89R12736 CXP-D     By: Bettencourt S.B. No. 2821       A BILL TO BE ENTITLED   AN ACT   relating to contracts with and the acceptance of money from certain   foreign sources by public schools and public institutions of higher   education; providing civil penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter D, Chapter 11, Education Code, is   amended by adding Sections 11.1561 and 11.1562 to read as follows:          Sec. 11.1561.  PROHIBITION ON CONTRACTS WITH OR ACCEPTANCE   OF MONEY FROM FOREIGN ADVERSARIES. (a) In this section:                (1)  "Contract" includes:                      (A)  an agreement involving the exchange of   faculty, staff, or students through any form of collaboration,   including a research partnership, joint academic program, faculty   or staff exchange, study abroad program, or student exchange   program; and                      (B)  an arrangement involving the transfer or   sharing of intellectual property or proprietary information.                (2)  "Foreign adversary" means:                      (A)  the People's Republic of China;                      (B)  the Islamic Republic of Iran;                      (C)  the Democratic People's Republic of Korea;                      (D)  the Russian Federation; or                      (E)  any other country designated as a country of   particular concern in the United States secretary of state's most   recent designations under the International Religious Freedom Act   of 1998 (22 U.S.C. Section 6401 et seq.).          (b)  Notwithstanding any other law, a school district may not   enter into a contract with or solicit or accept a gift or donation   made by or on behalf of:                (1)  a foreign adversary;                (2)  a company or other entity that is:                      (A)  organized under the laws of a foreign   adversary or that has its principal place of business in the   territory of or controlled by a foreign adversary; or                      (B)  owned by or the majority of stock or other   ownership interest of which is held or controlled by a foreign   adversary or individuals who are citizens of a foreign adversary;                (3)  a company or other entity that is owned by or the   majority of stock or other ownership interest of which is held or   controlled by a company or other entity, including a governmental   entity, described by Subdivision (2); or                (4)  a charitable organization that is:                      (A)  organized under the laws of a foreign   adversary or that has its principal place of business in the   territory of or controlled by a foreign adversary;                      (B)  owned or controlled by individuals who are   citizens of a foreign adversary; or                      (C)  directly controlled by the government of a   foreign adversary.          (c)  A school district that violates this section is liable   for a civil penalty in an amount of:                (1)  for a first violation, at least 5 percent and not   more than 10 percent of the total amount of money appropriated to   the district for the most recent state fiscal year; and                (2)  for a second or subsequent violation, at least 20   percent of the total amount of money appropriated to the district   for the most recent state fiscal year.          (d)  The attorney general may sue to collect the civil   penalty under Subsection (c). A suit under this subsection may be   filed in a district court in Travis County.          (e)  A school district may not pay a civil penalty imposed   under Subsection (c) using state or federal money.          Sec. 11.1562.  REPORT ON CONTRACTS ENTERED INTO WITH AND   MONEY RECEIVED FROM FOREIGN SOURCES. (a) In this section:                (1)  "Contract" has the meaning assigned by Section   11.1561.                (2)  "Foreign government" means the government or an   agent of any country, nation, or group of nations, or any province   or other political subdivision of a country or nation, other than   the United States government.                (3)  "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 nation or having its principal place of business in a   foreign nation;                      (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)  an agent acting on behalf of an individual or   entity described by Paragraph (A), (B), or (C); or                      (E)  a political party or member of a political   party of a foreign nation.          (b)  Not later than September 1 of each year, a school   district shall submit to the chair of the State Board of Education a   report disclosing each contract with a value of at least $50,000   entered into with and each gift or donation with a value of at least   $50,000 received by or on behalf of:                (1)  a foreign source;                (2)  a company or other entity that is:                      (A)  organized under the laws of a foreign nation   or that has its principal place of business in a foreign nation; or                      (B)  owned by or the majority of stock or other   ownership interest of which is held or controlled by a foreign   nation or individuals who are citizens of a foreign nation;                (3)  a company or other entity that is owned by or the   majority of stock or other ownership interest of which is held or   controlled by a company or other entity, including a governmental   entity, described by Subdivision (2); or                (4)  a charitable organization that is:                      (A)  organized under the laws of a foreign nation   or that has its principal place of business in a foreign nation;                      (B)  owned or controlled by citizens of a foreign   nation; or                      (C)  directly controlled by a foreign nation.          (c)  If an entity described by Subsection (b) enters into   more than one contract with or provides more than one gift or   donation to a school district in a calendar year and the total value   of the contracts, gifts, or donations is at least $50,000, the   district shall report the contracts, gifts, or donations under   Subsection (b).          (d)  For each contract, gift, or donation required to be   reported under this section, a school district must include in the   report the following information, unless the disclosure of that   information is prohibited or the information is confidential under   federal or state law:                (1)  the date the district entered into the contract or   received the gift or donation;                (2)  the value of the contract, gift, or donation;                (3)  the purpose of the contract, gift, or donation;                (4)  the persons the contract, gift, or donation is   explicitly intended to benefit;                (5)  any applicable condition, requirement,   restriction, or term made a part of the contract, gift, or donation;                (6)  the foreign source's name and country of residence   or domicile;                (7)  the name and mailing address of the person making   the disclosure; and                (8)  the date of termination of the contract, gift, or   donation, if applicable.          (e)  The chair of the State Board of Education shall provide   to the agency a copy of each report submitted under this section.   The agency shall post on the agency's Internet website each of those   reports.          (f)  A school district that violates this section is liable   for a civil penalty in an amount equal to the sum of the cost to the   state of obtaining the district's compliance with this section,   including costs associated with investigation and enforcement,   and:                (1)  for a first violation, the greater of $50,000 or   the value of the unreported contract, gift, or donation; and                (2)  for a second or subsequent violation, the greater   of $100,000 or twice the value of the unreported contract, gift, or   donation.          (g)  The attorney general may sue to collect the civil   penalty under Subsection (f). A suit under this subsection may be   filed in a district court in Travis County.          (h)  A school district may not pay a civil penalty imposed   under Subsection (f) using state or federal money.          SECTION 2.  Section 12.013(b), Education Code, is amended to   read as follows:          (b)  A home-rule school district is subject to:                (1)  a provision of this title establishing a criminal   offense;                (2)  a provision of this title relating to limitations   on liability; and                (3)  a prohibition, restriction, or requirement, as   applicable, imposed by this title or a rule adopted under this   title, relating to:                      (A)  the Public Education Information Management   System (PEIMS) to the extent necessary to monitor compliance with   this subchapter as determined by the commissioner;                      (B)  educator certification under Chapter 21 and   educator rights under Sections 21.407, 21.408, and 22.001;                      (C)  criminal history records under Subchapter C,   Chapter 22;                      (D)  student admissions under Section 25.001;                      (E)  school attendance under Sections 25.085,   25.086, and 25.087;                      (F)  inter-district or inter-county transfers of   students under Subchapter B, Chapter 25;                      (G)  elementary class size limits under Section   25.112, in the case of any campus in the district that fails to   satisfy any standard under Section 39.054(e);                      (H)  high school graduation under Section 28.025;                      (I)  special education programs under Subchapter   A, Chapter 29;                      (J)  bilingual education under Subchapter B,   Chapter 29;                      (K)  prekindergarten programs under Subchapter E,   Chapter 29;                      (L)  safety provisions relating to the   transportation of students under Sections 34.002, 34.003, 34.004,   and 34.008;                      (M)  computation and distribution of state aid   under Chapters 31, 43, and 48;                      (N)  extracurricular activities under Section   33.081;                      (O)  health and safety under Chapter 38;                      (P)  the provisions of Subchapter A, Chapter 39;                      (Q)  public school accountability and special   investigations under Subchapters A, B, C, D, and J, Chapter 39, and   Chapter 39A;                      (R)  options for local revenue levels in excess of   entitlement under Chapter 49;                      (S)  a bond or other obligation or tax rate under   Chapters 43, 45, and 48;                      (T)  purchasing under Chapter 44; [and]                      (U)  parental options to retain a student under   Section 28.02124; and                      (V)  contracting and the acceptance of money from   foreign sources and the reporting of those acts under Sections   11.1561 and 11.1562.          SECTION 3.  Section 12.056(b), Education Code, is amended to   read as follows:          (b)  A campus or program for which a charter is granted under   this subchapter is subject to:                (1)  a provision of this title establishing a criminal   offense; and                (2)  a prohibition, restriction, or requirement, as   applicable, imposed by this title or a rule adopted under this   title, relating to:                      (A)  the Public Education Information Management   System (PEIMS) to the extent necessary to monitor compliance with   this subchapter as determined by the commissioner;                      (B)  criminal history records under Subchapter C,   Chapter 22;                      (C)  high school graduation under Section 28.025;                      (D)  special education programs under Subchapter   A, Chapter 29;                      (E)  bilingual education under Subchapter B,   Chapter 29;                      (F)  prekindergarten programs under Subchapter E,   Chapter 29, except class size limits for prekindergarten classes   imposed under Section 25.112, which do not apply;                      (G)  extracurricular activities under Section   33.081;                      (H)  health and safety under Chapter 38;                      (I)  the provisions of Subchapter A, Chapter 39;                      (J)  public school accountability and special   investigations under Subchapters A, B, C, D, F, and J, Chapter 39,   and Chapter 39A;                      (K)  the duty to discharge or refuse to hire   certain employees or applicants for employment under Section   12.1059; [and]                      (L)  parental options to retain a student under   Section 28.02124; and                      (M)  contracting and the acceptance of money from   foreign sources and the reporting of those acts under Sections   11.1561 and 11.1562.          SECTION 4.  Section 12.104(b), Education Code, is amended to   read as follows:          (b)  An open-enrollment charter school is subject to:                (1)  a provision of this title establishing a criminal   offense;                (2)  the provisions in Chapter 554, Government Code;   and                (3)  a prohibition, restriction, or requirement, as   applicable, imposed by this title or a rule adopted under this   title, relating to:                      (A)  the Public Education Information Management   System (PEIMS) to the extent necessary to monitor compliance with   this subchapter as determined by the commissioner;                      (B)  criminal history records under Subchapter C,   Chapter 22;                      (C)  reading instruments and accelerated reading   instruction programs under Section 28.006;                      (D)  accelerated instruction under Section   28.0211;                      (E)  high school graduation requirements under   Section 28.025;                      (F)  special education programs under Subchapter   A, Chapter 29;                      (G)  bilingual education under Subchapter B,   Chapter 29;                      (H)  prekindergarten programs under Subchapter E   or E-1, Chapter 29, except class size limits for prekindergarten   classes imposed under Section 25.112, which do not apply;                      (I)  extracurricular activities under Section   33.081;                      (J)  discipline management practices or behavior   management techniques under Section 37.0021;                      (K)  health and safety under Chapter 38;                      (L)  the provisions of Subchapter A, Chapter 39;                      (M)  public school accountability and special   investigations under Subchapters A, B, C, D, F, G, and J, Chapter   39, and Chapter 39A;                      (N)  the requirement under Section 21.006 to   report an educator's misconduct;                      (O)  intensive programs of instruction under   Section 28.0213;                      (P)  the right of a school employee to report a   crime, as provided by Section 37.148;                      (Q)  bullying prevention policies and procedures   under Section 37.0832;                      (R)  the right of a school under Section 37.0052   to place a student who has engaged in certain bullying behavior in a   disciplinary alternative education program or to expel the student;                      (S)  the right under Section 37.0151 to report to   local law enforcement certain conduct constituting assault or   harassment;                      (T)  a parent's right to information regarding the   provision of assistance for learning difficulties to the parent's   child as provided by Sections 26.004(b)(11) and 26.0081(c) and (d);                      (U)  establishment of residency under Section   25.001;                      (V)  school safety requirements under Sections   37.0814, 37.108, 37.1081, 37.1082, 37.1083, 37.1084, 37.1085,   37.1086, 37.109, 37.113, 37.114, 37.1141, 37.115, 37.207, and   37.2071 and Subchapter J, Chapter 37;                      (W)  the early childhood literacy and mathematics   proficiency plans under Section 11.185;                      (X)  the college, career, and military readiness   plans under Section 11.186; [and]                      (Y)  parental options to retain a student under   Section 28.02124; and                      (Z)  contracting and the acceptance of money from   foreign sources and the reporting of those acts under Sections   11.1561 and 11.1562.          SECTION 5.  Subchapter Z, Chapter 51, Education Code, is   amended by adding Sections 51.985 and 51.986 to read as follows:          Sec. 51.985.  PROHIBITION ON CONTRACTS WITH OR ACCEPTANCE OF   MONEY FROM FOREIGN ADVERSARIES. (a) In this section:                (1)  "Affiliate organization" means an entity under the   control of or established for the benefit of an institution of   higher education, including a direct-support organization.                (2)  "Contract" and "foreign adversary" have the   meanings assigned by Section 11.1561.                (3)  "Institution of higher education" has the meaning   assigned by Section 61.003.          (b)  Notwithstanding any other law, an institution of higher   education or an affiliate organization may not enter into a   contract with or solicit or accept a gift or donation made by or on   behalf of:                (1)  a foreign adversary;                (2)  a company or other entity that is:                      (A)  organized under the laws of a foreign   adversary or that has its principal place of business in the   territory of or controlled by a foreign adversary; or                      (B)  owned by or the majority of stock or other   ownership interest of which is held or controlled by a foreign   adversary or individuals who are citizens of a foreign adversary;                (3)  a company or other entity that is owned by or the   majority of stock or other ownership interest of which is held or   controlled by a company or other entity, including a governmental   entity, described by Subdivision (2); or                (4)  a charitable organization that is:                      (A)  organized under the laws of a foreign   adversary or that has its principal place of business in the   territory of or controlled by a foreign adversary;                      (B)  owned or controlled by citizens of a foreign   adversary; or                      (C)  directly controlled by the government of a   foreign adversary.          (c)  An institution of higher education or affiliate   organization that violates this section is liable for a civil   penalty in an amount of:                (1)  for a first violation, at least 5 percent and not   more than 10 percent of the total amount of money appropriated to   the institution or organization for the most recent state fiscal   year; and                (2)  for a second or subsequent violation, at least 20   percent of the total amount of money appropriated to the   institution or organization for the most recent state fiscal year.          (d)  The attorney general may sue to collect the civil   penalty under Subsection (c). A suit under this subsection may be   filed in a district court in Travis County.          (e)  An institution of higher education or affiliate   organization may not pay a civil penalty imposed under Subsection   (c) using state or federal money.          Sec. 51.986.  REPORT ON CONTRACTS ENTERED INTO WITH AND   MONEY RECEIVED FROM FOREIGN NATIONS. (a) In this section:                (1)  "Affiliate organization" and "contract" have the   meanings assigned by Section 51.985.                (2)  "Board" and "institution of higher education" have   the meanings assigned by Section 61.003.                (3)  "Foreign source" has the meaning assigned by   Section 11.1562.          (b)  Not later than September 1 of each year, an institution   of higher education and an affiliate organization shall submit to   the board a report disclosing each contract with a value of at least   $50,000 entered into with and each gift or donation with a value of   at least $50,000 made by or on behalf of:                (1)  the government of a foreign nation;                (2)  a representative of the government of a foreign   nation;                (3)  a company or other entity that is:                      (A)  organized under the laws of a foreign nation   or that has its principal place of business in a foreign nation; or                      (B)  owned by or the majority of stock or other   ownership interest of which is held or controlled by the government   of a foreign nation or individuals who are citizens of a foreign   nation;                (4)  a company or other entity that is owned by or the   majority of stock or other ownership interest of which is held or   controlled by a company or other entity, including a governmental   entity, described by Subdivision (3); or                (5)  a charitable organization that is:                      (A)  organized under the laws of a foreign nation   or that has its principal place of business in a foreign nation;                      (B)  owned or controlled by citizens of a foreign   nation; or                      (C)  directly controlled by the government of a   foreign nation.          (c)  If an entity described by Subsection (b) enters into   more than one contract with or provides more than one gift or   donation to an institution of higher education or an affiliate   organization in a calendar year and the total value of the   contracts, gifts, or donations is at least $50,000, the institution   or organization shall report the contracts, gifts, or donations   under Subsection (b).          (d)  For each contract, gift, or donation required to be   reported under this section, an institution of higher education and   an affiliate organization must include in the report the following   information, unless the disclosure of that information is   prohibited or the information is confidential under federal or   state law:                (1)  the date the institution or organization entered   into the contract or received the gift or donation;                (2)  the value of the contract, gift, or donation;                (3)  the purpose of the contract, gift, or donation;                (4)  the persons the contract, gift, or donation is   explicitly intended to benefit;                (5)  any applicable condition, requirement,   restriction, or term made a part of the contract, gift, or donation;                (6)  the foreign source's name and country of residence   or domicile;                (7)  the name and mailing address of the person making   the disclosure; and                (8)  the date of termination of the contract, gift, or   donation, if applicable.          (e)  The board shall post on the board's Internet website   each report submitted under this section.          (f)  An institution of higher education or affiliate   organization that violates this section is liable for a civil   penalty in an amount equal to the sum of the cost to the state of   obtaining the institution's or organization's compliance with this   section, including costs associated with investigation and   enforcement, and:                (1)  for a first violation, the greater of $50,000 or   the value of the unreported contract, gift, or donation; and                (2)  for a second or subsequent violation, the greater   of $100,000 or twice the value of the unreported contract, gift, or   donation.          (g)  The attorney general may sue to collect the civil   penalty under Subsection (f). A suit under this subsection may be   filed in a district court in Travis County.          (h)  An institution of higher education or affiliate   organization may not pay a civil penalty imposed under Subsection   (f) using state or federal money.          SECTION 6.  Sections 11.1561 and 51.985, Education Code, as   added by this Act, apply only to a contract entered into on or after   the effective date of this Act. A contract entered into before that   date is governed by the law in effect on the date the contract was   entered into, and the former law is continued in effect for that   purpose.          SECTION 7.  This Act takes effect September 1, 2025.