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.