SB2368

What was already prohibited: Existing law bars infrastructure-access agreements when the business knows the other company meets specified ownership, control or headquarters tests tied to China, Iran, North Korea, Russia or a governor-designated country. It excludes specifically allowed product-warranty and support access. This is not a blanket ban on every foreign supplier or every employee with foreign connections. Existing prohibited-access law; Country-designation authority.

Penalties: The Public Utility Commission may impose up to $1 million per violation on a business subject to its jurisdiction under Title 2 of the Utilities Code for a prohibited agreement granting access to or control of its critical grid equipment or infrastructure. A separate $1 million ceiling applies to a business’s failure to submit all required information, or knowing submission of false information, to a certified independent grid organization under the foreign-transactions reporting section. The ordinary ceiling was $25,000; existing law treats each day a violation continues or occurs as a separate violation. These are maximum administrative penalties, not automatic million-dollar bills. Existing notice, hearing and judicial-review procedures remain. Final law, sections 1–2; Prior penalty law; Notice and hearing; Judicial review.

Verification and workers: Certified independent grid organizations may demand additional information to check required business attestations or reports and share relevant information with the attorney general or commission. At an organization’s request, the attorney general may investigate. Existing immediate suspension or termination authority is expressly subject to the commission’s dispute-resolution power. Before hiring for positions identified as critical to grid security, an organization must obtain applicants’ attestations about travel to the specified countries and relationships with foreign governmental entities or political organizations, in addition to existing background checks. The act does not itself make disclosed travel an automatic hiring ban. Final law, sections 4–5; Prior background-check and dispute provisions; Prior foreign-transactions provisions.

Confidentiality and utilities: The new confidentiality rule covers commission-held or compiled information related to enforcement proceedings under this penalty subchapter—not just foreign-company investigations. It bars public-information disclosure and compelled release, including discovery and subpoenas, with specified access for the commission and its employees or agents and discretionary disclosure to an involved person, law enforcement or a legislator. The act expressly includes electric utilities, municipal utilities and electric cooperatives as persons for administrative penalties; that new inclusion applies only to violations committed on or after September 1, 2025. Final law, sections 3 and 6.

Changes during passage: The Senate committee removed the introduced employee-disclosure provision, tied attorney-general investigations to an organization’s request and added the dispute-resolution qualification. Campbell’s adopted Senate amendment restored employee disclosures with the specific statutory country reference. Patterson’s adopted House amendment added prohibited-access penalties, confidentiality and utility coverage; it also changed the reporting trigger to missing required information or knowingly false information and removed the ERCOT-only wording from that penalty. Both amendments are in the final law; the House committee text matched the Senate-passed text. Introduced; Senate committee; Senate-passed; House committee; Campbell amendment; Patterson amendment; Amendment actions; Final law.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

The intended benefit is stronger scrutiny and deterrence of prohibited infrastructure access. Affected businesses face larger potential penalties and information demands; applicants in the specified jobs must provide additional disclosures. Confidentiality protects enforcement information but also limits public and litigant access. These are legal effects and tradeoffs, not proof of fewer security incidents or lower electricity bills. The final posted fiscal note forecasts a positive but unquantified state revenue effect from penalties, assumes administrative costs can be absorbed within existing resources, and expects no significant local-government fiscal impact. It does not quantify private compliance costs or guarantee any collections. Final law; Final posted fiscal note.