Texas SB 2368: 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.

Summary

This bill strengthens Texas's critical infrastructure protections by requiring electric utilities and grid operators to screen employees in security-sensitive positions for foreign government connections and travel to designated countries, and to report and restrict purchases of critical equipment from foreign-controlled companies. The bill increases administrative penalties to up to $1 million per violation for utilities that allow foreign entities to access or control critical grid equipment, and keeps enforcement information confidential except for law enforcement and legislative oversight.

Bill Text

S.B.ANo.A2368
AN ACT
relatingto  criticalinfrastructureandutilities,including
affiliationwithcertainforeignentitiesof  certainpersons
workingor participatingin the electricitymarket;authorizingand
increasingadministrativepenalties.
BE IT ENACTEDBY THE LEGISLATUREOF THE STATEOF TEXAS:
SECTION
A1.AAChapter117,Business&  CommerceCode,is
amendedby addingSection117.004to readas follows:
Sec.
A117.004.AAENFORCEMENTBY PUBLICUTILITYCOMMISSIONOF
TEXAS.(a)The PublicUtilityCommissionof Texasmay imposean
administrativepenaltyin  themannerprovidedby  Chapter15,
UtilitiesCode,on  a  businessentitythatis  subjectto  the
jurisdictionof the commissionunderTitle2, UtilitiesCode,for a
violationof thischapterin whichthe businessentityentersinto
an agreementgrantinga companyaccessto or controlof the business
entity
’s   criticalelectricgridequipmentorcritical
infrastructure.
(b)
AAThe penaltyfor a violationdescribedby Subsection(a)
may be in an amountnot to exceed$1 millionfor eachviolation.
SECTION
A2.AASection15.023,UtilitiesCode,is amendedby
addingSubsection(b-2)to readas follows:
(b-2)
AANotwithstandingSubsection(b),thepenaltyfora
violationof Section39.360in whicha businessentityfailsto
submitallrequiredinformationto or knowinglysubmitsfalse
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informationto an independentorganizationcertifiedunderSection
39.151maybe in an amountnotto exceed$1 millionforeach
violation.
SECTION
A3.AASubchapterB,  Chapter15,UtilitiesCode,is
amendedby addingSections15.034and 15.035to readas follows:
Sec.
A15.034.AACONFIDENTIALITYOF ENFORCEMENTINFORMATION.
(a)Informationand materialin the possessionof or obtainedor
compiledby  thecommissionthatis  relatedto  a  commission
enforcementproceedingunderthissubchapteris confidentialand
not subjectto disclosureunderChapter552,GovernmentCode.
(b)
AAInformationandmaterialin  thepossessionof  or
obtainedor  compiledby  thecommissionthatis  relatedto  a
commissionenforcementproceedingunderthissubchapteris not
subjectto disclosure,discovery,subpoena,or any othermeansof
legalcompulsionfor release,except:
(1)
AAto thecommissionor an employeeor agentof the
commission;or
(2)
AAat the commission’s discretion,to:
(A)
AAa  personinvolvedintheenforcement
proceeding;
(B)
AAa law enforcementagency;or
(C)
AAa memberof the legislature.
Sec.
A15.035.AAAPPLICABILITY.Forthepurposesof imposing
anadministrativepenaltyunderthissubchapter,"person"
includes:
(1)
AAan electricutilityas definedby Section31.002;
(2)
AAa municipallyownedutility;and
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S.B.
ANo.A2368
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(3)AAan electriccooperative.
SECTION
A4.AASection39.151(g-7),UtilitiesCode,as addedby
Chapter464(S.B.2013),Actsof the88thLegislature,Regular
Session,2023,is redesignatedas Section39.151(g-8),Utilities
Code,and amendedto readas follows:
(g-8)
A[(g-7)]AATo maintaincertificationas an independent
organizationunderthissection,the organizationmust:
(1)
AAidentifyallemployeepositionsinthe
organizationthatarecriticalto thesecurityof theelectric
grid;and
(2)
AAbeforehiringa personfor a positiondescribedby
Subdivision(1),obtain:
(A)
AAfromtheDepartmentof PublicSafetyor a
privatevendor,criminalhistoryrecordinformationrelatingto the
prospectiveemployeeandanyotherbackgroundinformation
considerednecessaryby the independentorganizationor requiredby
the commission;and
(B)
AAfromtheprospectiveemployee,an
attestationregarding:
(i)
AAanyformertravelby theprospective
employeeto a countrydescribedby Section117.002(a)(2)(A)(i),
Business& CommerceCode;and
(ii)
AAanyrelationshipbetweenthe
prospectiveemployeeand a foreigngovernmentalentityor foreign
politicalorganization.
SECTION
A5.AASection39.360,UtilitiesCode,as  addedby
Chapter464(S.B.2013),Actsof the88thLegislature,Regular
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S.B.
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Session,2023,is amendedby amendingSubsections(a),(b),(c),
(d),and(e)andaddingSubsections(d-1)and(j)to readas
follows:
(a)
AAInthissection,"company"and"critical
infrastructure"havethemeaningsassignedby Section117.001
[113.001],Business& CommerceCode[,as addedby Chapter975 (S.B.
2116),Actsof the 87thLegislature,RegularSession,2021].
(b)
AAAn independentorganizationcertifiedunderSection
39.151may not registera businessentityas a marketparticipantor
maintaintheregistrationof a businessentityto operateas a
marketparticipantin thepowerregionforwhichtheindependent
organizationis certifiedunlessthe businessentityatteststhat
theentitycomplieswithChapter117[113],Business& Commerce
Code[,as addedby Chapter975(S.B.2116),Actsof the87th
Legislature,RegularSession,2021].
(c)
AAAn independentorganizationcertifiedunderSection
39.151shallrequireas a conditionof operatingas a market
participantin  thepowerregionforwhichtheindependent
organizationis certifiedthata businessentityreportto the
independentorganizationthe purchaseof any criticalelectricgrid
equipmentorservicefroma  companydescribedbySection
117.002(a)(2)[1