The bill, H.B. No. 4935, introduces Chapter 2278 to the Government Code, establishing limitations on hiring practices for companies that receive governmental contracts or financial benefits. Specifically, it prohibits these companies from hiring nonpermanent residents if such hiring would result in more than five percent of their total employees being nonpermanent residents. The bill defines key terms such as "company," "governmental entity," "listed financial benefit," "nonpermanent resident," and "tax preference," and mandates that companies provide written verification regarding their hiring practices in contracts with governmental entities.

Additionally, the bill outlines enforcement mechanisms, including civil penalties for violations. Companies that breach the hiring limitations or contract provisions may face a civil penalty of $5,000 per violation, with each day of non-compliance considered a separate violation. The attorney general is empowered to investigate complaints and enforce penalties, which may include recovering double the amount of financial benefits received by the company from the governmental entity. The comptroller is tasked with adopting a list of financial benefits by January 1, 2026, and the act is set to take effect on September 1, 2025.

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