88R4253 RDS-D

By: Campbell S.B. No. 620

A BILL TO BE ENTITLED

AN ACT

relating to prohibiting the investment of state funds in certain companies doing business with significant foreign narcotics traffickers.

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

SECTION 1. Section 2270.0001, Government Code, is amended by adding Subdivision (3-a) and amending Subdivision (9) to read as follows:

(3-a) "Designated significant foreign narcotics trafficker" means a person listed by the comptroller under Section 2270.0163.

(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 2270.0162.

SECTION 2. Section 2270.0002, Government Code, is amended to read as follows:

Sec. 2270.0002. EXCEPTION. Notwithstanding any other law, a company that the United States government affirmatively declares to be excluded from its federal sanctions regime relating to Sudan, its federal sanctions regime relating to Iran, [or] any federal sanctions regime relating to a designated foreign terrorist organization, or any federal sanctions regime relating to a significant foreign narcotics trafficker is not subject to divestment or investment prohibition under this chapter.

SECTION 3. Chapter 2270, Government Code, is amended by adding Subchapter D-1 to read as follows:

SUBCHAPTER D-1. GENERAL PROVISIONS RELATING TO INVESTMENTS IN

CERTAIN SIGNIFICANT FOREIGN NARCOTICS TRAFFICKERS

Sec. 2270.0161. BUSINESS OPERATIONS DEFINED. In this subchapter, "business operations" has the meaning assigned by Section 2270.0151.

Sec. 2270.0162. SCRUTINIZED BUSINESS OPERATIONS WITH DESIGNATED SIGNIFICANT FOREIGN NARCOTICS TRAFFICKER. A company engages in scrutinized business operations with a designated significant foreign narcotics trafficker if the company has business operations that involve:

(1) a contract with or providing supplies or services to a designated significant foreign narcotics trafficker;

(2) a company in which a designated significant foreign narcotics trafficker has any direct or indirect equity share;

(3) a consortium or project commissioned by a designated significant foreign narcotics trafficker; or

(4) a company involved in a consortium or project commissioned by a designated significant foreign narcotics trafficker.

Sec. 2270.0163. LIST OF DESIGNATED SIGNIFICANT FOREIGN NARCOTICS TRAFFICKERS. (a) The comptroller shall prepare and maintain a list of designated significant foreign narcotics traffickers that is made up of significant foreign narcotics traffickers and other related persons designated by the president of the United States or the United States secretary of the treasury under 21 U.S.C. Sections 1903-1904.

(b) The comptroller shall maintain the list by updating the list as necessary to reflect changes in the persons designated as significant foreign narcotics traffickers and other related persons as described by Subsection (a).

(c) Not later than the 30th day after the date the comptroller first prepares or updates the list of designated significant foreign narcotics traffickers as required by this section, the comptroller shall:

(1) file the list with the presiding officer of each house of the legislature and the attorney general; and

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

SECTION 4. Sections 2270.0201(a) and (b), Government Code, 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 with designated significant foreign narcotics traffickers, as applicable, including information provided by the state, nonprofit organizations, research firms, international organizations, and governmental entities.

SECTION 5. Section 2270.0203, Government Code, 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 with designated significant foreign narcotics traffickers 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 6. Section 2270.0204(b), Government Code, 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 designated significant foreign narcotics trafficker-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 2270.0162, or convert such operations to inactive business operations in order to avoid qualifying for divestment by investing entities.

SECTION 7. Not later than December 1, 2023, the comptroller of public accounts shall prepare the initial list of designated significant foreign narcotics traffickers as required by Section 2270.0163, Government Code, as added by this Act.

SECTION 8. Not later than January 1, 2024, 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 9. This Act takes effect September 1, 2023.