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A BILL TO BE ENTITLED
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AN ACT
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relating to a prohibition on state contracts to purchase electric |
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vehicles and related components produced in scrutinized countries; |
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authorizing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle F, Title 10, Government Code, is |
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amended by adding Chapter 2278 to read as follows: |
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CHAPTER 2278. PROHIBITION ON STATE CONTRACTS FOR ELECTRIC VEHICLES |
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AND RELATED COMPONENTS PRODUCED IN SCRUTINIZED COUNTRIES |
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Sec. 2278.001. DEFINITIONS. In this chapter: |
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(1) "Company" means a sole proprietorship, |
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organization, association, corporation, partnership, joint |
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venture, limited partnership, limited liability partnership, or |
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limited liability company, including a wholly owned subsidiary, |
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majority-owned subsidiary, parent company, or affiliate of those |
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entities or business associations, that exists to make a profit. |
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(2) "Electric vehicle" means a motor vehicle that |
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draws propulsion energy only from a rechargeable energy storage |
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system. |
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(3) "Forced labor or services" has the meaning |
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assigned by Section 20A.01, Penal Code. |
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(4) "Nonprofit organization" means an entity that is |
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exempt from federal income tax under Section 501(a), Internal |
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Revenue Code of 1986, by being listed as an exempt entity under |
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Section 501(c) of that code, has submitted an application with the |
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Internal Revenue Service for recognition of an exemption under |
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Section 501(c) of that code, or is a nonprofit corporation or |
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association organized or formed under the laws of this state or |
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another state. |
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(5) "Scrutinized country" means the People's Republic |
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of China. |
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Sec. 2278.002. PROVISION REQUIRED IN STATE CONTRACTS. (a) |
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A state agency may not enter into a contract with a vendor to |
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purchase an electric vehicle or any component of an electric |
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vehicle unless the contract contains a written verification from |
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the vendor that: |
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(1) the vendor is not: |
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(A) a company organized under the laws of or |
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headquartered in a scrutinized country; |
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(B) a company owned, operated, or directly |
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controlled by the government of a scrutinized country; |
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(C) a nonprofit organization or |
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government-organized nongovernmental organization organized under |
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the laws of or headquartered in a scrutinized country; or |
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(D) a company or nonprofit organization that |
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subcontracts with a company or organization described by Paragraphs |
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(A)-(C) for production of any component of an electric vehicle; |
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(2) the electric vehicle or component of an electric |
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vehicle was not mined, produced, or manufactured wholly or partly |
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in a scrutinized country; or |
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(3) the vendor or any subcontractor of the vendor has |
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not used forced labor or services in the production of the electric |
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vehicle or component. |
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(b) The prohibitions described by Subsection (a) apply |
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regardless of whether: |
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(1) the company's or its parent company's securities |
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are publicly traded; or |
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(2) the company or its parent company is listed on a |
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public stock exchange as a company of a scrutinized country. |
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Sec. 2278.003. CONTRACT TERMINATION FOR FALSE |
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VERIFICATION; BARRING FROM STATE CONTRACTS. (a) If a state agency |
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determines that a vendor holding a contract with the state agency |
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was ineligible for the contract awarded under Section 2278.002 |
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because the vendor's written verification was false, the state |
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agency shall immediately terminate the contract without further |
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obligation to the vendor. |
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(b) A vendor described by Subsection (a) is barred from |
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responding to a solicitation for or contracting for goods or |
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services procured by any state agency. |
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Sec. 2278.004. ATTORNEY GENERAL ENFORCEMENT; CIVIL |
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PENALTY; INJUNCTION. (a) A vendor that is in violation of this |
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chapter is liable for a civil penalty not to exceed $250,000 for |
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each violation. |
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(b) The attorney general may bring an action in the name of |
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this state to: |
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(1) recover a civil penalty under this section; |
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(2) restrain or enjoin the vendor from violating this |
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chapter; or |
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(3) recover the civil penalty and seek injunctive |
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relief. |
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(c) The attorney general may recover reasonable attorney's |
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fees and court costs in bringing an action under this section. |
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SECTION 2. Section 2278.002, Government Code, as added by |
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this Act, applies only to a contract entered into on or after the |
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effective date of this Act. A contract entered into before the |
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effective date of this Act is governed by the law in effect on the |
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date the contract was entered into, and the former law is continued |
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in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2025. |