SB2117 - Relating to the establishment of the Texas Committee on Foreign Investment to review certain transactions involving certain foreign entities in coordination with the attorney general; creating a civil penalty.

  89R28753 RDS-F     By: Parker, et al. S.B. No. 2117     (Lambert, et al.)     Substitute the following for S.B. No. 2117:  No.       A BILL TO BE ENTITLED   AN ACT   relating to the establishment of the Texas Committee on Foreign   Investment to review certain transactions involving certain   foreign entities in coordination with the attorney general;   creating a civil penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle B, Title 4, Government Code, is amended   by adding Chapter 426 to read as follows:   CHAPTER 426. TEXAS COMMITTEE ON FOREIGN INVESTMENT   SUBCHAPTER A. GENERAL PROVISIONS           Sec. 426.001.  DEFINITIONS. In this chapter:                 (1)     "Committee" means the Texas Committee on Foreign   Investment.                 (2)     "Control" means, with respect to an entity, the   direct or indirect power, whether or not exercised, to:                       (A)  direct the activities of the entity;                       (B)     make or direct others to make legal   commitments on behalf of the entity; or                       (C)     hire or fire a principal decision-maker of   the entity.                 (3)     "Covered transaction" means a foreign transaction   that is subject to this chapter in accordance with rules adopted   under Section 426.101.                 (4)     "Critical infrastructure" means infrastructure in   one of the following categories:                       (A)  chemical;                       (B)  commercial facilities;                       (C)  communications;                       (D)  critical manufacturing;                       (E)  dams;                       (F)  defense industrial bases;                       (G)  emergency services;                       (H)  energy;                       (I)  financial services;                       (J)  food and agriculture;                       (K)  government facilities;                       (L)  health care and public health;                       (M)  information technology;                       (N)  nuclear reactors, materials, and waste;                       (O)  transportation systems; or                       (P)  water and wastewater systems.                 (5)     "Foreign transaction" means a merger or   acquisition, including a merger or acquisition carried out through   a joint venture, by or with a scrutinized foreign entity that   results in control of a business, real property, or another asset   located in this state by the scrutinized foreign entity.                 (6)     "Mitigation agreement" means an agreement   proposed by the attorney general in the manner provided by   Subchapter C to mitigate a national security risk arising from a   covered transaction.   The term includes an amended mitigation   agreement proposed by the attorney general under Section 426.103.                 (7)  "Scrutinized foreign entity" means:                       (A)  a person who is not:                             (i)     a citizen or national of the United   States; or                             (ii)     an alien who is lawfully admitted for   residence in the United States under the federal Immigration and   Nationality Act (8 U.S.C. Section 1101 et seq.);                       (B)  a foreign government; or                       (C)  a business entity:                             (i)     organized in a foreign country that is   not listed by the Office of the United States Trade Representative   as a signatory to a trade agreement with the United States or under   the laws of a foreign government of a country that is not listed by   the Office of the United States Trade Representative as a signatory   to a trade agreement with the United States;                             (ii)     that has its principal place of   business in a foreign country that is not listed by the Office of   the United States Trade Representative as a signatory to a trade   agreement with the United States; or                             (iii)     controlled by an entity described by   Subparagraph (i) or (ii).                 (8)     "Sensitive personal data" means information,   including health, financial, or biometric information, that may   pose a threat to public safety if obtained by a scrutinized foreign   entity, including by exploiting the information to cause harm or   coerce an individual to perform an act on behalf of the entity.                 (9)     "Trade agreement" means any of the following   bilateral, multilateral, or plurilateral trade agreements, as   negotiated by the Office of the United States Trade Representative   and entered into by the United States:                       (A)  a trade and investment agreement;                       (B)  a trade in services agreement; or                       (C)  an environmental goods agreement.           Sec.   426.002.     APPLICABILITY. This chapter does not apply   to:                 (1)     a transaction governed exclusively by federal law,   including an international agreement between the United States and   a foreign nation;                 (2)     a transaction for which notice has been submitted   to the federal Committee on Foreign Investment in the United States   in the manner provided by 50 U.S.C. Section 4565(b)(1)(C);                 (3)     a foreign transaction consisting solely of a   passive ownership interest in an entity that does not result in   control of the entity by a scrutinized foreign entity;                 (4)     the sale, transfer, or other acquisition of real   property intended for residential use; or                   (5)     the creation, transfer, sale, or other acquisition   of a public security interest that does not grant rights to a   scrutinized foreign entity exceeding those held by other   shareholders.   SUBCHAPTER B. TEXAS COMMITTEE ON FOREIGN INVESTMENT           Sec.   426.051.     COMMITTEE; MEMBERSHIP.   (a)   The Texas   Committee on Foreign Investment is established to facilitate the   review of certain foreign transactions as provided by this chapter.           (b)  The committee is composed of the following members:                 (1)     a representative from the office of the secretary   of state appointed by the secretary of state, who shall serve as   chair;                 (2)  the following officers or their designees:                       (A)  the attorney general;                       (B)  the land commissioner;                       (C)  the comptroller; and                       (D)  the commissioner of agriculture; and                 (3)     the heads of the following agencies or their   designees:                       (A)  the Department of Public Safety;                       (B)  the Public Utility Commission of Texas;                       (C)     the Department of Information Resources, or   its successor in functions relating to cybersecurity; and                       (D)  the Railroad Commission of Texas.           Sec.   426.052.     SUNSET PROVISION.     The committee is subject   to Chapter 325 (Texas Sunset Act).   Unless continued in existence     as provided by that chapter, the committee is abolished and this   chapter expires September 1, 2035.   SUBCHAPTER C. REVIEW OF CERTAIN TRANSACTIONS           Sec.   426.101.     FOREIGN TRANSACTIONS SUBJECT TO REVIEW;   PUBLICATION OF CRITERIA.   (a)   The secretary of state, in   consultation with the committee, shall by rule adopt criteria for   determining whether a foreign transaction is subject to this   chapter. The criteria must be consistent with criteria established   under 50 U.S.C. Section 4565 and provide that a foreign transaction   is subject to this chapter if the transaction:                 (1)     exceeds the minimum dollar value or the minimum   ownership percentage as determined by the secretary of state; and                 (2)  affects at least one of the following concerns:                       (A)  critical infrastructure in this state;                 & [Text truncated for display. Full text available on LegiScan.]