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AN ACT
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relating to prohibiting contracts or other agreements with certain |
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foreign-owned companies in connection with critical infrastructure |
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in this state. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. This Act may be cited as the Lone Star |
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Infrastructure Protection Act. |
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SECTION 2. Subtitle C, Title 5, Business & Commerce Code, is |
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amended by adding Chapter 113 to read as follows: |
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CHAPTER 113. PROHIBITION ON AGREEMENTS WITH CERTAIN FOREIGN-OWNED |
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COMPANIES IN CONNECTION WITH CRITICAL INFRASTRUCTURE |
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Sec. 113.001. DEFINITIONS. In this chapter: |
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(1) "Company" means a sole proprietorship, |
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organization, association, corporation, partnership, joint |
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venture, limited partnership, limited liability partnership, or |
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limited liability company, including a wholly owned subsidiary, |
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majority-owned subsidiary, parent company, or affiliate of those |
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entities or business associations, that exists to make a profit. |
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(2) "Critical infrastructure" means a communication |
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infrastructure system, cybersecurity system, electric grid, |
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hazardous waste treatment system, or water treatment facility. |
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(3) "Cybersecurity" means the measures taken to |
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protect a computer, computer network, computer system, or other |
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technology infrastructure against unauthorized use or access. |
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(4) "Designated country" means a country designated by |
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the governor as a threat to critical infrastructure under Section |
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113.003. |
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Sec. 113.002. PROHIBITED ACCESS TO CRITICAL |
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INFRASTRUCTURE. (a) A business entity may not enter into an |
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agreement relating to critical infrastructure in this state with a |
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company: |
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(1) if, under the agreement, the company would be |
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granted direct or remote access to or control of critical |
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infrastructure in this state, excluding access specifically |
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allowed by the business entity for product warranty and support |
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purposes; and |
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(2) if the business entity knows that the company is: |
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(A) owned by or the majority of stock or other |
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ownership interest of the company is held or controlled by: |
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(i) individuals who are citizens of  China , |
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Iran, North Korea, Russia, or a designated country; or |
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(ii) a company or other entity, including a |
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governmental entity, that is owned or controlled by citizens of or |
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is directly controlled by the government of China , Iran, North |
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Korea, Russia, or a designated country; or |
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(B) headquartered in China , Iran, North Korea, |
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Russia, or a designated country. |
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(b) The prohibition described by Subsection (a) applies |
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regardless of whether: |
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(1) the company's or its parent company's securities |
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are publicly traded; or |
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(2) the company or its parent company is listed on a |
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public stock exchange as: |
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(A) a Chinese, Iranian, North Korean, or Russian |
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company; or |
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(B) a company of a designated country. |
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Sec. 113.003. DESIGNATION OF COUNTRY AS THREAT TO CRITICAL |
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INFRASTRUCTURE. (a) The governor, after consultation with the |
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public safety director of the Department of Public Safety, may |
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designate a country as a threat to critical infrastructure for |
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purposes of this chapter. |
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(b) The governor shall consult the Homeland Security |
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Council, established under Subchapter B, Chapter 421, Government |
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Code, to assess a threat to critical infrastructure for purposes of |
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making a designation under this section. |
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SECTION 3. Subtitle F, Title 10, Government Code, is |
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amended by adding Chapter 2274 to read as follows: |
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CHAPTER 2274. PROHIBITION ON CONTRACTS WITH CERTAIN FOREIGN-OWNED |
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COMPANIES IN CONNECTION WITH CRITICAL INFRASTRUCTURE |
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Sec. 2274.0101. DEFINITIONS. In this chapter: |
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(1) "Company" means a sole proprietorship, |
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organization, association, corporation, partnership, joint |
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venture, limited partnership, limited liability partnership, or |
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limited liability company, including a wholly owned subsidiary, |
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majority-owned subsidiary, parent company, or affiliate of those |
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entities or business associations, that exists to make a profit. |
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(2) "Critical infrastructure" means a communication |
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infrastructure system, cybersecurity system, electric grid, |
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hazardous waste treatment system, or water treatment facility. |
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(3) "Cybersecurity" means the measures taken to |
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protect a computer, computer network, computer system, or other |
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technology infrastructure against unauthorized use or access. |
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(4) "Designated country" means a country designated by |
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the governor as a threat to critical infrastructure under Section |
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2274.0103. |
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(5) "Governmental entity" means a state agency or |
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political subdivision of this state. |
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Sec. 2274.0102. PROHIBITED CONTRACTS. (a) A governmental |
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entity may not enter into a contract or other agreement relating to |
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critical infrastructure in this state with a company: |
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(1) if, under the contract or other agreement, the |
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company would be granted direct or remote access to or control of |
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critical infrastructure in this state, excluding access |
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specifically allowed by the governmental entity for product |
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warranty and support purposes; and |
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(2) if the governmental entity knows that the company |
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is: |
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(A) owned by or the majority of stock or other |
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ownership interest of the company is held or controlled by: |
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(i) individuals who are citizens of China , |
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Iran, North Korea, Russia, or a designated country; or |
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(ii) a company or other entity, including a |
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governmental entity, that is owned or controlled by citizens of or |
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is directly controlled by the government of China , Iran, North |
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Korea, Russia, or a designated country; or |
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(B) headquartered in China , Iran, North Korea, |
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Russia, or a designated country. |
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(b) The prohibition described by Subsection (a) applies |
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regardless of whether: |
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(1) the company's or its parent company's securities |
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are publicly traded; or |
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(2) the company or its parent company is listed on a |
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public stock exchange as: |
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(A) a Chinese, Iranian, North Korean, or Russian |
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company; or |
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(B) a company of a designated country. |
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Sec. 2274.0103. DESIGNATION OF COUNTRY AS THREAT TO |
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CRITICAL INFRASTRUCTURE. (a) The governor, after consultation |
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with the public safety director of the Department of Public Safety, |
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may designate a country as a threat to critical infrastructure for |
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purposes of this chapter. |
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(b) The governor shall consult the Homeland Security |
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Council, established under Subchapter B, Chapter 421, to assess a |
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threat to critical infrastructure for purposes of making a |
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designation under this section. |
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SECTION 4. Chapter 113, Business & Commerce Code, as added |
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by this Act, and Chapter 2274, Government Code, as added by this |
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Act, apply to a contract or agreement entered into on or after the |
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effective date of this Act. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2021. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 2116 passed the Senate on |
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April 26, 2021, by the following vote: Yeas 31, Nays 0; and that |
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the Senate concurred in House amendments on May 29, 2021, by the |
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following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 2116 passed the House, with |
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amendments, on May 24, 2021, by the following vote: Yeas 141, |
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Nays 0, one present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |