HB5007 - Relating to the establishment of the Texas Committee on Foreign Investment to review certain transactions involving certain foreign entities; creating a civil penalty.

  89R10974 RDS-F     By: Lambert H.B. No. 5007       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; 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)     "Covered transaction" means a foreign transaction   that is subject to this chapter in accordance with rules adopted   under Section 426.101.                 (3)     "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.                 (4)  "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   permanent 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 or under   the laws of a foreign government;                             (ii)     that has its principal place of   business in a foreign country; or                             (iii)     controlled by an entity described by   this subdivision.                 (5)     "Foreign transaction" means a merger,   acquisition, lease, sale, or other transfer by or to a foreign   entity of the direct or indirect control of or an interest in a   business, real property, or other asset located in this state.                 (6)     "Sensitive personal data" means information,   including health, financial, or biometric information, that may   pose a threat to public safety if obtained by a foreign entity,   including by exploiting the information to cause harm or coerce an   individual to perform an act on behalf of the entity.           Sec.   426.002.     APPLICABILITY. This chapter does not apply   to a transaction governed exclusively by federal law, including an   international agreement between the United States and a foreign   nation.   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 governor   appointed by the governor, 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;                       (C)     the Department of Information Resources, or   its successor in functions relating to cybersecurity; and                       (D)  the Railroad Commission of Texas.   SUBCHAPTER C. REVIEW OF CERTAIN TRANSACTIONS           Sec.   426.101.     FOREIGN TRANSACTIONS SUBJECT TO REVIEW;   PUBLICATION OF CRITERIA.   (a)   The governor, in consultation with   the committee, shall by rule adopt criteria for determining whether   a foreign transaction is subject to this chapter. The criteria must   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 governor; and                 (2)  affects at least one of the following concerns:                       (A)  critical infrastructure in this state;                       (B)  agricultural land in this state;                       (C)     sensitive personal data of residents of this   state; or                       (D)     a strategic industry or asset identified by   the governor, in consultation with the committee.           (b)     The governor, in consultation with the committee, may by   rule exempt certain transactions from the requirements of this   chapter.           (c)     As soon as practicable after adopting the criteria under   Subsection (a) or an exemption under Subsection (b), the governor   shall submit to the secretary of state the criteria and exemptions   adopted under this section and the secretary of state shall publish   and maintain the information on the secretary of state's Internet   website.           Sec.   426.102.     NOTICE; REVIEW; REPORT TO COMMITTEE.   (a)   A   person who intends to enter into a covered transaction shall, not   later than the 90th day before the date of the closing or other   settlement of the transaction, notify the attorney general in the   form and manner prescribed by the attorney general.           (b)     Not later than the 30th day after the date the attorney   general receives notice under Subsection (a), the attorney general   shall complete an initial review of the information provided in the   notice and determine whether further investigation is warranted. If   the attorney general determines that further investigation is   warranted, the attorney general shall conduct a secondary   investigation. The attorney general shall conclude a secondary   investigation not later than the 45th day after the date the   attorney general concludes the initial review.           (c)     On completion of an initial review and, if applicable,   secondary investigation under Subsection (b), the attorney general   shall submit a report containing the results of the review and   investigation to the committee.           Sec.   426.103.     MITIGATION AGREEMENT. (a)   If the attorney   general determines that a mitigation agreement is necessary to   protect the state's interests, the attorney general shall, as soon   as practicable after submitting the report under Section 426.102,   submit a proposed mitigation agreement to the committee. The   agreement must address concerns raised in the report and may   require a party to a covered transaction to comply with certain   requirements proposed by the attorney general, including:                 (1)  data protection protocols;                 (2)  security clearance requirements;                 (3)     restrictions on access by foreign entities to   assets that are a part of a covered transaction; and                 (4)  compliance reporting.           (b)     On receipt of the mitigation agreement from the attorney   general, the committee shall adopt or reject the agreement.           (c)     If the committee adopts the mitigation agreement, the   committee shall deliver the agreement to each party to the covered   transaction.           (d)     If the committee rejects the mitigation agreement, the   attorney general shall prepare a new mitigation agreement that   addresses the committee's concerns with the initial agreement.        &#xA [Text truncated for display. 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