(a) In this section, “diversity, equity, and inclusion office” means an office, division, or other unit of an institution of higher education established for the purpose of:
(1) influencing hiring or employment practices at the institution with respect to race, sex, color, or ethnicity, other than through the use of color-blind and sex-neutral hiring processes in accordance with any applicable state and federal antidiscrimination laws;
(2) promoting differential treatment of or providing special benefits to individuals on the basis of race, color, or ethnicity;
(3) promoting policies or procedures designed or implemented in reference to race, color, or ethnicity, other than policies or procedures approved in writing by the institution’s general counsel and the Texas Higher Education Coordinating Board for the sole purpose of ensuring compliance with any applicable court order or state or federal law; or
(4) conducting trainings, programs, or activities designed or implemented in reference to race, color, ethnicity, gender identity, or sexual orientation, other than trainings, programs, or activities developed by an attorney and approved in writing by the institution’s general counsel and the Texas Higher Education Coordinating Board for the sole purpose of ensuring compliance with any applicable court order or state or federal law.
(b) The governing board of an institution of higher education shall ensure that each unit of the institution:
(1) does not, except as required by federal law:
(A) establish or maintain a diversity, equity, and inclusion office;
(B) hire or assign an employee of the institution or contract with a third party to perform the duties of a diversity, equity, and inclusion office;
(C) compel, require, induce, or solicit any person to provide a diversity, equity, and inclusion statement or give preferential consideration to any person based on the provision of a diversity, equity, and inclusion statement;
(D) give preference on the basis of race, sex, color, ethnicity, or national origin to an applicant for employment, an employee, or a participant in any function of the institution; or
(E) require as a condition of enrolling at the institution or performing any institution function any person to participate in diversity, equity, and inclusion training, which:
(i) includes a training, program, or activity designed or implemented in reference to race, color, ethnicity, gender identity, or sexual orientation; and
(ii) does not include a training, program, or activity developed by an attorney and approved in writing by the institution’s general counsel and the Texas Higher Education Coordinating Board for the sole purpose of ensuring compliance with any applicable court order or state or federal law; and
(2) adopts policies and procedures for appropriately disciplining, including by termination, an employee or contractor of the institution who engages in conduct in violation of Subdivision (1).

(c) Nothing in this section may be construed to limit or prohibit an institution of higher education or an employee of an institution of higher education from, for purposes of applying for a grant or complying with the terms of accreditation by an accrediting agency, submitting to the grantor or accrediting agency a statement that:
(1) highlights the institution’s work in supporting:
(A) first-generation college students;
(B) low-income students; or
(C) underserved student populations; or
(2) certifies compliance with state and federal antidiscrimination laws.
(d) Subsection (b)(1) may not be construed to apply to:
(1) academic course instruction;
(2) scholarly research or a creative work by an institution of higher education’s students, faculty, or other research personnel or the dissemination of that research or work;
(3) an activity of a student organization registered with or recognized by an institution of higher education;
(4) guest speakers or performers on short-term engagements;
(5) a policy, practice, procedure, program, or activity to enhance student academic achievement or postgraduate outcomes that is designed and implemented without regard to race, sex, color, or ethnicity;
(6) data collection; or
(7) student recruitment or admissions.
(e) An institution of higher education may not spend money appropriated to the institution for a state fiscal year until the governing board of the institution submits to the legislature and the Texas Higher Education Coordinating Board a report certifying the board’s compliance with this section during the preceding state fiscal year.
(f) In the interim between each regular session of the legislature, the governing board of each institution of higher education, or the board’s designee, shall testify before the standing legislative committees with primary jurisdiction over higher education at a public hearing of the committee regarding the board’s compliance with this section.
(g) The state auditor shall periodically conduct a compliance audit of each institution of higher education to determine whether the institution has spent state money in violation of this section. The state auditor shall adopt a schedule by which the state auditor will conduct compliance audits under this subsection. The schedule must ensure that each institution of higher education is audited at least once every four years.
(h) If the state auditor determines pursuant to a compliance audit conducted under Subsection (g) that an institution of higher education has spent state money in violation of this section, the institution:
(1) must cure the violation not later than the 180th day after the date on which the determination is made; and
(2) if the institution fails to cure the violation during the period described by Subdivision (1), is ineligible to receive formula funding increases, institutional enhancements, or exceptional items during the state fiscal biennium immediately following the state fiscal biennium in which the determination is made.
(i) A student or employee of an institution of higher education who is required to participate in training in violation of Subsection (b)(1)(E) may bring an action against the institution for injunctive or declaratory relief.
(j) The Texas Higher Education Coordinating Board, in coordination with institutions of higher education, shall conduct a biennial study to identify the impact of the implementation of this section on the application rate, acceptance rate, matriculation rate, retention rate, grade point average, and graduation rate of students at institutions of higher education, disaggregated by race, sex, and ethnicity. Not later than December 1 of each even-numbered year, the coordinating board shall submit to the legislature a report on the results of the study and any recommendations for legislative or other action. This subsection expires September 1, 2029.