SB220ENGROSSED
Page 0
SB220
WIITEEE-2
By Senators Roberts, Orr, Jones, Shelnutt
RFD: County and Municipal Government
First Read: 19-Mar-24
1
2
3
4
5 SB220 Engrossed
Page 1
First Read: 19-Mar-24
A BILL
TO BE ENTITLED
AN ACT
Public contracts; to prohibit certain business entities
from entering into public contracts with a public awarding
authority; to provide criminal and civil penalties for a
violation; and in connection therewith would have as its
purpose or effect the requirement of a new or increased
expenditure of local funds within the meaning of Section
111.05 of the Constitution of Alabama of 2022.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. The Legislature finds and declares the
following:
(1) The Chinese Communist Party's (CCP) authoritarian
governance over the People's Republic of China (PRC) includes
extensive efforts to destroy any meaningful distinction
between the CCP, the PRC state, and commercial entities in the
PRC.
(2) Dealings with PRC commercial entities tend to be
less commercially sound because the entities are unusually
likely to be acting on noncommercial motivations and carry
increased political risk, including the risk of federal
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 SB220 Engrossed
Page 2
increased political risk, including the risk of federal
sanctions from the United States government.
(3) While no PRC commercial entity is beyond the reach
of the CCP, PRC state-owned entities present heightened
concerns and threaten the State of Alabama's security,
including by making accessible to the CCP and PRC government
information about the structure, operations, resources, and
infrastructure of the government of this state.
(4) Business transactions with PRC commercial entities,
especially PRC state-owned entities, threaten the privacy and
security of the residents of this state, especially when the
personal information of the residents of this state is
involved in the business transactions.
Section 2. (a) As used in this act, the following terms
have the following meanings:
(1) COMPANY. Any sole proprietorship, organization,
association, corporation, partnership, joint venture, limited
partnership, limited liability partnership, limited liability
company, or other entity or business association, including
all wholly owned subsidiaries, majority owned subsidiaries,
parent companies, or affiliates of such entities or business
associations, that exist for the purpose of making profit.
(2) INFORMATION OR COMMUNICATIONS TECHNOLOGIES.
Includes any equipment used in fixed and mobile networks that
provides high-speed, switched, broadband telecommunications
capability, provided the equipment includes or uses electronic
components.
(3) OWNED. Includes an ownership interest in whole or
in part. For purposes of a publicly traded company, the term
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56 SB220 Engrossed
Page 3
in part. For purposes of a publicly traded company, the term
means any share of ownership that includes the ability to
direct or influence the operations of the company, the ability
to appoint or discharge any board member, officer, or
director, or any other rights beyond those available to a
retail investor holding an equivalent share of ownership.
(4) PUBLIC ENTITY. The state or any department, agency,
commission, or other body of the state, including publicly
funded institutions of higher education, and any local
governing body, political subdivision, or school district, and
any other public or private agency, person, partnership,
corporation, or business entity acting on behalf of any public
entity.
(5) SCRUTINIZED COMPANY. A company to which either of
the following applies:
a. Is a company on the Federal Communications
Commission's Covered List, as provided in 47 C.F.R ยง 1.50002,
or Section 1260H of the National Defense Authorization Act for
Fiscal Year 2021, which provides communications equipment or
services that are deemed to pose an unacceptable risk to the
national security of the United States or the security and
safety of persons in the United States.
b. Any subsidiary or parent company of any company
described in this subdivision.
(b) A scrutinized company shall be ineligible to, and
shall not bid on, submit a proposal for, or enter into,
directly or indirectly through a third party, any contract or
contract renewal with any public awarding authority for any
information or communications technologies.
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84 SB220 Engrossed
Page 4
information or communications technologies.
(c) No public awarding authority shall enter into any
contract or contract renewal that would result in any public
funds being transferred under either of the following
circumstances:
(1) To a scrutinized company in connection with any
information or communications technologies.
(2) To any company in connection with any information
or communications technologies that originate with a
scrutinized company.
(d) A public awarding authority shall require a company
that submits a bid or proposal with respect to a contract for
goods or services or that enters into any contract or contract
renewal with any public awarding authority for any information
or communications technologies to certify all of the
following:
(1) The company is not a scrutinized company.
(2) The company will not subcontract with any
scrutinized company for any aspect of its performance of the
contract.
(3) That any information or communications technologies
that are to be provided pursuant to the contract do not
originate with a scrutinized company.
(e) Any contract determined by the Chief Procurement
Officer to be in violation of this act shall be void ab
initio.
(f) Any person who knowingly violates this act shall be
guilty of a Class C felony.
(g) In addition to the penalties provided in subsection
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112 SB220 Engrossed
Page 5
(g) In addition to the penalties provided in subsection
(f), the person who knowingly violates this act shall be
subject to both of the following:
(1) Liable for a civil penalty in an amount that is
equal to the greater of: (i) two hundred fifty thousand
dollars ($250,000); (ii) twice the amount of the contract for
which a bid or proposal was submitted; or (iii) the amount of
any losses suffered by the public awarding authority or the
state as a result of the violation.
(2) Ineligible to enter into any contract with any
public awarding authority in the state for a period of 10
years.
(h) The Attorney General may bring an action in any
court of competent jurisdiction against any person that
violates this act.
(i) The Chief Procurement Officer shall adopt rules to
implement this section. The rules shall include a procedure
for a public awarding authority to challenge a company's
certification under this section and a procedure to obtain a
determination from the Chief Procurement Officer that a
potential contract complies with the requirements of this
section. The rules shall not amend the definition of
"scrutinized company" as defined under this section.
Section 3. Although this bill would have as its purpose
or effect the requirement of a new or increased expenditure of
local funds, the bill is excluded from further requirements
and application under Section 111.05 of the Constitution of
Alabama of 2022, because the bill defines a new crime or
amends the definition of an existing crime.
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140 SB220 Engrossed
Page 6
amends the definition of an existing crime.
Section 4. This act shall become effective on October
1, 2024.
141
142 SB220 Engrossed
Page 7
1, 2024.
Senate
Read for the first time and referred
to the Senate committee on County
and Municipal Government
................19-Mar-24
Read for the second time and placed
on the calendar:
0 amendments
................21-Mar-24
Read for the third time and passed
as amended
Yeas 34
Nays 0
Abstains 0
................09-Apr-24
Patrick Harris,
Secretary.
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163