Hefner Foreign Actors Bill Reaches Any ‘Affiliated’ Business

The text as introduced · 921 words

By: Hefner
H.B. No. 4865

A BILL TO BE ENTITLED

AN ACT

relating to identification of and sanctions against certain foreign

actors.

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

SECTION 1. Title 7, Government Code, is amended by adding

Chapter 795 to read as follows:

CHAPTER 795. TRACKING AND SANCTIONING CORRUPT FOREIGN ACTORS

Sec. 795.001. ANNUAL REPORT. (a) Not later than September

1 of each year, the secretary of state shall prepare a report that

identifies each foreign actor the secretary determines to have

knowingly engaged in actions that undermine the security and

sovereignty of this state, or in significant corruption or

obstruction of investigations into acts of corruption in the

foreign actor's home country, including:

(1) corruption related to government contracts;

(2) bribery and extortion;

(3) the transfer or facilitation of the transfer of

proceeds of corruption, including through money laundering;

(4) acts of violence, harassment, or intimidation

directed at governmental and nongovernmental corruption

investigators;

(5) engaging in or aiding and abetting drug

trafficking, human trafficking, or corruption across the

Texas-Mexico border; and

(6) facilitating the illegal entry of migrants into

this state from the United Mexican States.

(b) The secretary of state may obtain information necessary

to prepare a report required by Subsection (a) from:

(1) the Office of Foreign Assets Control within the

United States Department of the Treasury;

(2) the office of the attorney general;

(3) the Department of Public Safety;

(4) the comptroller; or

(5) any other state or federal agency having

information the secretary believes necessary to prepare the report.

(c) The secretary of state may notify an individual of the

secretary's intent to identify the individual in the annual report

and the possible ramifications of that identification.

(d) The secretary of state shall adopt rules necessary to

administer this section, including rules establishing a procedure

by which an individual identified in an annual report may seek

expungement of the individual's name from the report.

(e) The secretary of state shall publish the annual report

required by Subsection (a) on the secretary of state's public

Internet website.

Sec. 795.002. IMPOSITION OF SANCTIONS. With respect to

each foreign actor identified in a report required by Section

795.001(a):

(1) the comptroller shall prohibit the identified

individual and any business or other entity affiliated with the

individual from entering into contracts with any state agency or

political subdivision of this state;

(2) the secretary of state shall deny the application

for registration or seek revocation of the registration of any

foreign entity affiliated with the identified individual seeking to

transact business in this state and impose an appropriate civil

penalty as provided by Chapter 9, Business Organizations Code; and

(3) the governing board of an institution of higher

education, as defined by Section 61.003, Education Code, shall deny

admission to the foreign actor as provided by Section 51.811,

Education Code, or expel the foreign actor as provided by Section

51.9092, Education Code.

SECTION 2. Section 9.151(a), Business Organizations Code,

is amended to read as follows:

(a) A court may revoke the registration of a foreign filing

entity if, as a result of an action brought under Section 9.153, the

court finds that one or more of the following problems exist:

(1) the entity did not comply with a condition

precedent to the issuance of the entity's registration or an

amendment to the registration;

(2) the entity's registration or any amendment to the

entity's registration was fraudulently filed;

(3) a misrepresentation of a material matter was made

in an application, report, affidavit, or other document the entity

submitted under this code;

(4) the entity has continued to transact business

beyond the scope of the purpose or purposes expressed in the

entity's registration; [ or ]

(5) public interest requires revocation because:

(A) the entity has been convicted of a felony or a

high managerial agent of the entity has been convicted of a felony

committed in the conduct of the entity's affairs;

(B) the entity or the high managerial agent has

engaged in a persistent course of felonious conduct; and

(C) revocation is necessary to prevent future

felonious conduct of the same character ; or

(6) a high managerial agent of the entity is a foreign

actor identified in the secretary of state's annual report of

corrupt foreign actors published under Chapter 795, Government

Code .

SECTION 3. Subchapter U, Chapter 51, Education Code, is

amended by adding Section 51.811 to read as follows:

Sec. 51.811. PROHIBITION ON ADMISSION OF CERTAIN

PROSPECTIVE STUDENTS CONNECTED WITH CORRUPT FOREIGN ACTIVITIES.

Notwithstanding any other provision of this subchapter, Subchapter

W, or other law, the governing board of an institution of higher

education, as defined by Section 61.003, may not offer admission to

an applicant for admission to the institution or for admission to

any certificate or degree program, including a graduate,

postgraduate, or professional degree program, offered by the

institution, if the applicant is identified in the secretary of

state's annual report of corrupt foreign actors published under

Chapter 795, Government Code.

SECTION 4. Subchapter Z, Chapter 51, Education Code, is

amended by adding Section 51.9092 to read as follows:

Sec. 51.9092. EXPULSION OF CERTAIN STUDENTS CONNECTED WITH

CORRUPT FOREIGN ACTIVITIES. The governing board of an institution

of higher education, as defined by Section 61.003, shall, at least

twice each year, consult the secretary of state's annual report of

corrupt foreign actors published under Chapter 795, Government

Code, and immediately expel any student who is identified in the

report.

SECTION 5. This Act takes effect September 1, 2025.