89R23482 CXP-F
 
  By: Wilson, Hefner, Shaheen, Howard, Lambert, H.B. No. 127
      et al.
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to measures to protect public institutions of higher
  education from foreign adversaries and to the prosecution of the
  criminal offense of theft of trade secrets; providing civil
  penalties; increasing a criminal penalty.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter Z, Chapter 51, Education Code, is
  amended by adding Section 51.957 to read as follows:
         Sec. 51.957.  HIGHER EDUCATION RESEARCH SECURITY COUNCIL.
  (a)  In this section:
               (1)  "Council" means the Higher Education Research
  Security Council established under this section.
               (2)  "Postsecondary educational institution" means an
  institution of higher education or a private or independent
  institution of higher education, as those terms are defined by
  Section 61.003.
               (3)  "Tier one research institution" means a
  postsecondary educational institution in this state designated as
  R1: very high spending and doctorate production in the 2025
  Carnegie Classification of Institutions of Higher Education
  published by the Indiana University Center for Postsecondary
  Research.
         (b)  The Higher Education Research Security Council is
  established to promote secure academic research at tier one
  research institutions while mitigating the risk of foreign
  espionage and interference.
         (c)  The council is composed of:
               (1)  each research security officer designated under
  Section 51.956; and
               (2)  a research security officer designated by each
  private or independent institution of higher education, as defined
  by Section 61.003, that elects to participate in the council.
         (d)  A council member serves at the will of the person who
  designated the member.
         (e)  A vacancy on the council shall be filled in the same
  manner as the original designation.
         (f)  The council member designated under Section 51.956 for
  The Texas A&M University System shall serve as the initial
  presiding officer of the council.
         (g)  The council shall:
               (1)  identify best practices for a tier one research
  institution to conduct research securely while mitigating the
  threat of foreign espionage and interference;
               (2)  develop a research security policy that a tier one
  research institution shall adopt to improve research security;
               (3)  establish an accreditation process under which the
  council shall award a tier one research institution an
  accreditation for security excellence;
               (4)  promote attendance at the annual academic security
  and counter exploitation program seminar offered by The Texas A&M
  University System; and
               (5)  develop and offer an annual training program for
  tier one research institution security officers that includes:
                     (A)  background and academic history checks of
  researchers; and
                     (B)  research security and integrity tools and
  software that must be used to prevent the loss of intellectual
  capital.
         (h)  The council shall meet at least once each quarter.
         (i)  A meeting conducted under Subsection (h) must be in
  person or by video conference call, as determined by the presiding
  officer.
         (j)  The council shall prepare and submit to the governor,
  the attorney general's office, and the presiding officer of each
  legislative committee with primary jurisdiction over higher
  education an annual report on the status of research security at
  tier one research institutions and any associated recommendations.
         (k)  A report submitted under Subsection (j) is confidential
  and is not subject to disclosure under Chapter 552, Government
  Code.
         (l)  The council may solicit and accept gifts, grants, and
  donations for purposes of this section but may not solicit or accept
  a gift, grant, or donation from an entity or country:
               (1)  prohibited from participating in federal
  contracts under Section 889, John S. McCain National Defense
  Authorization Act for Fiscal Year 2019 (Pub. L. No. 115-232);
               (2)  identified as a Chinese military company by the
  United States Department of Defense in accordance with Section
  1260H, William M. (Mac) Thornberry National Defense Authorization
  Act for Fiscal Year 2021 (Pub. L. No. 116-283);
               (3)  owned by the government of a country designated as
  a foreign adversary by the United States secretary of commerce
  under 15 C.F.R. Section 791.4; or
               (4)  controlled by a governing or regulatory body
  located in a country described by Subdivision (3).
         SECTION 2.  Subtitle A, Title 3, Education Code, is amended
  by adding Chapter 51B to read as follows:
  CHAPTER 51B.  HIGHER EDUCATION RESEARCH AND PROTECTION
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 51B.001.  DEFINITIONS. In this chapter:
               (1)  "Affiliate organization" means an entity under the
  control of or established for the benefit of an organization.  The
  term includes a direct-support organization that is organized and
  operated to receive, hold, invest, and administer property and make
  expenditures to or for the benefit of an institution of higher
  education or for the benefit of a research and development park or
  authority affiliated with an institution of higher education.
               (2)  "Company" has the meaning assigned by Section
  117.001, Business & Commerce Code.
               (3)  "Coordinating board" means the Texas Higher
  Education Coordinating Board.
               (4)  "Council" means the Higher Education Research
  Security Council established under Section 51.957.
               (5)  "Federally banned company" means a company:
                     (A)  that produces or provides communications
  equipment or services listed on the covered list published by the
  Public Safety and Homeland Security Bureau of the Federal
  Communications Commission, as required by 47 C.F.R. Section
  1.50002;
                     (B)  listed in Supplement No. 4 to 15 C.F.R. Part
  744;
                     (C)  prohibited from participating in federal
  contracts under Section 889, John S. McCain National Defense
  Authorization Act for Fiscal Year 2019 (Pub. L. No. 115-232);
                     (D)  identified as a Chinese military company by
  the United States Department of Defense in accordance with Section
  1260H, William M. (Mac) Thornberry National Defense Authorization
  Act for Fiscal Year 2021 (Pub. L. No. 116-283);
                     (E)  prohibited from participating in federal
  contracts under Section 5949, James M. Inhofe National Defense
  Authorization Act for Fiscal Year 2023 (Pub. L. No. 117-263);
                     (F)  subject to economic and trade sanctions
  administered by the Office of Foreign Assets Control of the United
  States Department of the Treasury;
                     (G)  subject to an order issued by the Federal
  Acquisition Security Council under the Federal Acquisition Supply
  Chain Security Act of 2018 (Title II, Pub. L. No. 115-390); or
                     (H)  restricted under any similar sanction
  program under federal law.
               (6)  "Foreign adversary" means a country:
                     (A)  identified by the United States Director of
  National Intelligence as a country that poses a risk to the national
  security of the United States in at least one of the three most
  recent Annual Threat Assessments of the U.S. Intelligence Community
  issued pursuant to Section 108B, National Security Act of 1947 (50
  U.S.C. Section 3043b); or
                     (B)  designated by the governor after
  consultation with the director of the Department of Public Safety.
               (7)  "Foreign adversary company":
                     (A)  means a company that:
                           (i)  is domiciled, incorporated,
  headquartered, issued, or listed in a foreign adversary;
                           (ii)  has its principal place of business in
  a foreign adversary;
                           (iii)  is controlled by the government,
  military, or ruling political party of a foreign adversary; or
                           (iv)  is majority owned by an entity
  described by Subparagraph (i), (ii), or (iii); and
                     (B)  does not include:
                           (i)  a United States citizen;
                           (ii)  a U.S. subsidiary, as defined by 15
  C.F.R. Section 772.1; or
                           (iii)  a parent company not described by
  Paragraph (A) that derives not more than 50 percent of the company's
  total annual global revenue from subsidiaries from a foreign
  adversary, regardless of whether the subsidiaries are companies
  described by Paragraph (A).
               (8)  "Foreign government" means the government or an
  agent of a country, nation, or group of nations, or a province or
  other political subdivision of a country or nation, other than the
  United States government.
               (9)  "Foreign source" means:
                     (A)  a foreign government or agency of a foreign
  government;
                     (B)  a legal entity created solely under the laws
  of a foreign government;
                     (C)  an individual who is not a citizen or a
  national of the United States, including a territory or
  protectorate of the United States;
                     (D)  a partnership, association, organization, or
  other combination of persons, or a subsidiary of such an entity,
  organized under the laws of or having its principal place of
  business in a foreign adversary;
                     (E)  a political party or member of a political
  party of a foreign adversary; or
                     (F)  an agent acting on behalf of an individual or
  entity described by Paragraph (A), (B), (C), (D), or (E).
               (10)  "Gift" means a gift, grant, endowment, award, or
  donation of money, property, or a service of any kind, including a
  conditional or unconditional pledge of the gift, grant, endowment,
  award, or donation.
               (11)  "Institution of higher education" has the meaning
  assigned by Section 61.003.
               (12)  "Political party" means an organization or
  combination of individuals whose aim or purpose is, or who are
  engaged in an activity devoted to, the establishment, control, or
  acquisition of administration or control of a government, or the
  furtherance or influencing of the political or public interest,
  policies, or relations of a government.
         Sec. 51B.002.  RULES. The coordinating board shall adopt
  rules necessary to implement this chapter.
  SUBCHAPTER B. REQUIREMENTS FOR GIFTS FROM AND CONTRACTS WITH
  FOREIGN ADVERSARIES AND CERTAIN COMPANIES
         Sec. 51B.051.  GIFT FROM FOREIGN ADVERSARY. (a) An
  institution of higher education or employee of an institution of
  higher education may not accept a gift the institution is directly
  or indirectly offered from a foreign source of a foreign adversary
  unless the gift is of de minimis value, as determined by
  coordinating board rule.
         (b)  An institution of higher education shall:
               (1)  include the prohibition described by Subsection
  (a) in the institution's ethics policy; and
               (2)  create a mechanism by which an employee of the
  institution may report being offered from a foreign source of a
  foreign adversary a gift prohibited by Subsection (a).
         (c)  Each institution of higher education that submits
  reporting on foreign gift and contract disclosures to the United
  States Department of Education required under Section 117, Higher
  Education Act of 1965 (20 U.S.C. Section 1001 et seq.), shall submit
  that reporting to the coordinating board at the time when the
  institution is required to submit that reporting to the United
  States Department of Education.
         (d)  Not later than December 1 of each year, the coordinating
  board shall submit to the governor, the lieutenant governor, and
  the speaker of the house of representatives a report detailing the
  information submitted by institutions of higher education under
  Subsection (c) for that year.
         (e)  Information required to be reported under this section
  is not confidential except as otherwise provided by federal or
  state law or unless protected as a trade secret by federal or state
  law.
         Sec. 51B.052.  PROHIBITED CONTRACT WITH FOREIGN ADVERSARY
  COMPANY OR FEDERALLY BANNED COMPANY; EXCEPTION. (a) Except as
  provided by Subsection (b), a foreign adversary company or a
  federally banned company may not submit a bid for a contract or
  enter into a contract with an institution of higher education
  relating to goods or services. For purposes of this section, a
  company is considered a foreign adversary company if the company
  enters into a contract with an institution of higher education to
  sell to the institution any final products or services produced by a
  foreign adversary company or a federally banned company.
         (b)  An institution of higher education may enter into a
  contract with a company described by Subsection (a) if:
               (1)  there is no other reasonable option for procuring
  the good or service;
               (2)  the institution preapproves the contract; and
               (3)  failure to procure the good or service would pose a
  greater threat to this state than the threat associated with
  procuring the good or service.
         Sec. 51B.053.  CERTIFICATION REQUIRED. An institution of
  higher education shall require a vendor submitting a bid for a
  contract relating to goods or services to include in the bid a
  written certification that the vendor is not prohibited from
  submitting the bid or entering into the contract under Section
  51B.052(a).
         Sec. 51B.054.  FALSE CERTIFICATION; VIOLATION. (a) An
  institution of higher education that determines that a vendor
  holding a contract with the institution was ineligible to have the
  contract awarded under Section 51B.052(a) because the vendor's
  certification submitted under Section 51B.053 was false shall
  notify the vendor that the vendor is in violation of this
  subchapter. The notice must include the basis for the institution's
  determination that the vendor is in violation of this subchapter.
         (b)  An institution of higher education, on making a final
  determination that a vendor violated this subchapter, shall refer
  the matter to the attorney general for enforcement under Section
  51B.056.
         Sec. 51B.055.  CONTRACT TERMINATION FOR FALSE
  CERTIFICATION; BARRING FROM STATE CONTRACTS. (a) An institution
  of higher education, on making a final determination that a vendor
  violated this subchapter, shall immediately terminate the contract
  without further obligation to the vendor.
         (b)  On receiving notice from an institution of higher
  education of a contract termination under Subsection (a) because a
  vendor violated this subchapter, the comptroller may bar the vendor
  from participating in state contracts using procedures prescribed
  under Section 2155.077, Government Code.
         (c)  Debarment under this section expires on the fifth
  anniversary of the date of the debarment under Subsection (b).
         Sec. 51B.056.  CIVIL PENALTY. (a) A vendor that violates
  this subchapter is liable to the state for a civil penalty in an
  amount equal to the greater of:
               (1)  twice the amount of the contract terminated under
  Section 51B.055; or
               (2)  $250,000.
         (b)  The attorney general may bring an action to recover a
  civil penalty imposed under this section.
         Sec. 51B.057.  INVESTIGATION. (a) An institution of higher
  education shall investigate an alleged violation of this subchapter
  if the institution receives:
               (1)  a complaint from a compliance officer of a state
  agency or an institution of higher education; or
               (2)  a sworn complaint based on substantive information
  and reasonable belief.
         (b)  An institution of higher education may request from any
  person records relevant to a reasonable suspicion of a violation of
  this subchapter.  A person who receives a request under this
  subsection shall produce the records not later than the 10th day
  after the date the person receives the request, unless the
  institution and the person agree to a later date.
  SUBCHAPTER C.  INTERNATIONAL CULTURAL EXCHANGE AGREEMENTS AND
  PARTNERSHIPS AND STUDENT ASSOCIATIONS
         Sec. 51B.101.  DEFINITIONS. In this subchapter:
               (1)  "Cultural exchange agreement" means a written or
  spoken statement of mutual interest in cultural exchange or
  academic or research collaboration.
               (2)  "Cultural exchange partnership" means a faculty or
  student exchange program, study abroad program, matriculation
  program, recruiting program, or dual degree program.
         Sec. 51B.102.  CERTAIN INTERNATIONAL CULTURAL AGREEMENTS
  AND PARTNERSHIPS PROHIBITED. (a) An institution of higher
  education may not participate in a cultural exchange agreement or
  cultural exchange partnership with a foreign source of a foreign
  adversary, or an entity controlled by a foreign adversary, that:
               (1)  constrains the institution's freedom of contract;
               (2)  allows the institution's curriculum or values to
  be directed, controlled, or influenced by the foreign adversary; or
               (3)  promotes an agenda detrimental to the safety or
  security of this state, the residents of this state, or the United
  States.
         (b)  Before entering into a cultural exchange agreement or
  cultural exchange partnership with a foreign source of a foreign
  adversary, an institution of higher education shall share the
  agreement or partnership with the council.  If the council
  determines that the agreement or partnership violates the
  prohibition under Subsection (a), the institution may not
  participate in the agreement or partnership.
         (c)  Not later than December 1 of each year, the council
  shall submit to the governor, the lieutenant governor, and the
  speaker of the house of representatives a report detailing the
  total number of cultural exchange agreements and cultural exchange
  partnerships that were entered into by institutions of higher
  education and rejected by the council in the 12 months preceding the
  date of the report.
         Sec. 51B.103.  PROHIBITIONS ON STUDENT ASSOCIATIONS. (a) A
  student or scholars association affiliated with an institution of
  higher education may not:
               (1)  accept a gift from a foreign source of a foreign
  adversary; or
               (2)  enter into a contract or agreement with a foreign
  source of a foreign adversary.
         (b)  An institution of higher education shall terminate an
  affiliation with a student or scholars association if the
  institution determines that the association has violated this
  section.
         (c)  For purposes of this section, member dues or fees are
  not considered a gift from a foreign source of a foreign adversary.
  SUBCHAPTER D.  SCREENING OF FOREIGN RESEARCHERS
         Sec. 51B.151.  SCREENING OF FOREIGN RESEARCHERS REQUIRED.
  (a)  Before offering an applicant employment for a research or
  research-related support position at the institution or granting an
  applicant access to research data or activities or other sensitive
  data of the institution, an institution of higher education must
  screen the applicant as provided by this subchapter if the
  applicant:
               (1)  is a citizen of a foreign country and is not a
  permanent resident of the United States; or
               (2)  is affiliated with an institution or program, or
  has at least one year of employment or training, in a foreign
  adversary, other than employment or training by an agency of the
  United States.
         (b)  A screening under this section must include a background
  check to determine if the applicant has any ties to a foreign
  adversary that would prevent the applicant from being able to
  maintain the security or integrity of the institution of higher
  education and research data or activities or other sensitive data
  of the institution.
         (c)  If an institution of higher education procures a third
  party to conduct a background check under Subsection (b), the
  institution shall consult with the Department of Public Safety and
  the council in determining whether the third party is qualified to
  conduct a background check that meets the requirements of that
  subsection.
         (d)  An institution of higher education may screen
  additional applicants as provided by this subchapter for a position
  described by Subsection (a) at the institution's discretion.
         Sec. 51B.152.  APPLICATION: REQUIRED MATERIALS. (a) An
  institution of higher education must require an applicant subject
  to screening under Section 51B.151 to submit to the institution:
               (1)  if the applicant is a citizen of a foreign country,
  a copy of the applicant's passport and nonimmigrant visa
  application most recently submitted to the United States Department
  of State; and
               (2)  a resume and curriculum vitae that includes:
                     (A)  a list of each postsecondary educational
  institution in which the applicant has been enrolled;
                     (B)  a list of all places of employment since the
  applicant's 18th birthday;
                     (C)  a list of all published materials for which
  the applicant received credit as an author, a researcher, or
  otherwise or to which the applicant contributed significant
  research, writing, or editorial support;
                     (D)  a list of the applicant's current and pending
  research funding from any source, including the source of funding,
  the amount of funding, the applicant's role on the project, and a
  brief description of the research; and
                     (E)  a full disclosure of the applicant's
  professional activities outside of higher education, including any
  affiliation with an institution or program in a foreign adversary.
         (b)  Notwithstanding Subsection (a)(2)(B), an applicant who
  has been continuously employed or enrolled in a postsecondary
  educational institution in the United States for the preceding 20
  years may include in the applicant's resume only the applicant's
  employment history for the preceding 20 years.
         (c)  An institution of higher education may destroy or return
  to an applicant the copy of the applicant's nonimmigrant visa
  application submitted under Subsection (a)(1) after extracting all
  information relevant to the requirements of this subchapter.
         Sec. 51B.153.  RESEARCH INTEGRITY OFFICE. (a) The chief
  administrative officer of an institution of higher education shall
  establish a research integrity office to:
               (1)  review the materials submitted to the institution
  by an applicant under Section 51B.152; and 
               (2)  take reasonable steps to verify the information in
  the application, including by:
                     (A)  searching public databases for research
  publications and presentations and public conflict of interest
  records to identify any research publication or presentation that
  may have been omitted from the application;
                     (B)  contacting each of the applicant's employers
  during the preceding 10 years to verify employment;
                     (C)  contacting each postsecondary educational
  institution the applicant attended to verify enrollment and
  educational progress;
                     (D)  searching public listings of persons subject
  to sanctions or restrictions under federal law;
                     (E)  submitting the applicant's name and other
  identifying information to the Federal Bureau of Investigation or
  another federal agency for screening related to national security
  or counterespionage; and
                     (F)  taking any other action the office considers
  appropriate.
         (b)  An institution of higher education may direct the
  research integrity office to approve applicants for hire using a
  risk-based determination that considers the nature of the research
  and the applicant's background and ongoing affiliations.
         (c)  An institution of higher education must complete the
  requirements of this subchapter before:
               (1)  interviewing or offering a position to an
  applicant described by Section 51B.151(a) in a research or
  research-related support position; or
               (2)  granting the applicant access to research data or
  activities or other sensitive data.
         (d)  An institution of higher education may not employ an
  applicant subject to screening under Section 51B.151(a) in a
  research or research-related support position if the applicant
  fails to disclose in the application a substantial educational,
  employment, or research-related activity or publication or
  presentation unless the applicable department head or the
  department head's designee certifies in writing the substance of
  the failure to disclose and the reasons for disregarding that
  failure.  A copy of the certification must be kept in the
  investigative file of the research integrity office and must be
  submitted to the nearest Federal Bureau of Investigation field
  office.
         (e)  The research integrity office shall report to the
  nearest Federal Bureau of Investigation field office, and to any
  law enforcement agency designated by the governor or the
  institution of higher education's governing board, the identity of
  an applicant who is rejected for employment based on the screening
  required by this subchapter or other risk-based screening.
  SUBCHAPTER E. FOREIGN TRAVEL: RESEARCH INSTITUTIONS
         Sec. 51B.201.  FOREIGN TRAVEL: RESEARCH INSTITUTIONS.  (a)
  An institution of higher education shall establish an international
  travel approval and monitoring program.
         (b)  The program must require, in addition to any other
  travel approval process required by the institution of higher
  education, preapproval from the institution's research integrity
  office established under Section 51B.153 for any
  employment-related foreign travel or activities by a faculty
  member, researcher, or research department staff member of the
  institution.
         (c)  A research integrity office may preapprove travel or
  activities under the program only if the applicant:
               (1)  reviews and acknowledges guidance published by the
  institution of higher education that relates to foreign adversaries
  or countries under sanctions or other restrictions by this state or
  the United States government, including:
                     (A)  federal license requirements; 
                     (B)  customs rules;
                     (C)  export controls;
                     (D)  restrictions on taking institution of higher
  education property, including intellectual property, abroad;
                     (E)  restrictions on presentations, teaching, and
  interactions with foreign colleagues; and
                     (F)  other subjects important to the research and
  academic integrity of the institution of higher education; and
               (2)  agrees to comply with the institution of higher
  education's limitations on travel and activities abroad and all
  applicable federal laws.
         Sec. 51B.202.  MAINTENANCE OF RECORDS AND REPORT. (a) An
  institution of higher education shall maintain for at least three
  years, or any longer period of time required by applicable federal
  or state law, records relating to foreign travel and activities by a
  faculty member, researcher, or research department staff member of
  the institution, including:
               (1)  each foreign travel request and approval;
               (2)  expenses reimbursed by the institution for foreign
  travel, including for travel, food, and lodging;
               (3)  payments and honoraria received during foreign
  travel and activities, including for travel, food, and lodging;
               (4)  a statement of the purpose of each foreign travel;
  and
               (5)  any record related to the foreign activity review.
         (b)  An institution of higher education shall annually
  submit to the institution's governing board a report on foreign
  travel by a faculty member, researcher, or research department
  staff member of the institution to a foreign adversary.  The report
  must list each traveler, foreign location visited, and foreign
  institution visited.
  SUBCHAPTER F. ACADEMIC PARTNERSHIPS
         Sec. 51B.251.  APPROVAL OF CERTAIN ACADEMIC PARTNERSHIPS
  REQUIRED. (a) An institution of higher education may enter into or
  renew an academic partnership with an educational or research
  institution located in a foreign adversary only if the council
  determines that the institution maintains sufficient structural
  safeguards to protect the institution's intellectual property, the
  security of this state, and the national security interests of the
  United States.
         (b)  The council may make a determination described by
  Subsection (a) only if the council determines that the partnership
  includes the following safeguards:
               (1)  compliance with all federal requirements,
  including requirements of:
                     (A)  federal research sponsors and federal export
  control agencies, including regulations regarding international
  traffic in arms and export administration regulations; and
                     (B)  economic and trade sanctions administered by
  the Office of Foreign Assets Control of the United States
  Department of the Treasury;
               (2)  annual formal institution-level training programs
  for faculty on conflicts of interest and conflicts of commitment;
  and
               (3)  a formalized foreign visitor process and uniform
  visiting scholar agreement.
         (c)  The council may require an institution of higher
  education to reject or terminate an academic partnership described
  by Subsection (a) at any time and for any reason.
         (d)  Not later than December 1 of each year, the council
  shall submit to the governor, the lieutenant governor, and the
  speaker of the house of representatives a report detailing the
  total number of academic partnerships that were entered into or
  renewed and the total number of academic partnerships that the
  council rejected or terminated in the 12 months preceding the date
  of the report.
  SUBCHAPTER G. FOREIGN ADVERSARY SOFTWARE AND EDUCATION SERVICES
         Sec. 51B.301.  REVIEW OF EDUCATION SOFTWARE. (a) An
  institution of higher education shall:
               (1)  conduct a thorough review of the use by the
  institution of testing, tutoring, or other education software owned
  or controlled by a foreign adversary or a company domiciled or
  headquartered in a foreign adversary; and
               (2)  develop a plan to eliminate the use of education
  software described by Subdivision (1).
         (b)  An institution of higher education may not enter into or
  renew a contract to provide testing, tutoring, or other education
  software with a foreign adversary or a company domiciled or
  headquartered in a foreign adversary.
  SUBCHAPTER H. ENFORCEMENT
         Sec. 51B.351.  ENFORCEMENT. (a) An institution of higher
  education may not spend money appropriated to the institution for a
  state fiscal year until the governing board of the institution
  submits to the governor, the legislature, the coordinating board,
  and the council a report certifying the governing board's
  compliance with this chapter during the preceding state fiscal
  year. 
         (b)  In the interim between each regular session of the
  legislature, the governing board of each institution of higher
  education, or the board's designee, shall testify before the
  standing legislative committees with primary jurisdiction over
  higher education at a public hearing of the committee regarding the
  board's compliance with this chapter.
         (c)  The state auditor shall periodically conduct a
  compliance audit of each institution of higher education to
  determine whether the institution has spent state money in
  violation of this section. The state auditor shall adopt a schedule
  by which the state auditor will conduct compliance audits under
  this subsection. The schedule must ensure that each institution of
  higher education is audited at least once every four years.
         (d)  If the state auditor determines pursuant to a compliance
  audit conducted under Subsection (c) that an institution of higher
  education has spent state money in violation of this section, the
  institution:
               (1)  must cure the violation not later than the 180th
  day after the date on which the determination is made; and
               (2)  if the institution fails to cure the violation
  during the period described by Subdivision (1), is ineligible to
  receive formula funding increases, institutional enhancements, or
  exceptional items during the state fiscal biennium immediately
  following the state fiscal biennium in which the determination is
  made.
         SECTION 3.  Section 31.05(a), Penal Code, is amended by
  adding Subdivisions (2-a), (2-b), and (2-c) to read as follows:
               (2-a)  "Foreign agent" means an officer, employee,
  proxy, servant, delegate, or representative of a foreign
  government.
               (2-b)  "Foreign government" has the meaning assigned by
  Section 51B.001, Education Code.
               (2-c)  "Foreign instrumentality" means an agency,
  bureau, ministry, component, institution, association, or legal,
  commercial, or business organization, corporation, firm, or entity
  that is substantially owned, controlled, sponsored, commanded,
  managed, or dominated by a foreign government.
         SECTION 4.  Section 31.05(c), Penal Code, is amended to read
  as follows:
         (c)  An offense under this section is a felony of the third
  degree, except that the offense is a felony of the second degree if
  it is shown on the trial of the offense that the person who
  committed the offense intended to benefit a foreign agent, foreign
  government, or foreign instrumentality.
         SECTION 5.  (a) Not later than October 1, 2025, the
  appropriate entities shall designate the members of the Higher
  Education Research Security Council established under Section
  51.957, Education Code, as added by this Act.
         (b)  Not later than January 1, 2026, the Higher Education
  Research Security Council established under Section 51.957,
  Education Code, as added by this Act, shall hold its initial
  meeting.
         SECTION 6.  Section 51B.052, Education Code, as added by
  this Act, applies only to a contract for which the request for bids
  or proposals or other applicable expression of interest is made
  public on or after the effective date of this Act. A contract for
  which the request for bids or proposals or other applicable
  expression of interest is made public before that date is governed
  by the law in effect on the date the request or other expression of
  interest is made public, and the former law is continued in effect
  for that purpose.
         SECTION 7.  The changes in law made by this Act apply only to
  an offense committed on or after the effective date of this Act. An
  offense committed before the effective date of this Act is governed
  by the law in effect on the date the offense was committed, and the
  former law is continued in effect for that purpose.  For purposes of
  this section, an offense was committed before the effective date of
  this Act if any element of the offense occurred before that date.
         SECTION 8.  Section 51B.351(a), Education Code, as added by
  this Act, applies beginning with money appropriated to a public
  institution of higher education for the state fiscal year beginning
  September 1, 2026.
         SECTION 9.  This Act takes effect September 1, 2025.