S.B. No. 2116
 
 
 
 
AN ACT
  relating to prohibiting contracts or other agreements with certain
  foreign-owned companies in connection with critical infrastructure
  in this state.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  This Act may be cited as the Lone Star
  Infrastructure Protection Act.
         SECTION 2.  Subtitle C, Title 5, Business & Commerce Code, is
  amended by adding Chapter 113 to read as follows:
  CHAPTER 113. PROHIBITION ON AGREEMENTS WITH CERTAIN FOREIGN-OWNED
  COMPANIES IN CONNECTION WITH CRITICAL INFRASTRUCTURE
         Sec. 113.001.  DEFINITIONS. In this chapter:
               (1)  "Company" means a sole proprietorship,
  organization, association, corporation, partnership, joint
  venture, limited partnership, limited liability partnership, or
  limited liability company, including a wholly owned subsidiary,
  majority-owned subsidiary, parent company, or affiliate of those
  entities or business associations, that exists to make a profit.
               (2)  "Critical infrastructure" means a communication
  infrastructure system, cybersecurity system, electric grid,
  hazardous waste treatment system, or water treatment facility.
               (3)  "Cybersecurity" means the measures taken to
  protect a computer, computer network, computer system, or other
  technology infrastructure against unauthorized use or access.
               (4)  "Designated country" means a country designated by
  the governor as a threat to critical infrastructure under Section
  113.003.
         Sec. 113.002.  PROHIBITED ACCESS TO CRITICAL
  INFRASTRUCTURE. (a) A business entity may not enter into an
  agreement relating to critical infrastructure in this state with a
  company:
               (1)  if, under the agreement, the company would be
  granted direct or remote access to or control of critical
  infrastructure in this state, excluding access specifically
  allowed by the business entity for product warranty and support
  purposes; and
               (2)  if the business entity knows that the company is:
                     (A)  owned by or the majority of stock or other
  ownership interest of the company is held or controlled by:
                           (i)  individuals who are citizens of China ,
  Iran, North Korea, Russia, or a designated country; or
                           (ii)  a company or other entity, including a
  governmental entity, that is owned or controlled by citizens of or
  is directly controlled by the government of China , Iran, North
  Korea, Russia, or a designated country; or
                     (B)  headquartered in China , Iran, North Korea,
  Russia, or a designated country.
         (b)  The prohibition described by Subsection (a) applies
  regardless of whether:
               (1)  the company's or its parent company's securities
  are publicly traded; or
               (2)  the company or its parent company is listed on a
  public stock exchange as:
                     (A)  a Chinese, Iranian, North Korean, or Russian
  company; or
                     (B)  a company of a designated country.
         Sec. 113.003.  DESIGNATION OF COUNTRY AS THREAT TO CRITICAL
  INFRASTRUCTURE. (a) The governor, after consultation with the
  public safety director of the Department of Public Safety, may
  designate a country as a threat to critical infrastructure for
  purposes of this chapter.
         (b)  The governor shall consult the Homeland Security
  Council, established under Subchapter B, Chapter 421, Government
  Code, to assess a threat to critical infrastructure for purposes of
  making a designation under this section.
         SECTION 3.  Subtitle F, Title 10, Government Code, is
  amended by adding Chapter 2274 to read as follows:
  CHAPTER 2274. PROHIBITION ON CONTRACTS WITH CERTAIN FOREIGN-OWNED
  COMPANIES IN CONNECTION WITH CRITICAL INFRASTRUCTURE
         Sec. 2274.0101.  DEFINITIONS. In this chapter:
               (1)  "Company" means a sole proprietorship,
  organization, association, corporation, partnership, joint
  venture, limited partnership, limited liability partnership, or
  limited liability company, including a wholly owned subsidiary,
  majority-owned subsidiary, parent company, or affiliate of those
  entities or business associations, that exists to make a profit.
               (2)  "Critical infrastructure" means a communication
  infrastructure system, cybersecurity system, electric grid,
  hazardous waste treatment system, or water treatment facility.
               (3)  "Cybersecurity" means the measures taken to
  protect a computer, computer network, computer system, or other
  technology infrastructure against unauthorized use or access.
               (4)  "Designated country" means a country designated by
  the governor as a threat to critical infrastructure under Section
  2274.0103.
               (5)  "Governmental entity" means a state agency or
  political subdivision of this state.
         Sec. 2274.0102.  PROHIBITED CONTRACTS.  (a)  A governmental
  entity may not enter into a contract or other agreement relating to
  critical infrastructure in this state with a company:
               (1)  if, under the contract or other agreement, the
  company would be granted direct or remote access to or control of
  critical infrastructure in this state, excluding access
  specifically allowed by the governmental entity for product
  warranty and support purposes; and
               (2)  if the governmental entity knows that the company
  is:
                     (A)  owned by or the majority of stock or other
  ownership interest of the company is held or controlled by: 
                           (i)  individuals who are citizens of China ,
  Iran, North Korea, Russia, or a designated country; or 
                           (ii)  a company or other entity, including a
  governmental entity, that is owned or controlled by citizens of or
  is directly controlled by the government of China , Iran, North
  Korea, Russia, or a designated country; or 
                     (B)  headquartered in China , Iran, North Korea,
  Russia, or a designated country.
         (b)  The prohibition described by Subsection (a) applies
  regardless of whether:
               (1)  the company's or its parent company's securities
  are publicly traded; or
               (2)  the company or its parent company is listed on a
  public stock exchange as:
                     (A)  a Chinese, Iranian, North Korean, or Russian
  company; or
                     (B)  a company of a designated country.
         Sec. 2274.0103.  DESIGNATION OF COUNTRY AS THREAT TO
  CRITICAL INFRASTRUCTURE. (a) The governor, after consultation
  with the public safety director of the Department of Public Safety,
  may designate a country as a threat to critical infrastructure for
  purposes of this chapter.
         (b)  The governor shall consult the Homeland Security
  Council, established under Subchapter B, Chapter 421, to assess a
  threat to critical infrastructure for purposes of making a
  designation under this section.
         SECTION 4.  Chapter 113, Business & Commerce Code, as added
  by this Act, and Chapter 2274, Government Code, as added by this
  Act, apply to a contract or agreement entered into on or after the
  effective date of this Act.
         SECTION 5.  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, 2021.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 2116 passed the Senate on
  April 26, 2021, by the following vote: Yeas 31, Nays 0; and that
  the Senate concurred in House amendments on May 29, 2021, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 2116 passed the House, with
  amendments, on May 24, 2021, by the following vote: Yeas 141,
  Nays 0, one present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor
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