BILL ANALYSIS

Senate Research Center	S.B. 1884
88R13244 CXP-F	By: Flores
	State Affairs
	4/14/2023
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

In 2021, Congress passed the United States-Northern Triangle Enhanced Engagement Act. One of the provisions of this legislation requires the United States Department of State to provide an annual report, known as the Engel List, to Congress. The report consists of corrupt and undemocratic actors in the Northern Triangle countries of El Salvador, Guatemala, and Honduras. This report is used to hold corrupt actors accountable using targeted economic and trade sanctions such as asset freezing and the blocking of all property and denied visas and admission to the United States for those included on the list.

The State of Texas can and should create its own version of the Engel List. One that is focused on tracking and monitoring corrupt and dangerous actors doing business in Texas. The State is under the strongest incentives to hold those who take the path of corruption accountable and shine a light on them if they are undermining the rule of law.

S.B. 1884 seeks to establish such a list that will identify and sanction corrupt foreign nationals, limit their access to Texas state universities, and prevent the State from contracting with businesses linked to an individual on the list.

As proposed, S.B. 1884 amends current law relating to identification of and sanctions against certain foreign nationals.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the secretary of state in SECTION 1 (Section 405.051, Government Code) of this bill.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 405, Government Code, by adding Subchapter D, as follows:

SUBCHAPTER D. TRACKING AND SANCTIONING CERTAIN FOREIGN NATIONALS

Sec. 405.051. ANNUAL REPORT. (a) Requires the secretary of state (SOS), not later than September 1 of each year, to post on SOS's Internet website a report that identifies each foreign national SOS determines to have knowingly engaged in actions that undermine the security and sovereignty of this state, or in significant corruption or obstruction of investigations into acts of corruption in the foreign national's home country, including:

(1) corruption related to government contracts;

(2) bribery and extortion;

(3) the transfer or facilitation of the transfer of proceeds of corruption, including through money laundering;

(4) acts of violence, harassment, or intimidation directed at governmental and nongovernmental corruption investigators;

(5) engaging in or aiding and abetting criminal activity, including human trafficking, across the Texas-Mexico border; and

(6) facilitating the illegal entry of migrants into this state from the United Mexican States.

(b) Authorizes SOS to notify a person of SOS's intent to identify the person in the annual report and the possible ramifications.

(1) standards for making a determination under Subsection (a); and

(2) a procedure by which a person identified in an annual report is authorized to seek expungement of the person's name from the report.

Sec. 405.052. IMPOSITION OF SANCTIONS. Requires SOS to impose one or more of the following sanctions with respect to each foreign national identified in a report required by Section 405.051(a):

(1) notifying the Comptroller of Public Accounts of the State of Texas (comptroller) of the identified person and any business or other entity affiliated with the person and requesting that the comptroller bar the person and any business or other entity affiliated with the person from participation in state contracts under Section 2155.077 (Barring Vendor from Participation in State Contracts);

(2) revoking or seeking revocation of the registration by court action of any foreign entity affiliated with the identified person seeking to transact business in this state and imposing an appropriate civil penalty as provided by Chapter 9 (Foreign Entities), Business Organizations Code; and

(3) notifying the governing board of an institution of higher education, as defined by Section 61.003 (Definitions), Education Code, of any identified person known to be enrolled at the institution and requesting that the institution's governing board immediately expel the person.

SECTION 2. Amends Section 9.101(b), Business Organizations Code, as follows:

(b) Authorizes SOS to revoke a foreign filing entity's registration if SOS finds that:

(1)-(2) makes nonsubstantive changes to these subdivisions; or

(3) a high managerial agent of the entity is a foreign national identified in SOS's annual report of corrupt actors published under Subchapter D, Chapter 405, Government Code.

SECTION 3. Amends Section 9.151(a), Business Organizations Code, as follows:

(a) Authorizes a court to revoke the registration of a foreign filing entity if, as a result of an action brought under Section 9.153 (Filing of Action by Attorney General), the court finds that one or more of the following problems exist:

(1)-(3) makes no changes to these subdivisions;

(4)-(5) makes nonsubstantive changes to these subdivisions; or

(6) a high managerial agent of the entity is a foreign national identified in SOS's annual report of corrupt actors published under Subchapter D, Chapter 405, Government Code.

SECTION 4. Amends Subchapter U, Chapter 51, Education Code, by adding Section 51.811, as follows:

Sec. 51.811. PROHIBITION ON ADMISSION OF CERTAIN FOREIGN NATIONALS. Prohibits the governing board of an institution of higher education, as defined by Section 61.003, notwithstanding any other provision of Subchapter U (Uniform Admissions Policy), Subchapter W (Admission and Scholarship Policies for Graduate and Professional Programs), or other law, from offering admission to an applicant for admission to the institution or for admission to any certificate or degree program, including a graduate, postgraduate, or professional degree program, offered by the institution, if the applicant is identified in SOS's annual report published under Subchapter D, Chapter 405, Government Code.

SECTION 5. Amends Subchapter Z, Chapter 51, Education Code, by adding Section 51.9092, as follows:

Sec. 51.9092.� EXPULSION OF CERTAIN FOREIGN NATIONALS. Requires the �governing board of an institution of higher education, as defined by Section 61.003, to immediately expel any student who is identified in SOS's annual report published under Subchapter D, Chapter 405, Government Code.

SECTION 6. Requires SOS, not later than September 1, 2024, to post on SOS's Internet website the initial report required under Section 405.051, Government Code, as added by this Act.

SECTION 7. Effective date: September 1, 2023.