The bill, H.B. No. 2409, seeks to prohibit governmental contracts with companies that are either organized in or have their principal place of business in the People's Republic of China, specifically concerning information and communications technology (ICT). It amends Chapter 2275 of the Government Code to include a new subchapter dedicated to this prohibition, which outlines definitions, verification requirements, and penalties for violations. Notably, it introduces the term "scrutinized company" to identify those companies that fall under this prohibition and establishes conditions under which a governmental entity may contract with such companies, provided they receive approval from the governor.

Additionally, the bill imposes civil and criminal penalties for vendors that violate these provisions. A vendor found to be in violation may face a civil penalty equal to either twice the amount of the terminated contract or the loss suffered by the state due to the termination. Furthermore, violations can result in criminal charges classified as state jail felonies. The bill is set to take effect on September 1, 2025, and applies only to contracts for which bids or proposals are publicly requested after this date.

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