S.B. No. 2650 introduces new requirements for participation in the federal E-Verify program, which verifies employment authorization for individuals. The bill amends Chapter 2264 of the Government Code, changing its heading to "Certain Restrictions on Public Subsidies and State Contracts." It stipulates that state agencies cannot award contracts to contractors or subcontractors unless they are registered with and actively participating in the E-Verify program. Contracts must include a certification statement regarding eligibility, and non-compliance can lead to contract termination and penalties, including barring from future state contracts. Additionally, the bill mandates that employers and political subdivisions verify employee information through E-Verify within three business days of hiring and maintain records for at least three years, with exceptions for years when federal funding for E-Verify is unavailable.

The bill also requires state agencies to establish procedures by December 31, 2026, and introduces new sections to the Government Code and Labor Code that will apply to contracts entered into on or after January 1, 2027. State agencies must adopt rules and prescribe forms related to Section 53.005 of the Labor Code as soon as practicable after the bill's effective date. The bill's effective date is contingent upon a two-thirds vote from both houses; if not met, it will take effect on September 1, 2025. Sections 53.003 of the Labor Code and 181.002 of the Local Government Code will also come into effect starting January 1, 2027, aiming to streamline processes and ensure compliance with the new regulations.

Statutes affected:
Introduced: The heading to Chapter , Government Code 1.01, The heading to Subchapter C, Chapter , Government Code 1.03, Subchapter C, Chapter , Government Code 1.04, Subtitle B, Title , Labor Code 1.05, Subtitle C, Title , Local Government Code 1.06 (Subtitle C, Title , Local Government Code 1, The heading to Subchapter C, Chapter , Government Code 1, The heading to Chapter , Government Code 1, Subtitle B, Title , Labor Code 1, Subchapter C, Chapter , Government Code 1)