89R18392 TYPED

By: Hall S.B. No. 2650

A BILL TO BE ENTITLED

AN ACT

relating to certain requirements for participation in the E-verify program; authorizing penalties.

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

ARTICLE 1. CERTAIN REQUIREMENTS FOR PARTICIPATION IN THE FEDERAL

ELECTRONIC VERIFICATION OF EMPLOYMENT AUTHORIZATION PROGRAM, OR

E-VERIFY

SECTION 1.01. The heading to Chapter 2264, Government Code, is amended to read as follows:

CHAPTER 2264. CERTAIN RESTRICTIONS ON [USE OF CERTAIN] PUBLIC

SUBSIDIES AND STATE CONTRACTS

SECTION 1.02. Section 2264.101, Government Code, is transferred to Subchapter B, Chapter 2264, Government Code, redesignated as Section 2264.054, Government Code, and amended to read as follows:

Sec. 2264.054 [2264.101]. RECOVERY. (a) A public agency, local taxing jurisdiction, or economic development corporation, or the attorney general on behalf of the state or a state agency, may bring a civil action to recover any amounts owed to the public agency, state or local taxing jurisdiction, or economic development corporation under this subchapter [chapter].

(b) The public agency, local taxing jurisdiction, economic development corporation, or attorney general, as applicable, shall recover court costs and reasonable attorney's fees incurred in an action brought under Subsection (a).

(c) A business is not liable for a violation of this subchapter [chapter] by a subsidiary, affiliate, or franchisee of the business, or by a person with whom the business contracts.

SECTION 1.03. The heading to Subchapter C, Chapter 2264, Government Code, is amended to read as follows:

SUBCHAPTER C. E-VERIFY PROGRAM [ENFORCEMENT]

SECTION 1.04. Subchapter C, Chapter 2264, Government Code, is amended by adding Sections 2264.1011, 2264.102, 2264.103, 2264.104, and 2264.105 to read as follows:

Sec. 2264.1011. DEFINITIONS. In this subchapter:

(1) "E-verify program" has the meaning assigned by Section 673.001.

(2) "State agency" has the meaning assigned by Section 2103.001.

Sec. 2264.102. VERIFICATION BY CONTRACTORS. (a) A state agency may not award a contract for goods or services within this state to a contractor unless the contractor and any subcontractor register with and participate in the E-verify program to verify employee information. The contractor and any subcontractor must continue to participate in the program during the term of the contract.

(b) Each contract with a state agency must include the following statement:

"______________ (name of contractor) certifies that __________ (name of contractor) is not ineligible to receive this contract under Subchapter C, Chapter 2264, Government Code, and acknowledges that if this certification is inaccurate or becomes inaccurate during the term of the contract, the contractor may be barred from participating in state contracts."

(c) If a state agency determines that a contractor was ineligible to have the contract awarded under Subsection (a), that a contractor has ceased participation in the E-verify program during the term of the contract, or that a subcontractor is not registered with or is not participating in the E-verify program, the state agency shall terminate the contract and refer the matter to the comptroller for action.

(d) Each state agency shall develop procedures for the administration of this section.

Sec. 2264.103. EXCEPTION. A contractor or subcontractor under a contract to which Section 2264.102 applies is not required to verify employee information through the E-verify program during any year for which the federal government has not funded the E-verify program.

Sec. 2264.104. BARRING FROM STATE CONTRACTS. (a) Using procedures prescribed under Section 2155.077, the comptroller may bar a contractor from participating in state contracts if the comptroller determines that the contractor:

(1) was awarded a contract in violation of Section 2264.102;

(2) has ceased participation in the E-verify program during the term of the contract; or

(3) knowingly hired a subcontractor, other than a subcontractor who acts exclusively as a supplier for the contract, to perform work under the contract who is not registered with or is not participating in the E-verify program.

(b) Debarment under this section is for a period of one year except that the debarment may be extended by the comptroller for additional one-year periods if the comptroller determines that the grounds for debarment under this section continue to exist.

(c) It is an affirmative defense to a debarment proceeding under this section that the contractor did not know that a subcontractor hired to perform work under the contract is not registered with or is not participating in the E-verify program.

Sec. 2264.105. CONTRACT TERMINATION. If a state agency terminates a contract for a reason described by Section 2264.102(c), the agency may require the contractor to pay any costs associated with the termination.

SECTION 1.05. Subtitle B, Title 2, Labor Code, is amended by adding Chapter 53 to read as follows:

CHAPTER 53. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 53.001. DEFINITIONS. In this chapter:

(1) "Commission" means the Texas Workforce Commission.

(2) "Employee" means an individual who is employed by an employer for compensation. The term includes an individual employed on a part-time basis.

(3) "Employer" means a person, other than a governmental entity or a sole proprietorship, who:

(A) employs one or more employees; or

(B) acts directly or indirectly in the interests of an employer in relation to an employee.

(4) "Employment" means any service, including service in interstate commerce, that is performed for wages or under a contract of hire, whether written or oral or express or implied. The term does not include any service performed by an individual for wages if it is shown that the individual is free from control or direction in the performance of the service, both under any contract of service and in fact.

(5) "E-verify program" has the meaning assigned by Section 673.001, Government Code.

(6) "Person not lawfully present" means a person who, at the time of employment, is not:

(A) a citizen or national of the United States; or

(B) an alien who is lawfully admitted for permanent residence in the United States under the federal Immigration and Nationality Act (8 U.S.C. Section 1101 et seq.) or authorized to be employed by that Act or the United States attorney general.

Sec. 53.002. EMPLOYEE STATUS. An employer may not classify an individual performing services for the employer as an independent contractor instead of as an employee of the employer solely for the purpose of avoiding the requirements applicable to an employer under this chapter.

Sec. 53.003. VERIFICATION AND RECORDS. (a) An employer shall register and participate in the E-verify program to verify information of all new employees.

(b) The employer must verify a new employee's information not later than the third business day of the employee's employment. If the E-verify program is unavailable during the first three business days of the new employee's employment, the employer must verify the employee's information by submitting the employment eligibility verification form commonly referred to as the I-9 to the appropriate governmental entity.

(c) An employer shall maintain a record of an employee verification for at least three years.

Sec. 53.004. EXCEPTION. (a) An employer is not required to verify employee information through the E-verify program during any year for which the federal government has not funded the E-verify program.

(b) For purposes of this section, Section 2264.103, Government Code, and Section 181.003, Local Government Code, the commission shall:

(1) monitor whether the federal government has funded the E-verify program for the current year; and

(2) maintain in a conspicuous location on the commission's Internet website updated information regarding whether the federal government has funded the E-verify program for the current year.

Sec. 53.005. ENFORCEMENT BY STATE AGENCIES; RULES. (a) Notwithstanding any other law, each appropriate state agency shall ensure that employers in this state comply with Section 53.003 and may require compliance with that section as a condition of a license, certificate, registration, permit, or other authorization issued by the agency that is required for a person to practice or engage in a particular business, occupation, or profession in this state.

(b) Notwithstanding any other law, if a state agency that issues a license, certificate, registration, permit, or other authorization for a person to practice or engage in a particular business, occupation, or profession in this state determines that an employer's failure to comply with Section 53.003 has resulted in the employer's employment of a person not lawfully present, the state agency may:

(1) suspend or revoke any license, certificate, registration, permit, or other authorization issued by the agency to the employer, as follows:

(A) for an employer who employs at least one but not more than 10 persons not lawfully present, suspension for 30 days;

(B) for an employer who employs at least 11 but not more than 50 persons not lawfully present, suspension for 60 days; and

(C) for an employer who employs 51 or more persons not lawfully present, permanent revocation; and

(2) if applicable, require the employer to pay back any economic development funds received as part of an economic development program administered by this state.

(c) A proceeding under Subsection (b) is subject to Chapter 2001, Government Code.

(d) Each appropriate state agency shall adopt rules and prescribe forms as necessary to implement this section.

SECTION 1.06. Subtitle C, Title 5, Local Government Code, is amended by adding Chapter 181 to read as follows:

CHAPTER 181. VERIFICATION OF EMPLOYEE INFORMATION

Sec. 181.001. DEFINITIONS. In this chapter:

(1) "E-verify program" has the meaning assigned by Section 673.001, Government Code.

(2) "Political subdivision" means a county, municipality, school district, junior college district, other special district, or other subdivision of state government.

Sec. 181.002. VERIFICATION AND RECORDS. (a) A political subdivision shall register and participate in the E-verify program to verify information of all new employees.

(b) The political subdivision must verify a new employee's information not later than the third business day of the employee's employment. If the E-verify program is unavailable during the first three business days of the new employee's employment, the political subdivision must verify the employee's information by submitting the employment eligibility verification form commonly referred to as the I-9 to the appropriate governmental entity.

(c) A political subdivision shall maintain a record of an employee verification for at least three years.

Sec. 181.003. EXCEPTION. A political subdivision is not required to verify employee information through the E-verify program during any year for which the federal government has not funded the E-verify program.

Sec. 181.004. TERMINATION OF EMPLOYMENT. An employee of a political subdivision who is responsible for verifying information of new employees of the political subdivision as required by Section 181.002 is subject to immediate termination of employment if the employee fails to comply with that section.

ARTICLE 2. TRANSITIONS AND EFFECTIVE DATE

SECTION 2.01. Each state agency subject to Subchapter C, Chapter 2264, Government Code, as amended by this Act, shall develop the procedures required under Section 2264.102(d), Government Code, as added by this Act, not later than December 31, 2026.

SECTION 2.02. Sections 2264.1011, 2264.102, 2264.103, 2264.104, and 2264.105, Government Code, as added by this Act, apply only in relation to a contract entered into on or after January 1, 2027.

SECTION 2.03. As soon as practicable after the effective date of this Act, each appropriate state agency subject to Section 53.005, Labor Code, as added by this Act, shall adopt rules and prescribe forms as required by that section.

SECTION 2.04. Sections 53.003, Labor Code, and 181.002, Local Government Code, as added by this Act, apply beginning January 1, 2027.

SECTION 2.05. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2025.