Relating to measures to protect public institutions of higher education from foreign adversaries and to the prosecution of the criminal offense of theft of trade secrets; providing civil and administrative penalties; increasing a criminal penalty.

89(R) SB 2430 - Introduced version - Bill Text

89R4522 CXP-F

By: Hughes

S.B. No. 2430

A BILL TO BE ENTITLED

AN ACT

relating to measures to protect public institutions of higher

education from foreign adversaries and to the prosecution of the

criminal offense of theft of trade secrets; providing civil and

administrative penalties; increasing a criminal penalty.

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

SECTION 1. Subtitle A, Title 3, Education Code, is amended

by adding Chapter 51B to read as follows:

CHAPTER 51B.

HIGHER EDUCATION RESEARCH AND PROTECTION

SUBCHAPTER A.

GENERAL PROVISIONS

Sec. 51B.001. DEFINITIONS. In this chapter:

(1)

"Affiliate organization" means an entity under the

control of or established for the benefit of an organization.

The

term includes a direct-support organization that is organized and

operated to receive, hold, invest, and administer property and make

expenditures to or for the benefit of an institution of higher

education or for the benefit of a research and development park or

authority affiliated with an institution of higher education.

(2)

"Coordinating board" means the Texas Higher

Education Coordinating Board.

(3) "Foreign adversary" means:

(A)

any country designated as a foreign adversary

by the United States secretary of commerce under 15 C.F.R. Section

791.4; and

(B) the State of Qatar.

(4)

"Foreign government" means the government or an

agent of a country, nation, or group of nations, or a province or

other political subdivision of a country or nation, other than the

United States government.

(5) "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 government;

(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)

a partnership, association, organization, or

other combination of persons, or a subsidiary of such an entity,

organized under the laws of or having its principal place of

business in a foreign adversary;

(E)

a political party or member of a political

party of a foreign adversary; or

(F)

an agent acting on behalf of an individual or

entity described by Paragraph (A), (B), (C), (D), or (E).

(6)

"Gift" means a gift, grant, endowment, award, or

donation of money or property of any kind, including a conditional

or unconditional pledge of the gift, grant, endowment, award, or

donation.

(7)

"Institution of higher education" has the meaning

assigned by Section 61.003.

(8)

"Interest" when referring to an entity means any

direct or indirect:

(A)

investment in or loan extended to the entity

that is valued at five percent or more of the entity's net worth; or

(B)

control over the entity at a level exerting

similar or greater influence on the governance of the entity as an

investment described by Paragraph (A).

(9)

"Political party" means an organization or

combination of individuals whose aim or purpose is, or who is

engaged in an activity devoted to, the establishment, control, or

acquisition of administration or control of a government, or the

furtherance or influencing of the political or public interest,

policies, or relations of a government.

Sec.

51B.002.

RULES. The coordinating board shall adopt

rules as necessary to implement this chapter.

SUBCHAPTER B. REQUIREMENTS FOR GIFTS FROM AND CONTRACTS WITH

FOREIGN ADVERSARIES

Sec.

51B.051.

GIFT FROM FOREIGN ADVERSARY. (a)

Each

institution of higher education may not accept a gift the

institution is directly or indirectly offered from a foreign source

of a foreign adversary unless the gift is approved by the

coordinating board.

(b)

An institution of higher education shall promptly

submit to the coordinating board a report on any gift the

institution is directly or indirectly offered from a foreign source

of a foreign adversary.

(b-1)

Not later than November 1, 2025, each institution of

higher education shall submit to the coordinating board a report on

each gift the institution received directly or indirectly from a

foreign source of a foreign adversary from December 31, 2015, to

September 1, 2025.

This subsection expires January 1, 2026.

(c)

For each gift required to be reported under this

section, an institution of higher education 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 received the offer of the

gift;

(2) the value of the gift;

(3) the purpose of the gift;

(4)

an identification of the persons the gift is

explicitly intended to benefit;

(5)

any applicable condition, requirement,

restriction, or term made a part of the gift;

(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 the gift terminates, if applicable.

(d)

Not later than the 30th day after the date the

coordinating board receives a report under Subsection (b), the

coordinating board shall determine whether and under what

conditions the institution may accept the gift.

(e) The coordinating board shall adopt:

(1)

forms for an institution of higher education to

use in reporting the offering of a gift described by Subsection (b);

and

(2)

rules and procedures for deciding whether to allow

an institution of higher education to accept a gift described by

Subsection (b).

(f)

The coordinating board shall maintain a public Internet

portal disclosing each gift reported under this section and the

coordinating board's decision whether to allow the institution of

higher education to accept the gift.

(g)

For purposes of this section, a gift offered through an

intermediary or affiliate organization is considered an indirect

gift and subject to reporting.

(h)

On the request of the governor, the lieutenant governor,

or the speaker of the house of representatives, the coordinating

board shall inspect or audit a gift reported under this section.

(i)

Information required to be reported under this section

is not confidential except as otherwise provided by state law or

unless protected as a trade secret by federal or state law.

Sec.

51B.052.

CONTRACT OR CULTURAL AGREEMENT WITH FOREIGN

ADVERSARY. (a)

Each institution of higher education may not enter

into a contract or cultural agreement with a foreign source of a

foreign adversary unless the contract or agreement is approved by

the coordinating board.

(b)

An institution of higher education shall promptly

submit to the coordinating board a report on any contract or

cultural agreement the institution is directly or indirectly

offered from a foreign source of a foreign adversary.

(b-1)

Not later than November 1, 2025, each institution of

higher education shall submit to the coordinating board a report on

each contract or cultural agreement the institution directly or

indirectly entered into with a foreign source of a foreign

adversary from December 31, 2013, to September 1, 2025.

This

subsection expires January 1, 2026.

(c)

For each contract or cultural agreement required to be

reported under this section, an institution of higher education

must include in the report, unless the disclosure of that

information is prohibited or the information is confidential under

federal or state law:

(1)

the information described by Section 51B.051(c)

with respect to the contract or agreement; and

(2) a copy of the contract or agreement.

(d)

Not later than the 30th day after the date the

coordinating board receives a report under Subsection (b), the

coordinating board shall determine whether and under what

conditions the institution may enter into the contract or cultural

agreement.

(e) The coordinating board shall adopt:

(1)

forms for an institution of higher education to

use in reporting the offering of a contract or cultural agreement

described by Subsection (b); and

(2)

rules and procedures for deciding whether to allow

an institution of higher education to enter into a contract or

cultural agreement described by Subsection (b).

(f)

The coordinating board shall maintain a public Internet

portal disclosing each contract and cultural agreement reported

under this section and the coordinating board's decision whether to

allow the institution of higher education to enter into the

contract or agreement.

(g)

For purposes of this section, a contract or cultural

agreement entered into through an intermediary or affiliate

organization is considered an indirect contract or cultural

agreement and subject to reporting.

(h)

On the request of the governor, the lieutenant governor,

or the speaker of the house of representatives, the coordinating

board shall inspect or audit a contract or cultural agreement

reported under this section.

Sec.

51B.053.

INVESTIGATION. (a) The coordinating board

shall investigate an alleged violation of this subchapter if the

coordinating board receives:

(1)

a complaint from a compliance officer of a state

agency or institution of higher education; or

(2)

a sworn complaint based on substantive information

and reasonable belief.

(b)

The coordinating board may request from any person

records relevant to a reasonable suspicion of a violation of this

subchapter.

A person who receives a request under this subsection

shall produce the records not later than the 10th day after the date

the person receives the request, unless the coordinating board and

the person agree to a later date.

Sec.

51B.054.

ENFORCEMENT; PENALTIES FOR VIOLATION. (a) A

person who fails to submit a report required under this subchapter,

obtain coordinating board approval for a gift, contract, or

cultural agreement as required under this subchapter, or provide a

record requested under Section 51B.053 is liable to this state for a

civil penalty in the amount of $10,000 for the first violation and

$20,000 for each subsequent violation.

(b)

A final order finding a failure to submit a report

required under this subchapter or to obtain coordinating board

approval for a gift, contract, or cultural agreement as required

under this subchapter must:

(1)

identify the state officer or employee responsible

for accepting or entering into the unreported or unapproved gift,

contract, or cultural agreement; and

(2) refer the violation to, as applicable:

(A)

the governor to consider removing a state

officer identified under Subdivision (1) from office; or

(B)

the employing institution of higher

education to consider terminating the employment of an employee

identified under Subdivision (1).

(c)

The attorney general may sue to collect the civil

penalty under Subsection (a).

A suit under this subsection may be

filed in a district court in Travis County.

(d)

If the coordinating board determines that an

institution of higher education negligently failed to report

information required by this subchapter or obtain coordinating

board approval for a gift, contract, or cultural agreement as

required under this subchapter, the coordinating board may assess

an administrative penalty against the institution in an amount

equal to 105 percent of the value of each unreported or unapproved

gift, contract, or agreement.

(e)

An institution of higher education may not pay a civil

penalty imposed under Subsection (a) or an administrative penalty

assessed under Subsection (d) using state or federal money.

(f)

A person who reports a violation described by Subsection

(a) may also report the violation to the attorney general and retain

protection under Chapter 554, Government Code.

The person is

entitled to receive a reward in the amount of 25 percent of any

penalty recovered under this section.

SUBCHAPTER C.

INTERNATIONAL CULTURAL EXCHANGE AGREEMENTS AND

PARTNERSHIPS AND STUDENT ASSOCIATIONS

Sec. 51B.101. DEFINITIONS. In this subchapter:

(1)

"Cultural exchange agreement" means a written or

spoken statement of mutual interest in cultural exchange or

academic or research collaboration.

(2)

"Cultural exchange partnership" means a faculty or

student exchange program, study abroad program, matriculation

program, recruiting program, or dual degree program.

Sec.

51B.102.

CERTAIN INTERNATIONAL CULTURAL AGREEMENTS

PROHIBITED. (a) An institution of higher education may not

participate in a cultural exchange agreement with a foreign source

of a foreign adversary, or an entity controlled by a foreign

adversary, that:

(1) constrains the institution's freedom of contract;

(2)

allows the institution's curriculum or values to

be directed, controlled, or influenced by the foreign adversary; or

(3)

promotes an agenda detrimental to the safety or

security of this state, the residents of this state, or the United

States.

(b)

Before entering into a cultural exchange agreement with

a foreign source of a foreign adversary, an institution of higher

education shall share the substance of the agreement with the

coordinating board and federal agencies responsible for national

security or the enforcement of trade sanctions, embargoes, or other

trade restrictions.

If the coordinating board or a federal agency

consulted under this subsection determines that the agreement

violates the prohibition under Subsection (a), the institution may

not participate in the agreement.

Sec.

51B.103.

PROHIBITIONS ON STUDENT ASSOCIATIONS. (a) A

student or scholars association affiliated with an institution of

higher education may not:

(1)

accept a gift from a foreign source of a foreign

adversary; or

(2)

enter into a contract or agreement with a foreign

source of a foreign adversary.

(b)

An institution of higher education shall terminate an

affiliation with a student or scholars association if the

institution determines that the association has violated this

section.

(c)

For purposes of this section, member dues or fees are

not considered a gift from a foreign source of a foreign adversary.

Sec.

51B.104.

ANNUAL REPORT. (a) Not later than December 1

of each year, the coordinating board shall submit a written report

to the governor, the lieutenant governor, and the speaker of the

house of representatives on the grant programs, cultural exchange

agreements, cultural exchange partnerships, and contracts between

an institution of higher education and a foreign adversary or a

foreign source of a foreign adversary.

(b)

The report must include the following information for

the preceding fiscal year:

(1)

data regarding each grant program, cultural

exchange agreement, cultural exchange partnership, or contract

between an institution of higher education and an educational

institution or other institution that is based in or controlled by a

foreign adversary;

(2)

a list of each office, campus, or physical

location used or maintained by an institution of higher education

in a foreign adversary; and

(3)

the date on which each grant program, agreement,

partnership, or contract described by Subdivision (1) is expected

to terminate.

(c)

Not later than July 1 of each year, each institution of

higher education shall submit to the coordinating board the

information described by Subsection (b).

SUBCHAPTER D.

SCREENING OF FOREIGN RESEARCHERS

Sec.

51B.151.

APPLICABILITY. This subchapter applies only

to an institution of higher education that has an annual research

budget of $10 million or more.

Sec.

51B.152.

SCREENING OF FOREIGN RESEARCHERS REQUIRED.

(a)

Before interviewing or offering an applicant employment for a

research or research-related support position at the institution or

granting an applicant access to research data or activities or

other sensitive data of the institution, an institution of higher

education must screen the applicant as provided by this subchapter

if the applicant:

(1)

is a citizen of a foreign country and is not a

permanent resident of the United States; or

(2)

is affiliated with an institution or program, or

has at least one year of employment or training, in a foreign

adversary, other than employment or training by an agency of the

United States.

(b)

An institution of higher education may screen

additional applicants as provided by this subchapter for a position

described by Subsection (a) at the institution's discretion.

Sec.

51B.153.

APPLICATION: REQUIRED MATERIALS. (a) An

institution of higher education must require an applicant subject

to screening under Section 51B.152 to submit to the institution:

(1)

if the applicant is a citizen of a foreign country,

a copy of the applicant's passport and nonimmigrant visa

application most recently submitted to the United States Department

of State; and

(2) a resume and curriculum vitae that includes:

(A)

a list of each postsecondary educational

institution in which the applicant has been enrolled;

(B)

a list of all places of employment since the

applicant's 18th birthday;

(C)

a list of all published materials for which

the applicant received credit as an author, a researcher, or

otherwise or to which the applicant contributed significant

research, writing, or editorial support;

(D)

a list of the applicant's current and pending

research funding from any source, including the source of funding,

the amount of funding, the applicant's role on the project, and a

brief description of the research; and

(E)

a full disclosure of the applicant's

professional activities outside of higher education, including any

affiliation with an institution or program in a foreign adversary.

(b)

Notwithstanding Subsection (a)(2)(B), an applicant who

has been continuously employed or enrolled in a postsecondary

educational institution in the United States for the preceding 20

years may include in the applicant's resume only the applicant's

employment history for the preceding 20 years.

(c)

An institution of higher education may destroy or return

to an applicant the copy of the applicant's nonimmigrant visa

application submitted under Subsection (a)(1) after extracting all

information relevant to the requirements of this subchapter.

Sec.

51B.154.

RESEARCH INTEGRITY OFFICE. (a) The chief

administrative officer of an institution of higher education shall

establish a research integrity office to:

(1)

review the materials submitted to the institution

by an applicant under Section 51B.153; and

(2)

take reasonable steps to verify the information in

the application, including by:

(A)

searching public databases for research

publications and presentations and public conflict of interest

records to identify any research publication or presentation that

may have been omitted from the application;

(B)

contacting each of the applicant's employers

during the preceding 10 years to verify employment;

(C)

contacting each postsecondary educational

institution the applicant attended to verify enrollment and

educational progress;

(D)

searching public listings of persons subject

to sanctions or restrictions under federal law;

(E)

submitting the applicant's name and other

identifying information to the Federal Bureau of Investigation or

another federal agency for screening related to national security

or counterespionage; and

(F)

taking any other action the office considers

appropriate.

(b)

An institution of higher education may direct the

research integrity office to approve applicants for hire using a

risk-based determination that considers the nature of the research

and the applicant's background and ongoing affiliations.

(c)

An institution of higher education must complete the

requirements of this subchapter before:

(1)

interviewing or offering a position to an

applicant described by Section 51B.152(a) in a research or

research-related support position; or

(2)

granting the applicant access to research data or

activities or other sensitive data.

(d)

An institution of higher education may not employ an

applicant subject to screening under Section 51B.152(a) in a

research or research-related support position if the applicant

fails to disclose in the application a substantial educational,

employment, or research-related activity or publication or

presentation unless the applicable department head or the

department head's designee certifies in writing the substance of

the failure to disclosure and the reasons for disregarding that

failure.

A copy of the certification must be kept in the

investigative file of the research integrity office and must be

submitted to the nearest Federal Bureau of Investigation field

office.

(e)

The research integrity office shall report to the

nearest Federal Bureau of Investigation field office, and to any

law enforcement agency designated by the governor or the

institution of higher education's governing board, the identity of

an applicant who is rejected for employment based on the screening

required by this subchapter or other risk-based screening.

Sec.

51B.155.

OPERATIONAL AUDIT. Not later than March 31,

2026, the coordinating board shall conduct an operational audit

regarding the implementation of this subchapter.

This section

expires September 1, 2026.

SUBCHAPTER E. FOREIGN TRAVEL: RESEARCH INSTITUTIONS

Sec.

51B.201.

APPLICABILITY. This subchapter applies only

to an institution of higher education that has an annual research

budget of $10 million or more.

Sec.

51B.202.

FOREIGN TRAVEL: RESEARCH INSTITUTIONS.

(a)

Each institution of higher education shall establish an

international travel approval and monitoring program.

(b)

The program must require, in addition to any other

travel approval process required by the institution of higher

education, preapproval from the institution's research integrity

office established under Section 51B.154 for any

employment-related foreign travel or activities by a faculty

member, researcher, or research department staff member of the

institution.

(c)

A research integrity office may preapprove travel or

activities under the program only if the applicant:

(1)

reviews and acknowledges guidance published by the

institution of higher education that relates to foreign adversaries

or countries under sanctions or other restrictions by this state or

the United States government, including:

(A) federal license requirements;

(B) customs rules;

(C) export controls;

(D)

restrictions on taking institution of higher

education property, including intellectual property, abroad;

(E)

restrictions on presentations, teaching, and

interactions with foreign colleagues; and

(F)

other subjects important to the research and

academic integrity of the institution of higher education; and

(2)

agrees to comply with the institution of higher

education's limitations on travel and activities abroad and all

applicable federal laws.

Sec.

51B.203.

MAINTENANCE OF RECORDS AND REPORT. (a) An

institution of higher education shall maintain for at least three

years, or any longer period of time required by applicable federal

or state law, records relating to foreign travel and activities by a

faculty member, researcher, or research department staff member of

the institution, including:

(1) each foreign travel request and approval;

(2)

expenses reimbursed by the institution for foreign

travel, including for travel, food, and lodging;

(3)

payments and honoraria received during foreign

travel and activities, including for travel, food, and lodging;

(4)

a statement of the purpose of each foreign travel;

and

(5) any record related to the foreign activity review.

(b)

Each institution of higher education shall annually

submit to the institution's governing board a report on foreign

travel by a faculty member, researcher, or research department

staff member of the institution to a foreign adversary.

The report

must list each traveler, foreign location visited, and foreign

institution visited.

Sec.

51B.204.

OPERATIONAL AUDIT. Not later than March 31,

2026, the coordinating board shall conduct an operational audit

regarding the implementation of this subchapter.

This section

expires September 1, 2026.

SUBCHAPTER F. ACADEMIC PARTNERSHIPS

Sec.

51B.251.

APPROVAL OF CERTAIN ACADEMIC PARTNERSHIPS

REQUIRED. (a) Subject to approval by the coordinating board, an

institution of higher education may enter into or renew an academic

partnership with an educational or research institution located in

a foreign adversary only if the institution of higher education

maintains sufficient structural safeguards to protect the

institution's intellectual property, the security of this state,

and the national security interests of the United States.

(b)

The coordinating board may approve an academic

partnership described by Subsection (a) only if the coordinating

board, in consultation with the attorney general's office,

determines that the partnership includes the following safeguards:

(1)

compliance with all federal requirements,

including requirements of:

(A)

federal research sponsors and federal export

control agencies, including regulations regarding international

traffic in arms and export administration regulations; and

(B)

economic and trade sanctions administered by

the Office of Foreign Assets Control of the United States

Department of the Treasury;

(2)

annual formal institution-level training programs

for faculty on conflicts of interest and conflicts of commitment;

and

(3)

a formalized foreign visitor process and uniform

visiting scholar agreement.

(c)

The coordinating board, in consultation with the

attorney general's office, may reject or terminate an academic

partnership described by Subsection (a) at any time and for any

reason.

SUBCHAPTER G. FOREIGN ADVERSARY SOFTWARE AND EDUCATION SERVICES

Sec.

51B.301.

REVIEW OF EDUCATION SOFTWARE. (a) The

coordinating board shall:

(1)

conduct a thorough review of the use by

institutions of higher education of testing, tutoring, or other

education software owned or controlled by a foreign adversary or a

company domiciled or headquartered in a foreign adversary; and

(2)

develop a plan to eliminate the use of education

software described by Subdivision (1).

(b)

An institution of higher education may not enter into or

renew a contract to provide testing, tutoring, or other education

software with a foreign adversary or a company domiciled or

headquartered in a foreign adversary.

SECTION 2. Section 31.05(a), Penal Code, is amended by

adding Subdivisions (2-a), (2-b), and (2-c) to read as follows:

(2-a)

"Foreign agent" means an officer, employee,

proxy, servant, delegate, or representative of a foreign

government.

(2-b)

"Foreign government" has the meaning assigned by

Section 51B.001, Education Code.

(2-c)

"Foreign instrumentality" means an agency,

bureau, ministry, component, institution, association, or legal,

commercial, or business organization, corporation, firm, or entity

that is substantially owned, controlled, sponsored, commanded,

managed, or dominated by a foreign government.

SECTION 3. Section 31.05(c), Penal Code, is amended to read

as follows:

(c) An offense under this section is a felony of the third

degree
, except that the offense is a felony of the second degree if

it is shown on the trial of the offense that the person who

committed the offense intended to benefit a foreign agent, foreign

government, or foreign instrumentality
.

SECTION 4. Not later than March 31, 2026, each public

institution of higher education shall establish an international

travel approval and monitoring program required by Section 51B.202,

Education Code, as added by this Act.

SECTION 5. Not later than December 1, 2026, the Texas Higher

Education Coordinating Board shall prepare and submit the initial

report required by Section 51B.104, Education Code, as added by

this Act.

SECTION 6. The changes in law made by this Act apply only to

a contract entered into or renewed on or after the effective date of

this Act. A contract entered into or renewed before the effective

date of this Act is governed by the law in effect on the date the

contract was entered into or renewed, and the former law is

continued in effect for that purpose.

SECTION 7. The changes in law made by this Act apply only to

an offense committed on or after the effective date of this Act. An

offense committed before the effective date of this Act is governed

by the law in effect on the date the offense was committed, and the

former law is continued in effect for that purpose. For purposes of

this section, an offense was committed before the effective date of

this Act if any element of the offense occurred before that date.

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