necessary to the operation of the agency; and

(2) for which the agency can find no reasonable alternative to a bid submitted by a contractor that does not participate in the E-verify program or require its subcontractors to participate in the E-verify program.

(c) Each contract with a state agency must include the following statement:

"The contractor certifies that the contractor is not ineligible to receive this contract under Subchapter C, Chapter 2264, Government Code, and acknowledges that if this certification is inaccurate or becomes inaccurate during the term of the contract, the contractor may be barred from participating in state contracts."

(d) If a state agency determines that a contractor was ineligible to have the contract awarded under Subsection (a), that a contractor has ceased participation in the E-verify program during the term of the contract, or that a subcontractor is not registered with or is not participating in the E-verify program, the state agency shall refer the matter to the comptroller for action.

(e) Each state agency shall develop procedures for the administration of this section.

Sec. 2264.103. BARRING FROM STATE CONTRACTS. (a) Using procedures prescribed under Section 2155.077, the comptroller may bar a contractor from participating in state contracts if the comptroller determines that the contractor was awarded a contract in violation of Section 2264.102 or, in violation of Section 2264.102:

(1) has ceased participation in the E-verify program during the term of the contract; or

(2) knowingly hired a subcontractor, other than a subcontractor who acts exclusively as a supplier for the contract, to perform work under the contract who is not registered with or is not participating in the E-verify program.

(b) Debarment under this section is for a period of one year except that the debarment may be extended by the comptroller for additional one-year periods if the comptroller determines that the grounds for debarment under this section continue to exist.

(c) It is an affirmative defense to a debarment proceeding under this section that the contractor did not know that a subcontractor hired to perform work under the contract is not registered with or is not participating in the E-verify program.

SECTION 5. Subtitle A, Title 6, Government Code, is amended by adding Chapter 621 to read as follows:

CHAPTER 621. VERIFICATION OF EMPLOYEE INFORMATION; EMPLOYMENT OF

PERSONS NOT LAWFULLY PRESENT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 621.001. DEFINITIONS. In this chapter:

(1) "E-verify program" has the meaning assigned by Section 673.001.

(2) "Governmental entity" has the meaning assigned by Section 620.001, except that the term includes a school district or open-enrollment charter school.

(3) "Person not lawfully present" means a person who, at the time of employment, is not:

(A) a citizen or national of the United States; or

(B) 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.) or authorized to be employed by that Act or by the United States attorney general.

SUBCHAPTER B. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 621.051. E-VERIFY PROGRAM. (a) A governmental entity shall register and participate in the E-verify program to verify information of all new employees.

(b) This section may not be construed as limiting a requirement imposed on a state agency under Chapter 673.

SUBCHAPTER C. EMPLOYMENT OF PERSONS NOT LAWFULLY PRESENT

Sec. 621.101. PROHIBITED EMPLOYMENT. A governmental entity may not knowingly hire, employ, recruit, or refer for a fee a person not lawfully present.

SUBCHAPTER D. ENFORCEMENT

Sec. 621.151. REPORTING VIOLATION. (a) A person who has a reasonable belief that a governmental entity violated this chapter may report the allegation to the attorney general.

(b) The person alleging a violation under Subsection (a) must, to the extent known by the person, provide to the attorney general:

(1) the name, address, and telephone number of the person filing the report;

(2) the name and address of the governmental entity;

(3) if applicable, the name of the person alleged to be a person not lawfully present who has performed or will perform work for the governmental entity;

(4) the information that caused the person to make the report and the source of the information; and

(5) any other information relevant to the allegation.

Sec. 621.152. INVESTIGATION. (a) On receipt of a report made under Section 621.151, the attorney general shall determine whether reasonable cause exists to merit an investigation of the allegation. If the attorney general determines reasonable cause exists, the attorney general shall conduct an investigation.

(b) A governmental entity must comply with reasonable requests for documents or other information made by the attorney general during an investigation conducted under this section, including a request for:

(1) documents related to the legal status of an employee;

(2) if applicable, evidence related to the entity's affirmative defense under Section 621.153;

(3) documents related to the entity's finances and operations; or

(4) other documents or information the attorney general determines necessary for conducting the investigation.

(c) The attorney general may request the assistance of the Department of Public Safety and local law enforcement entities to ensure compliance with this section.

(d) In conducting an investigation under this section, the attorney general may not interview a minor or collect information related to a minor without first obtaining consent from the minor's parent or legal guardian.

(e) Information the attorney general obtains during an investigation under this section is confidential and excepted from disclosure under Chapter 552 but may be used in an administrative proceeding under this chapter at the attorney general's discretion.

Sec. 621.153. AFFIRMATIVE DEFENSE. It is an affirmative defense to a proceeding under this subchapter in relation to an alleged violation of Subchapter C that the governmental entity complied in good faith with the document review requirements described by the federal Immigration Reform and Control Act of 1986 (8 U.S.C. Section 1324a(b)).

Sec. 621.154. DETERMINATION BY ATTORNEY GENERAL; OPPORTUNITY TO CURE. (a) If the attorney general determines under Section 621.152 that a governmental entity violated this chapter, the attorney general shall provide written notice of the determination to the entity. The notice must explain the governmental entity's options for taking corrective action to cure the violation, which must include:

(1) for a violation under Section 621.051, submitting to the attorney general evidence that the entity has registered and is participating in the E-verify program to verify information of all new employees; or

(2) for a violation under Section 621.101, submitting to the attorney general, as applicable:

(A) evidence that the person not lawfully present is no longer employed by or working for the entity; or

(B) a sworn statement attesting that the entity has ceased and will continue to cease recruiting or referring for a fee persons not lawfully present.

(b) On receipt of notice from the attorney general under Subsection (a), the governmental entity shall take appropriate corrective action to cure the violation. Not later than the 10th business day after the date the governmental entity receives the notice, the entity must notify the attorney general of the corrective action taken by the entity to cure the violation.

(c) If the attorney general determines that the governmental entity has taken appropriate corrective action under Subsection (b), the attorney general shall close the investigation and promptly notify the entity accordingly.

Sec. 621.155. STATE GRANT FUNDING ELIGIBILITY. (a) A governmental entity is ineligible to receive grant funding from this state if:

(1) the entity fails to reply to the attorney general's notice under Section 621.154; or

(2) the attorney general determines that the corrective action taken by the entity under that section did not cure the entity's violation.

(b) The attorney general shall provide to a governmental entity described by Subsection (a) written notice, as applicable, that:

(1) the entity:

(A) is in violation of this chapter;

(B) is ineligible to receive grant funding from this state; and

(C) may take appropriate corrective action to cure the violation and become eligible to receive state grant funding; or

(2) the entity:

(A) has failed to reply to the attorney general's notice under Section 621.154;

(B) is ineligible to receive grant funding from the state; and

(C) may reply to the notice and become eligible to receive state grant funding.

Sec. 621.156. COMPTROLLER RECORDS. (a) The comptroller shall maintain a list of governmental entities identified by the attorney general under Subsection (b) for purposes of ensuring that an entity included in the list does not receive grant funding from this state.

(b) At the time the attorney general sends notice to a governmental entity under Section 621.155(b), the attorney general shall provide to the comptroller the identity of the entity for inclusion in the list the comptroller maintains under Subsection (a).

(c) Information provided to the comptroller by the attorney general under this section is confidential and excepted from disclosure under Chapter 552.

Sec. 621.157. REINSTATEMENT OF GRANT ELIGIBILITY. (a) A governmental entity may request that the attorney general reinstate the entity's eligibility to receive grant funding from this state by notifying the attorney general, as appropriate, of:

(1) corrective action taken by the entity to cure the violation; or

(2) the entity's reply to the attorney general's notice under Section 621.154.

(b) If the attorney general determines that the corrective action taken by the governmental entity cured the violation or that the entity's reply is responsive to the notice, as appropriate, the entity becomes eligible to receive grant funding from this state.

(c) At the time the attorney general makes a determination under Subsection (b), the attorney general shall instruct the comptroller to remove the governmental entity from the list the comptroller maintains under Section 621.156, and the comptroller shall remove the entity from the list.

SECTION 6. Subtitle B, Title 2, Labor Code, is amended by adding Chapter 53 to read as follows:

CHAPTER 53. VERIFICATION OF EMPLOYEE INFORMATION; EMPLOYMENT OF

PERSONS NOT LAWFULLY PRESENT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 53.001. DEFINITIONS. In this chapter:

(1) "Employee" means an individual who is employed by an employer for compensation. The term includes an individual employed on a part-time basis.

(2) "Employer" means a person, other than a governmental entity, who:

(A) employs at least 25 employees; or

(B) acts directly or indirectly in the interests of an employer in relation to an employee.

(3) "E-verify program" has the meaning assigned by Section 673.001, Government Code.

(4) "License" means a license, certificate, registration, permit, or other authorization that:

(A) is issued by a licensing authority;

(B) is subject before expiration to renewal, suspension, revocation, forfeiture, or termination by a licensing authority; and

(C) is required for a person to practice or engage in a particular business, occupation, or profession.

(5) "Licensing authority" means a department, commission, board, office, or other agency of this state that issues or renews a license.

(6) "Person not lawfully present" means a person who, at the time of employment, is not:

(A) a citizen or national of the United States; or

(B) 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.) or authorized to be employed by that Act or by the United States attorney general.

Sec. 53.002. EMPLOYEE STATUS. An employer may not classify an individual performing services for the employer as an independent contractor instead of as an employee of the employer solely for the purpose of avoiding the requirements applicable to an employer under this chapter.

SUBCHAPTER B. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 53.051. VERIFICATION. An employer shall register and participate in the E-verify program to verify information of all new employees.

SUBCHAPTER C. EMPLOYMENT OF PERSONS NOT LAWFULLY PRESENT

Sec. 53.101. PROHIBITED EMPLOYMENT. An employer may not knowingly hire, employ, recruit, or refer for a fee an individual who is a person not lawfully present.

SUBCHAPTER D. ENFORCEMENT

Sec. 53.151. REPORTING VIOLATION. (a) A person who has a reasonable belief that an employer violated this chapter may report the allegation to the attorney general.

(b) The person alleging a violation under Subsection (a) must, to the extent known by the person, provide to the attorney general:

(1) the name, address, and telephone number of the person filing the report;

(2) the name and address of the employer;

(3) if applicable, the name of the person not lawfully present who has performed or will perform work for the employer;

(4) the information that caused the person to make the report and the source of the information; and

(5) any other information relevant to the allegation.

Sec. 53.152. INVESTIGATION BY ATTORNEY GENERAL. (a) On receipt of a report made under Section 53.151, the attorney general shall determine whether reasonable cause exists to merit an investigation of the allegation. If the attorney general determines reasonable cause exists, the attorney general shall conduct an investigation.

(b) An employer must comply with reasonable requests for documents or other information made by the attorney general during an investigation, including a request for:

(1) documents related to the legal status of an employee;

(2) if applicable, evidence related to an employer's affirmative defense under Section 53.153;

(3) documents related to the employer's finances and operations;

(4) a list of all licenses held by the employer; and

(5) other documents or information the attorney general determines necessary for conducting the investigation.

(c) The attorney general may request the assistance of the Department of Public Safety and local law enforcement entities to ensure compliance with this section.

(d) In conducting an investigation under this section, the attorney general may not:

(1) interview a minor or collect information related to a minor without first obtaining consent from the minor's parent or legal guardian; or

(2) visit the employer's premises at an unreasonable time without obtaining the employer's consent.

(e) Information obtained during an investigation under this section is confidential and excepted from disclosure under Chapter 552, but may be used in an administrative proceeding under this chapter at the attorney general's discretion.

Sec. 53.153. AFFIRMATIVE DEFENSE. It is an affirmative defense to a proceeding under this subchapter in relation to an alleged violation of Subchapter C that the employer complied in good faith with the document review requirements described by the federal Immigration Reform and Control Act of 1986 (8 U.S.C. Section 1324a(b)).

Sec. 53.154. INITIAL DETERMINATION BY ATTORNEY GENERAL; OPPORTUNITY TO CURE. (a) If the attorney general determines under Section 53.152 that the employer violated this chapter, the attorney general shall provide written notice of the determination to the employer. The notice must:

(1) explain the employer's options for taking corrective action to cure the violation, which must include:

(A) for a violation under Section 53.002, submitting to the attorney general evidence that the employer is properly classifying individuals performing services for the employer, together with a sworn statement attesting that the employer will continue to do so;

(B) for a violation under Section 53.051, submitting to the attorney general evidence that the employer has registered and is participating in the E-verify program to verify information of all new employees; or

(C) for a violation under Section 53.101, submitting to the attorney general, as applicable:

(i) evidence that the person not lawfully present is no longer employed by or working for the employer; or

(ii) a sworn statement attesting that the employer has ceased and will continue to cease recruiting or referring for a fee persons not lawfully present; and

(2) inform the employer that each license held by the employer is subject to suspension if the employer does not take appropriate corrective action and notify the attorney general of that action in the time prescribed by Subsection (b).

(b) On receipt of notice from the attorney general under Subsection (a), the employer shall take appropriate corrective action to cure the violation. Not later than the 10th business day after the date the employer receives the notice, the employer must notify the attorney general of the corrective action taken by the employer to cure the violation.

Sec. 53.155. FINAL DETERMINATION BY ATTORNEY GENERAL; LICENSE SUSPENSION FOR FAILURE TO CURE; RIGHT TO JUDICIAL REVIEW. (a) If the attorney general determines that an employer has taken appropriate corrective action under Section 53.154(b), the attorney general shall close the investigation and promptly notify the employer accordingly.

(b) If the attorney general determines that an employer failed to reply to the attorney general's notice under Section 53.154(b) or that the corrective action taken by the employer under that subsection did not cure the employer's violation, the attorney general shall promptly provide written notice to the employer that:

(1) the employer has been finally determined by the attorney general to have violated this chapter; and

(2) each license issued to the employer by a licensing authority will be suspended for a period of two years, subject to judicial review of the attorney general's determination as a contested case under Chapter 2001, Government Code.

(c) Not later than the 30th day after the date an employer receives notice under Subsection (b), an employer may seek judicial review as provided by Chapter 2001, Government Code, of the attorney general's determination.

Sec. 53.156. ORDER FOR LICENSE SUSPENSION. If an employer finally determined by the attorney general to have violated this chapter does not seek judicial review of the attorney general's determination in the time prescribed by Section 53.155 or does not prevail on judicial review, the attorney general shall promptly:

(1) render a final order suspending each license held by the employer for a period of two years; and

(2) send a copy of the order to:

(A) the employer; and

(B) each licensing authority that issued a license held by the employer.

Sec. 53.157. ACTION BY LICENSING AUTHORITY. (a) On receipt from the attorney general of a final order under this chapter suspending an employer's license, a licensing authority shall immediately determine if the authority has issued a license to the person named on the order and, if a license has been issued:

(1) record the suspension of the license in the licensing authority's records;

(2) report the suspension as appropriate;

(3) provide written notice of the suspension to the person; and

(4) demand surrender of the suspended license if required by law for other cases in which a license is suspended.

(b) A licensing authority shall implement the terms of a final order suspending a license without additional review or hearing. The authority may provide notice as appropriate to the license holder or to others concerned with the license.

(c) A licensing authority may not modify, remand, reverse, vacate, or stay an order suspending a license issued under this chapter and may not review, vacate, or reconsider the terms of a final order suspending a license.

(d) A person who is the subject of a final order suspending a license is not entitled to a refund for any fee or other amount paid to the licensing authority.

(e) A person who continues to engage in the business, occupation, profession, or other licensed activity after the implementation of the order suspending a license by the licensing authority is liable for the same civil, administrative, and criminal penalties provided for engaging in the licensed activity without a license or while a license is suspended that apply to any other license holder of that licensing authority.

(f) A licensing authority is exempt from liability to a license holder for any act authorized under this chapter performed by the authority.

(g) Except as provided by this chapter, an order suspending a license does not affect the power of a licensing authority to grant, deny, suspend, revoke, terminate, or renew a license.

Sec. 53.158. ENFORCEMENT BY STATE AGENCIES; RULES. (a) Notwithstanding any other law and in addition to any duty relating to the enforcement of this chapter that is assigned to another governmental entity by this subchapter, each appropriate state agency shall ensure that employers in this state comply with this chapter and may require compliance with this chapter as a condition of a license.

(b) Each appropriate state agency shall adopt rules and prescribe forms as necessary to implement this section.

SECTION 7. Subchapter A, Chapter 204, Labor Code, is amended by adding Section 204.0021 to read as follows:

Sec. 204.0021. ADDITIONAL REQUIREMENT FOR WAGE REPORTING. Any verification form or electronic process used by the commission for an employer to report wages paid by the employer for purposes of this subtitle must require the employer to certify the employer's compliance with Chapter 53.

SECTION 8. Each state agency subject to Subchapter C, Chapter 2264, Government Code, as amended by this Act, shall develop the procedures required under Section 2264.102(e), Government Code, as added by this Act, not later than December 31, 2025.

SECTION 9. Sections 2264.1011, 2264.102, and 2264.103, Government Code, as added by this Act, apply only in relation 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.

SECTION 10. As soon as practicable after the effective date of this Act, each appropriate state agency subject to Section 53.158, Labor Code, as added by this Act, shall adopt rules and prescribe forms as required by that section.

SECTION 11. Section 204.0021, Labor Code, Subchapter C, Chapter 53, Labor Code, and Chapter 621, Government Code, as added by this Act, apply beginning January 1, 2027.

SECTION 12. It is the intent of the legislature that every provision in this Act, and every application of the provisions in this Act to every person, group of persons, or circumstances, is severable from each other. If any application of any provision in this Act to any person, group of persons, or circumstances is found by a court to be invalid for any reason, the remaining applications of that provision to all other persons and circumstances shall be severed and may not be affected.

SECTION 13. This Act takes effect September 1, 2025.