AL
Alabama Senate Bill SB220

Alabama 2024 Regular Session

Alabama Senate Bill SB220 Compare Versions

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33 SB220
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55 By Senators Roberts, Orr, Jones, Shelnutt
66 RFD: County and Municipal Government
77 First Read: 19-Mar-24
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12-5 SB220 Engrossed
12+5 WD2J55E-1 03/18/2024 CMH* (L)bm 2024-374
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1414 First Read: 19-Mar-24
15-A BILL
16-TO BE ENTITLED
17-AN ACT
18-Public contracts; to prohibit certain business entities
19-from entering into public contracts with a public awarding
20-authority; to provide criminal and civil penalties for a
21-violation; and in connection therewith would have as its
22-purpose or effect the requirement of a new or increased
23-expenditure of local funds within the meaning of Section
24-111.05 of the Constitution of Alabama of 2022.
25-BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
26-Section 1. The Legislature finds and declares the
27-following:
28-(1) The Chinese Communist Party's (CCP) authoritarian
29-governance over the People's Republic of China (PRC) includes
30-extensive efforts to destroy any meaningful distinction
31-between the CCP, the PRC state, and commercial entities in the
32-PRC.
33-(2) Dealings with PRC commercial entities tend to be
34-less commercially sound because the entities are unusually
35-likely to be acting on noncommercial motivations and carry
36-increased political risk, including the risk of federal
15+SYNOPSIS:
16+Under existing law, all public contracts by
17+certain local awarding authorities for goods or
18+services involving $30,000 or more must be entered into
19+by free and open competitive bidding, on sealed bids,
20+to the lowest responsible and responsive bidder.
21+Also under existing law, the method of awarding
22+state contracts for goods and services is subject to
23+the state procurement laws administered by the Division
24+of Procurement within the Department of Finance.
25+This bill would prohibit any state or local
26+awarding authority from awarding a contract to an
27+entity organized under the laws of the People's
28+Republic of China or that is owned or operated by the
29+People's Republic of China.
30+This bill would also provide criminal and civil
31+penalties for a violation.
32+Section 111.05 of the Constitution of Alabama of
33+2022, prohibits a general law whose purpose or effect
34+would be to require a new or increased expenditure of
35+local funds from becoming effective with regard to a
36+local governmental entity without enactment by a 2/3
37+vote unless: it comes within one of a number of
38+specified exceptions; it is approved by the affected
39+entity; or the Legislature appropriates funds, or
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66-increased political risk, including the risk of federal
67-sanctions from the United States government.
68-(3) While no PRC commercial entity is beyond the reach
69-of the CCP, PRC state-owned entities present heightened
70-concerns and threaten the State of Alabama's security,
71-including by making accessible to the CCP and PRC government
72-information about the structure, operations, resources, and
73-infrastructure of the government of this state.
74-(4) Business transactions with PRC commercial entities,
75-especially PRC state-owned entities, threaten the privacy and
76-security of the residents of this state, especially when the
77-personal information of the residents of this state is
78-involved in the business transactions.
79-Section 2. (a) As used in this act, the following terms
80-have the following meanings:
81-(1) COMPANY. Any sole proprietorship, organization,
82-association, corporation, partnership, joint venture, limited
83-partnership, limited liability partnership, limited liability
84-company, or other entity or business association, including
85-all wholly owned subsidiaries, majority owned subsidiaries,
86-parent companies, or affiliates of such entities or business
87-associations, that exist for the purpose of making profit.
88-(2) INFORMATION OR COMMUNICATIONS TECHNOLOGIES.
89-Includes any equipment used in fixed and mobile networks that
90-provides high-speed, switched, broadband telecommunications
91-capability, provided the equipment includes or uses electronic
92-components.
93-(3) OWNED. Includes an ownership interest in whole or
94-in part. For purposes of a publicly traded company, the term
69+entity; or the Legislature appropriates funds, or
70+provides a local source of revenue, to the entity for
71+the purpose.
72+The purpose or effect of this bill would be to
73+require a new or increased expenditure of local funds
74+within the meaning of the section. However, the bill
75+does not require approval of a local governmental
76+entity or enactment by a 2/3 vote to become effective
77+because it comes within one of the specified exceptions
78+contained in the section.
79+A BILL
80+TO BE ENTITLED
81+AN ACT
82+Public contracts; to prohibit certain companies
83+affiliated with the People's Republic of China from entering
84+into public contracts with a public awarding authority; to
85+provide criminal and civil penalties for a violation; and in
86+connection therewith would have as its purpose or effect the
87+requirement of a new or increased expenditure of local funds
88+within the meaning of Section 111.05 of the Constitution of
89+Alabama of 2022.
90+BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
91+Section 1. The Legislature finds and declares the
92+following:
93+(1) The Chinese Communist Party's (CCP) authoritarian
94+governance over the People's Republic of China (PRC) includes
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124-in part. For purposes of a publicly traded company, the term
125-means any share of ownership that includes the ability to
126-direct or influence the operations of the company, the ability
127-to appoint or discharge any board member, officer, or
128-director, or any other rights beyond those available to a
129-retail investor holding an equivalent share of ownership.
130-(4) PUBLIC ENTITY. The state or any department, agency,
131-commission, or other body of the state, including publicly
132-funded institutions of higher education, and any local
133-governing body, political subdivision, or school district, and
134-any other public or private agency, person, partnership,
135-corporation, or business entity acting on behalf of any public
136-entity.
137-(5) SCRUTINIZED COMPANY. A company to which either of
138-the following applies:
139-a. Is a company on the Federal Communications
140-Commission's Covered List, as provided in 47 C.F.R ยง 1.50002,
141-or Section 1260H of the National Defense Authorization Act for
142-Fiscal Year 2021, which provides communications equipment or
143-services that are deemed to pose an unacceptable risk to the
144-national security of the United States or the security and
145-safety of persons in the United States.
146-b. Any subsidiary or parent company of any company
147-described in this subdivision.
148-(b) A scrutinized company shall be ineligible to, and
149-shall not bid on, submit a proposal for, or enter into,
150-directly or indirectly through a third party, any contract or
151-contract renewal with any public awarding authority for any
152-information or communications technologies.
124+governance over the People's Republic of China (PRC) includes
125+extensive efforts to destroy any meaningful distinction
126+between the CCP, the PRC state, and commercial entities in the
127+PRC.
128+(2) Dealings with PRC commercial entities tend to be
129+less commercially sound because the entities are unusually
130+likely to be acting on noncommercial motivations and carry
131+increased political risk, including the risk of federal
132+sanctions from the United States government.
133+(3) While no PRC commercial entity is beyond the reach
134+of the CCP, PRC state-owned entities present heightened
135+concerns and threaten the State of Alabama's security,
136+including by making accessible to the CCP and PRC government
137+information about the structure, operations, resources, and
138+infrastructure of the government of this state.
139+(4) Business transactions with PRC commercial entities,
140+especially PRC state-owned entities, threaten the privacy and
141+security of the residents of this state, especially when the
142+personal information of the residents of this state is
143+involved in the business transactions.
144+Section 2. (a) As used in this act, the following terms
145+have the following meanings:
146+(1) COMMUNICATIONS TECHNOLOGIES. Includes
147+communications technologies and the components, networks,
148+systems, or services thereof.
149+(2) COMPANY. Any sole proprietorship, organization,
150+association, corporation, partnership, joint venture, limited
151+partnership, limited liability partnership, limited liability
152+company, or other entity or business association, including
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182-information or communications technologies.
183-(c) No public awarding authority shall enter into any
184-contract or contract renewal that would result in any public
185-funds being transferred under either of the following
186-circumstances:
187-(1) To a scrutinized company in connection with any
188-information or communications technologies.
189-(2) To any company in connection with any information
190-or communications technologies that originate with a
191-scrutinized company.
192-(d) A public awarding authority shall require a company
193-that submits a bid or proposal with respect to a contract for
194-goods or services or that enters into any contract or contract
195-renewal with any public awarding authority for any information
196-or communications technologies to certify all of the
197-following:
198-(1) The company is not a scrutinized company.
199-(2) The company will not subcontract with any
200-scrutinized company for any aspect of its performance of the
201-contract.
202-(3) That any information or communications technologies
203-that are to be provided pursuant to the contract do not
204-originate with a scrutinized company.
205-(e) Any contract determined by the Chief Procurement
206-Officer to be in violation of this act shall be void ab
207-initio.
208-(f) Any person who knowingly violates this act shall be
209-guilty of a Class C felony.
210-(g) In addition to the penalties provided in subsection
182+company, or other entity or business association, including
183+all wholly owned subsidiaries, majority owned subsidiaries,
184+parent companies, or affiliates of such entities or business
185+associations, that exist for the purpose of making profit.
186+(3) OWNED. Includes an ownership interest in whole or
187+in part. For purposes of a publicly traded company, the term
188+means any share of ownership that includes the ability to
189+direct or influence the operations of the company, the ability
190+to appoint or discharge any board member, officer, or
191+director, or any other rights beyond those available to a
192+retail investor holding an equivalent share of ownership.
193+(4) PUBLIC ENTITY. The state or any department, agency,
194+commission, or other body of the state, including publicly
195+funded institutions of higher education, and any local
196+governing body, political subdivision, or school district, and
197+any other public or private agency, person, partnership,
198+corporation, or business entity acting on behalf of any public
199+entity.
200+(5) SCRUTINIZED COMPANY. A company to which any of the
201+following applies:
202+a. Is organized under the laws of the People's Republic
203+of China (PRC) or has its principal place of business in the
204+PRC.
205+b. Is owned or operated, in whole or in part, by the
206+government of the PRC or any entity controlled by the
207+government of the PRC.
208+c. Any subsidiary or parent company of any company
209+described in this subdivision.
210+(b) A scrutinized company shall be ineligible to, and
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240-(g) In addition to the penalties provided in subsection
241-(f), the person who knowingly violates this act shall be
242-subject to both of the following:
243-(1) Liable for a civil penalty in an amount that is
244-equal to the greater of: (i) two hundred fifty thousand
245-dollars ($250,000); (ii) twice the amount of the contract for
246-which a bid or proposal was submitted; or (iii) the amount of
247-any losses suffered by the public awarding authority or the
248-state as a result of the violation.
249-(2) Ineligible to enter into any contract with any
250-public awarding authority in the state for a period of 10
251-years.
252-(h) The Attorney General may bring an action in any
253-court of competent jurisdiction against any person that
254-violates this act.
255-(i) The Chief Procurement Officer shall adopt rules to
256-implement this section. The rules shall include a procedure
257-for a public awarding authority to challenge a company's
258-certification under this section and a procedure to obtain a
259-determination from the Chief Procurement Officer that a
260-potential contract complies with the requirements of this
261-section. The rules shall not amend the definition of
262-"scrutinized company" as defined under this section.
263-Section 3. Although this bill would have as its purpose
264-or effect the requirement of a new or increased expenditure of
265-local funds, the bill is excluded from further requirements
266-and application under Section 111.05 of the Constitution of
267-Alabama of 2022, because the bill defines a new crime or
268-amends the definition of an existing crime.
240+(b) A scrutinized company shall be ineligible to, and
241+shall not bid on, submit a proposal for, or enter into,
242+directly or indirectly through a third party, any contract or
243+contract renewal with any public awarding authority for any
244+information or communications technologies.
245+(c) No public awarding authority shall enter into any
246+contract or contract renewal that would result in any public
247+funds being transferred under either of the following
248+circumstances:
249+(1) To a scrutinized company in connection with any
250+information or communications technologies.
251+(2) To any company in connection with any information
252+or communications technologies that originate with a
253+scrutinized company.
254+(d) A public awarding authority shall require a company
255+that submits a bid or proposal with respect to a contract for
256+goods or services or that enters into any contract or contract
257+renewal with any public awarding authority for any information
258+or communications technologies to certify all of the
259+following:
260+(1) The company is not a scrutinized company.
261+(2) The company will not subcontract with any
262+scrutinized company for any aspect of its performance of the
263+contract.
264+(3) That any products or services that are to be
265+provided pursuant to the contract do not originate with a
266+scrutinized company.
267+(e) Any contract determined by the Chief Procurement
268+Officer to be in violation of this act shall be void ab
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298-amends the definition of an existing crime.
299-Section 4. This act shall become effective on October
300-1, 2024.
298+Officer to be in violation of this act shall be void ab
299+initio.
300+(f) Any person who knowingly violates this act shall be
301+guilty of a Class C felony.
302+(g) In addition to the penalties provided in subsection
303+(f), the person shall be subject to both of the following:
304+(1) Liable for a civil penalty in an amount that is
305+equal to the greater of: (i) two hundred fifty thousand
306+dollars ($250,000); (ii) twice the amount of the contract for
307+which a bid or proposal was submitted; or (iii) the amount of
308+any losses suffered by the public awarding authority or the
309+state as a result of the violation.
310+(2) Ineligible to enter into any contract with any
311+public awarding authority in the state for a period of 10
312+years.
313+(h) The Attorney General may bring an action in any
314+court of competent jurisdiction against any person that
315+violates this act.
316+(i) The Chief Procurement Officer shall adopt rules to
317+implement this section. The rules shall include a procedure
318+for a public awarding authority to challenge a company's
319+certification under this section and a procedure to obtain a
320+determination from the Chief Procurement Officer that a
321+potential contract complies with the requirements of this
322+section.
323+Section 3. Although this bill would have as its purpose
324+or effect the requirement of a new or increased expenditure of
325+local funds, the bill is excluded from further requirements
326+and application under Section 111.05 of the Constitution of
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302-142 SB220 Engrossed
303-Page 7
304-1, 2024.
305-Senate
306-Read for the first time and referred
307-to the Senate committee on County
308-and Municipal Government
309-................19-Mar-24
310-Read for the second time and placed
311-on the calendar:
312- 0 amendments
313-................21-Mar-24
314-Read for the third time and passed
315-as amended
316-Yeas 34
317-Nays 0
318-Abstains 0
319-................09-Apr-24
320-Patrick Harris,
321-Secretary.
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356+and application under Section 111.05 of the Constitution of
357+Alabama of 2022, because the bill defines a new crime or
358+amends the definition of an existing crime.
359+Section 4. This act shall become effective on October
360+1, 2024.
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