Relating to critical infrastructure and utilities, including affiliation with certain foreign entities of certain persons working or participating in the electricity market; authorizing and increasing administrative penalties.

89(R) SB 2368 - Enrolled version - Bill Text

S.B. No. 2368

AN ACT

relating to critical infrastructure and utilities, including

affiliation with certain foreign entities of certain persons

working or participating in the electricity market; authorizing and

increasing administrative penalties.

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

SECTION 1. Chapter 117, Business & Commerce Code, is

amended by adding Section 117.004 to read as follows:

Sec.

117.004.

ENFORCEMENT BY PUBLIC UTILITY COMMISSION OF

TEXAS. (a) The Public Utility Commission of Texas may impose an

administrative penalty in the manner provided by Chapter 15,

Utilities Code, on a business entity that is subject to the

jurisdiction of the commission under Title 2, Utilities Code, for a

violation of this chapter in which the business entity enters into

an agreement granting a company access to or control of the business

entity's critical electric grid equipment or critical

infrastructure.

(b)

The penalty for a violation described by Subsection (a)

may be in an amount not to exceed $1 million for each violation.

SECTION 2. Section 15.023, Utilities Code, is amended by

adding Subsection (b-2) to read as follows:

(b-2)

Notwithstanding Subsection (b), the penalty for a

violation of Section 39.360 in which a business entity fails to

submit all required information to or knowingly submits false

information to an independent organization certified under Section

39.151 may be in an amount not to exceed $1 million for each

violation.

SECTION 3. Subchapter B, Chapter 15, Utilities Code, is

amended by adding Sections 15.034 and 15.035 to read as follows:

Sec.

15.034.

CONFIDENTIALITY OF ENFORCEMENT INFORMATION.

(a)

Information and material in the possession of or obtained or

compiled by the commission that is related to a commission

enforcement proceeding under this subchapter is confidential and

not subject to disclosure under Chapter 552, Government Code.

(b)

Information and material in the possession of or

obtained or compiled by the commission that is related to a

commission enforcement proceeding under this subchapter is not

subject to disclosure, discovery, subpoena, or any other means of

legal compulsion for release, except:

(1)

to the commission or an employee or agent of the

commission; or

(2) at the commission's discretion, to:

(A)

a person involved in the enforcement

proceeding;

(B) a law enforcement agency; or

(C) a member of the legislature.

Sec.

15.035.

APPLICABILITY. For the purposes of imposing

an administrative penalty under this subchapter, "person"

includes:

(1) an electric utility as defined by Section 31.002;

(2) a municipally owned utility; and

(3) an electric cooperative.

SECTION 4. Section 39.151(g-7), Utilities Code, as added by

Chapter 464 (S.B. 2013), Acts of the 88th Legislature, Regular

Session, 2023, is redesignated as Section 39.151(g-8), Utilities

Code, and amended to read as follows:

(g-8)
[
(g-7)
] To maintain certification as an independent

organization under this section, the organization must:

(1) identify all employee positions in the

organization that are critical to the security of the electric

grid; and

(2) before hiring a person for a position described by

Subdivision (1), obtain
:

(A)
from the Department of Public Safety or a

private vendor
,
criminal history record information relating to the

prospective employee and any other background information

considered necessary by the independent organization or required by

the commission
; and

(B)

from the prospective employee, an

attestation regarding:

(i)

any former travel by the prospective

employee to a country described by Section 117.002(a)(2)(A)(i),

Business & Commerce Code; and

(ii)

any relationship between the

prospective employee and a foreign governmental entity or foreign

political organization
.

SECTION 5. Section 39.360, Utilities Code, as added by

Chapter 464 (S.B. 2013), Acts of the 88th Legislature, Regular

Session, 2023, is amended by amending Subsections (a), (b), (c),

(d), and (e) and adding Subsections (d-1) and (j) to read as

follows:

(a) In this section, "company" and "critical

infrastructure" have the meanings assigned by Section
117.001

[
113.001
], Business & Commerce Code[
, as added by Chapter 975 (S.B.

2116), Acts of the 87th Legislature, Regular Session, 2021
].

(b) An independent organization certified under Section

39.151 may not register a business entity
as a market participant
or

maintain the registration of a business entity to operate
as a

market participant
in the power region for which the independent

organization is certified unless the business entity attests that

the entity complies with Chapter
117
[
113
], Business & Commerce

Code[
, as added by Chapter 975 (S.B. 2116), Acts of the 87th

Legislature, Regular Session, 2021
].

(c) An independent organization certified under Section

39.151 shall require as a condition of operating
as a market

participant
in the power region for which the independent

organization is certified that a business entity report to the

independent organization the purchase of any critical electric grid

equipment or service from a company described by Section

117.002(a)(2)
[
113.002(a)(2)
], Business & Commerce Code[
, as added

by Chapter 975 (S.B. 2116), Acts of the 87th Legislature, Regular

Session, 2021
].

(d) For each purchase reported by a business entity under

Subsection (c), the business entity shall submit an attestation to

the independent organization that the purchase will not result in

access to or control of its critical electric grid equipment by a

company described by Section
117.002(a)(2)
[
113.002(a)(2)
],

Business & Commerce Code, [
as added by Chapter 975 (S.B. 2116), Acts

of the 87th Legislature, Regular Session, 2021,
] excluding access

specifically allowed by the business entity for product warranty

and support purposes.

(d-1)

An independent organization certified under Section

39.151 may:

(1)

require as a condition of market participant

registration that a business entity provide the independent

organization with additional information to confirm the accuracy of

an attestation or report required under Subsection (b), (c), or

(d); and

(2)

disclose information received under Subdivision

(1) or any other relevant information to the attorney general or the

commission.

(e) Notwithstanding any other law
but subject to Section

39.151(d-4)(6)
, an independent organization certified under

Section 39.151 may immediately suspend or terminate a
business

entity's
[
company's
] registration
as a market participant
or access

to any of the independent organization's systems if the independent

organization has a reasonable suspicion that the
business entity is

a
company [
meets any of the criteria
] described by Section

2275.0102(a)(2)
[
2274.0102(a)(2)
], Government Code[
, as added by

Chapter 975 (S.B. 2116), Acts of the 87th Legislature, Regular

Session, 2021
].

(j)

On request of an independent organization certified

under Section 39.151, the attorney general may investigate the

accuracy or sufficiency of information provided under this section

to the independent organization and disclose any new information

obtained in relation to the investigation to the independent

organization or the commission.

SECTION 6. Section 15.035, Utilities Code, as added by this

Act, applies only to a violation committed on or after the effective

date of this Act. A violation committed before the effective date

of this Act is governed by the law in effect when the violation was

committed, and the former law is continued in effect for that

purpose.

SECTION 7. To the extent of any conflict, this Act prevails

over another Act of the 89th Legislature, Regular Session, 2025,

relating to nonsubstantive additions to and corrections in enacted

codes.

SECTION 8. This Act takes effect September 1, 2025.

______________________________

______________________________

President of the Senate

Speaker of the House

I hereby certify that S.B. No. 2368 passed the Senate on

April 22, 2025, by the following vote: Yeas 31, Nays 0; and that

the Senate concurred in House amendment on May 30, 2025, by the

following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 2368 passed the House, with

amendment, on May 28, 2025, by the following vote: Yeas 138,

Nays 0, two present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor