AI-assisted research summary: If the state auditor’s office makes a final determination that a person violated this subchapter, that person can lose state contracts, be fined, and be barred from bidding or being awarded state contracts.
Sec. 2261.306. ENFORCEMENT: CONTRACT TERMINATION; BARRING FROM STATE CONTRACTS; ADMINISTRATIVE PENALTIES. (a) On a final determination by the state auditor's office that a person violated this subchapter, the person is: (1) for a first violation: (A) subject to immediate termination of any state contracts without further obligation; (B) liable for an administrative penalty in an amount not to exceed: (i) $500,000; or (ii) $2 million if the violation involved undue influence or the misuse of private or confidential information; and (C) barred from responding to a solicitation for or being awarded a state contract until: (i) the tenth anniversary of the date the person receives the final determination; or (ii) the fifteenth anniversary of the date the person receives the final determination if the violation involved undue influence or the misuse of private or confidential information; and (2) for a second or subsequent violation: (A) subject to immediate termination of all state contracts without further obligation; (B) liable for an administrative penalty in an amount not to exceed: (i) $1 million; or (ii) $2 million if the violation involved undue influence or the misuse of private or confidential information; and (C) barred permanently from responding to a solicitation for or being awarded a state contract. (b) An individual who authorizes or directs an entity to violate this subchapter may be subject to a penalty under this section in the same manner as an entity that is determined to have violated this subchapter. (c) A violation of this subchapter committed by or involving the following individuals or entities is considered a violation of this subchapter by a contractor, subcontractor, vendor, or respondent to a contract solicitation by a state agency: (1) a parent company of the contractor, subcontractor, vendor, or respondent; (2) a subsidiary wholly or partially owned by the contractor, subcontractor, vendor, or respondent; (3) a sister or affiliate entity under common ownership or control of the contractor, subcontractor, vendor, or respondent; (4) a subdivision, division, or operational branch of the contractor, subcontractor, vendor, or respondent; (5) a subcontractor, agent, representative, or third party acting on behalf of or in coordination with the contractor, subcontractor, vendor, or respondent; (6) a joint venture, consortium, or partnership in which the contractor, subcontractor, vendor, or respondent has an interest; (7) an employee, officer, or executive of the contractor, subcontractor, vendor, or respondent acting within the employee's, officer's, or executive's scope of employment; and (8) an entity with which the contractor, subcontractor, vendor, or respondent shares significant operational control, decision-making authority, financial interest, or business goals. (d) Subsection (c) applies regardless of whether an individual or entity described by that subsection is a direct party to a contract or procurement agreement. An individual or entity described by Subsections (c)(1) through (8) is subject to the enforcement actions, penalties, and disqualifications provided by this subchapter. (e) The state auditor's office shall notify the comptroller of each final determination that a person violated this subchapter. The comptroller shall distribute information to state agencies regarding the final determination to assist state agencies in carrying out the intent of this subchapter. Each state agency shall review the information distributed by the comptroller to ensure that the agency does not award a contract in violation of this section. Added by Acts 2025, 89th Leg., R.S., Ch. 241 (H.B. 5061), Sec. 2, eff. September 1, 2025.