LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION

April 22, 2025

TO:	Honorable Ken King, Chair, House Committee on State Affairs
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	HB1907 by Paul (Relating to a prohibition on governmental contracts with Chinese companies for certain information and communications technology; authorizing a civil penalty; creating a criminal offense.), As Introduced

The fiscal implications of the bill cannot be determined at this time due to a lack of reliable information on the projected number of state agency contracts associated with scrutinized companies that would be subject to the bill's provisions. 

The bill would prohibit governmental entities from contracting with "scrutinized companies" related to information and communications technology. The bill would define "scrutinized companies" as those affiliated with or controlled by the People's Republic of China.  The bill would identify certain exceptions subject to the approval of the Governor. 

The bill would also create civil penalties, including a state jail felony offense committed when a vendor provides certain false verifications to a governmental entity for contracts relating to information and communications technology.

It is assumed that any impact on state correctional populations or on the demand for state correctional resources would not be significant.

The fiscal implications of the bill cannot be determined at this time due to a lack of reliable information on the projected number of state agency contracts associated with scrutinized companies that would be subject to the bill's provisions. This analysis assumes that any costs associated with administering the bill at the Office of the Governor - Trusteed Programs would not be fiscally significant.

The bill would establish verification requirements for vendors, refer vendor violations for enforcement, authorize civil penalties, and allow for the recover of attorney's fees and court costs. The bill would create a state jail felony offense. The revenue impact would depend on the number and timing of any violations and the amount of civil and criminal penalties imposed. The revenue impact cannot be determined.

Local Government Impact

The fiscal implications of the bill cannot be determined at this time.

It is assumed that any fiscal impact to units of local government associated with enforcement, prosecution, supervision, or confinement would not be significant. 

Source Agencies:

212 Office of Court Administration, Texas Judicial Council, 242 State Commission on Judicial Conduct, 300 Trusteed Programs Within the Office of the Governor, 302 Office of the Attorney General, 303 Facilities Commission, 304 Comptroller of Public Accounts, 320 Texas Workforce Commission, 352 Bond Review Board, 452 Department of Licensing and Regulation, 503 Texas Medical Board, 529 Health and Human Services Commission, 582 Commission on Environmental Quality, 601 Department of Transportation, 701 Texas Education Agency, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration

LBB Staff:

JMc, WP, THO, KTw