HB127

Regular Session

Relating to measures to protect institutions of higher education from foreign adversaries and to the prosecution of the criminal offense of theft of trade secrets; increasing a criminal penalty.

CriticalImmediate action required

High Cost

Effective:2025-06-20

Enforcing Agencies

Department of Public Safety (Consultation on background checks) • Higher Education Research Security Council (New Entity) • Office of the Attorney General (Civil enforcement against vendors) • State Auditor's Office (Compliance audits) • Texas Higher Education Coordinating Board (THECB)

HB127

Relating to measures to protect institutions of higher education from foreign adversaries and to the prosecution of the criminal offense of theft of t...

Critical Urgency

Passed with Opposition

House Vote131 - 8

YEA

94% in favor139 voting

Senate Vote29 - 2

YEA

94% in favor31 voting

Total Opposition Votes

Cost Impact

High

Effective

2025-06-20

Enforcing Agencies

Department of Public SafetyHigher Education Research Securi...Office of the Attorney GeneralState Auditor's Office+1 more

Primary Author: Rep. Terry Wilson

89th Texas Legislature

jdkey.com

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: June 20, 2025 (Immediate effect due to supermajority vote).
Compliance Deadline:
Student Org Funding Bans: 2025-2026 Academic Year.
Vendor Certifications: Immediate upon effective date for new bids.
Research/Gift Vetting: Applies to the academic year *following* the adoption of rules by the new Security Council (Anticipated Fall 2026).
Funding Certification: Fiscal year beginning September 1, 2026.
Agency Rulemaking:
Higher Education Research Security Council: Must convene by January 1, 2026, to develop model policies.
THECB: Must immediately define "de minimis" gift values and publish the prohibited software list.

Immediate Action Plan

Audit Vendor Status: Immediately review your corporate ownership structure and supply chain. If you have parent companies or substantial investors in China, Russia, Iran, or North Korea, you may be disqualified from Texas university contracts.
Update IP Policy: Issue a company-wide memo regarding the escalated criminal penalties for trade secret theft to deter internal bad actors.
Review Software Licenses: If you are an EdTech provider, prepare an affidavit of ownership to preemptively satisfy university procurement officers.
Freeze Foreign Gifts: If you represent a university foundation, halt acceptance of gifts from foreign adversary nations until the THECB publishes the "de minimis" threshold.

Operational Changes Required

Contracts

Vendor Certifications: All vendors bidding on higher education contracts must sign a certification stating they are not a "Foreign Adversary Company" or "Federally Banned Company."
EdTech & Software: Licensing agreements for testing, tutoring, or educational software must include representations that the software is not owned or controlled by a foreign adversary. Existing contracts with prohibited vendors cannot be renewed.
International MOUs: Any partnership agreement that constrains a university's freedom of contract or allows foreign direction of curriculum is now voidable.

Hiring/Training

IP & Trade Secret Training: Update Employee Handbooks immediately. Explicitly state that theft of trade secrets benefiting a foreign entity is now a Second-Degree Felony (2–20 years in prison).
Research Staffing: HR must implement "Risk-Based" screening for research positions. This requires collecting passports and visa applications for foreign citizen applicants before an offer is made.
Travel Protocols: Faculty and staff travel to foreign adversary nations (e.g., China, Russia, Iran) requires pre-approval and post-trip reporting.

Reporting & Record-Keeping

Gift Logs: Universities must track all foreign gifts. Gifts exceeding $25,000 (or the federal threshold) require CEO approval and reporting to THECB.
Travel Records: Maintain foreign travel requests, approvals, and receipts for three years.
Student Orgs: Student organizations must file annual affidavits certifying they have not accepted funds from foreign adversaries.

Fees & Costs

Civil Penalties: Vendors submitting false ownership certifications face a penalty of $250,000 or 2x the contract amount (whichever is greater).
Administrative Penalty: False certification results in debarment from state contracting for 5 years.
Operational Costs: Expect increased legal spend for vetting international partnerships and software supply chains.

Strategic Ambiguities & Considerations

"De Minimis" Value: The law bans gifts from foreign adversaries unless they are "de minimis," but does not define the dollar amount. The THECB must set this via rule. Until defined, assume a zero-tolerance threshold.
"Controlled By": The definition of foreign "control" regarding software companies is not explicitly defined in the statute (e.g., does a 10% minority stake by a Chinese firm count?). The Security Council will likely adopt federal Department of Commerce standards, but this remains a gray area until 2026.
"Low-Risk" Waivers: The Security Council will define which research positions are "low-risk" and exempt from deep background checks. Currently, no list exists.

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Legislative Timeline

This bill's path through the Texas Legislature

Official Analysis

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Senate Sponsors

Sen. Bryan HughesRepublican · Primary Sponsor

Cosponsors (7)

Bill Text(with markup)

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Frequently Asked Questions

Common questions about HB127

What does Texas HB127 do?

HB127 enacts a sweeping national security framework for Texas higher education that imposes immediate downstream liability on private sector vendors, EdTech providers, and research partners. The law creates a new "Foreign Adversary" vetting regime for state contracts and escalates the criminal penalty for theft of trade secrets to a Second-Degree Felony if foreign agents are involved. Implementation Timeline Effective Date: June 20, 2025 (Immediate effect due to supermajority vote).

Who authored HB127?

HB127 was authored by Texas Representative Terry Wilson during the Regular Session.

When was HB127 signed into law?

HB127 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB127?

HB127 is enforced by Department of Public Safety (Consultation on background checks), Higher Education Research Security Council (New Entity), Office of the Attorney General (Civil enforcement against vendors), State Auditor's Office (Compliance audits) and Texas Higher Education Coordinating Board (THECB).

How urgent is compliance with HB127?

The compliance urgency for HB127 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB127?

The cost impact of HB127 is estimated as "high". This may vary based on industry and implementation requirements.

What topics does HB127 address?

HB127 addresses topics including education, education--higher, education--higher--general, education--higher--institutions & programs and intergovernmental relations.

Legislative data provided by LegiScanLast updated: November 25, 2025

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