BILL ANALYSIS
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Senate Research Center |
C.S.S.B. 1884 |
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88R19711 CXP-F |
By: Flores |
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State Affairs |
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4/18/2023 |
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Committee Report (Substituted) |
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.
SB 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.
Committee Substitute:
Adds a list of sources that the Secretary of State (SOS) can use to prepare reports and will establish a procedure for expungement of an individual's name for the report.
Updates
language so that SOS is not tasked with imposing sanctions but provides
information to the appropriate entities.�����������
Adds that SOS can deny an application for business registration for any foreign entity affiliated with an identified individual.
Provides that the governing board of a public institution of higher education is required to consult SOS's annual report of corrupt foreign actors at least twice a year.
Moves Section 1 of the bill to Title 7, Government Code (Intergovernmental Relations).
C.S.S.B. 1884 amends current law relating to identification of and sanctions against certain foreign actors.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the secretary of state in SECTION 1 (Section 794.001, Government Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 7, Government Code, by adding Chapter 794, as follows:
CHAPTER 794. TRACKING AND SANCTIONING CORRUPT FOREIGN ACTORS
Sec. 794.001. ANNUAL REPORT. (a) Requires the secretary of state (SOS), not later than September 1 of each year, to prepare a report that identifies each foreign actor 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 actor'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 obtain information necessary to prepare a report required by Subsection (a) from:
(1) the Office of Foreign Assets Control within the United States Department of the Treasury;
(2) the Office of the Attorney General;
(3) the Department of Public Safety of the State of Texas;
(4) the Comptroller of Public Accounts of the State of Texas (comptroller); or
(5) any other state or federal agency having information SOS believes necessary to prepare the report.
(c) Authorizes SOS to notify an individual of SOS's intent to identify the individual in the annual report and the possible ramifications of that identification.
(d) Requires SOS to adopt rules necessary to administer this section, including rules establishing a procedure by which an individual identified in an annual report may seek expungement of the individual's name from the report.
(e) Requires SOS to publish the annual report required by Subsection (a) on SOS's public Internet website.
Sec. 794.002. IMPOSITION OF SANCTIONS. Provides that with respect to each foreign actor identified in a report required by Section 794.00l(a):
(1) the comptroller is required to prohibit the identified individual and any business or other entity affiliated with the individual from entering into contracts with any state agency or political subdivision of this state;
(2) SOS is required to deny the application for registration or seek revocation of the registration of any foreign entity affiliated with the identified individual seeking to transact business in this state and impose an appropriate civil penalty as provided by Chapter 9 (Foreign Entities), Business Organizations Code; and
(3) the governing board of an institution of higher education, as defined by Section 61.003 (Definitions), Education Code, is required to deny admission to the foreign actor as provided by Section 51.811, Education Code, or expel the foreign actor as provided by Section 51.9092, Education Code.
SECTION 2. 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 actor identified in SOS's annual report of corrupt foreign actors published under Chapter 794, Government Code.
SECTION 3. Amends Subchapter U, Chapter 51, Education Code, by adding Section 51.811, as follows:
Sec. 51.811. PROHIBITION ON ADMISSION OF CERTAIN PROSPECTIVE STUDENTS CONNECTED WITH CORRUPT FOREIGN ACTIVITIES. Prohibits the governing board of an institution of higher education, as defined by Section 61.003, notwithstanding any other provision of Subchapter U (Uniform Admission 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 of corrupt foreign actors published under Chapter 794, Government Code.
SECTION 4. Amends Subchapter Z, Chapter 51, Education Code, by adding Section 51.9092, as follows:
Sec. 51.9092. EXPULSION OF CERTAIN STUDENTS CONNECTED WITH CORRUPT FOREIGN ACTIVITIES. Requires the governing board of an institution of higher education, as defined by Section 61.003, at least twice each year, to consult the SOS's annual report of corrupt foreign actors published under Chapter 794, Government Code, and immediately expel any student who is identified in the report.
SECTION 5. Effective date: September 1, 2023.