85S12052 KLA-D

By: Garcia, et al. S.B. No. 120

A BILL TO BE ENTITLED

AN ACT

relating to investment prohibitions and divestment requirements for certain investments of public money in companies involved in the border wall between the United States and Mexico.

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

SECTION 1. Section 2270.0001, Government Code, as added by Chapter 96 (S.B. 253), Acts of the 85th Legislature, Regular Session, 2017, is amended by adding Subdivision (1-a) and amending Subdivision (9) to read as follows:

(1-a) "Border wall" means a wall, fence, or other barrier on the border between the United States and Mexico.

(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 2270.0172.

SECTION 2. Chapter 2270, Government Code, as added by Chapter 96 (S.B. 253), Acts of the 85th Legislature, Regular Session, 2017, is amended by adding Subchapter D-1 to read as follows:

SUBCHAPTER D-1. GENERAL PROVISIONS RELATING TO INVESTMENTS

INVOLVING BORDER WALL

Sec. 2270.0171. DEFINITION. In this subchapter, "business operations" means engaging in commerce in any form, including by:

(1) 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; or

(2) planning, constructing, or maintaining a project.

Sec. 2270.0172. SCRUTINIZED BUSINESS OPERATIONS RELATING TO BORDER WALL. A company engages in scrutinized business operations relating to the border wall if the company has business operations that involve planning, constructing, or maintaining the border wall, including by providing:

(1) supplies, equipment, or other personal property; or

(2) personnel.

SECTION 3. Sections 2270.0201(a) and (b), Government Code, as added by Chapter 96 (S.B. 253), Acts of the 85th Legislature, Regular Session, 2017, 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 relating to the border wall, as applicable, including information provided by the state, nonprofit organizations, research firms, international organizations, and governmental entities.

SECTION 4. Section 2270.0203, Government Code, as added by Chapter 96 (S.B. 253), Acts of the 85th Legislature, Regular Session, 2017, 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 relating to the border wall 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 5. Section 2270.0204(b), Government Code, as added by Chapter 96 (S.B. 253), Acts of the 85th Legislature, Regular Session, 2017, 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 border wall-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 2270.0172, or convert such operations to inactive business operations in order to avoid qualifying for divestment by investing entities.

SECTION 6. Not later than January 1, 2018, the comptroller shall:

(1) prepare an updated list of scrutinized companies required by Section 2270.0201, Government Code, as amended by this Act, that includes companies that are scrutinized companies described by Section 2270.0001(9)(D), Government Code, as added by this Act;

(2) provide the list to each investing entity, as defined by Section 2270.0001(7), Government Code; and

(3) post the list on the comptroller's Internet website.

SECTION 7. This Act takes effect December 1, 2017.