SENATE, No. 4275 STATE OF NEW JERSEY 221st LEGISLATURE INTRODUCED MARCH 24, 2025
SENATE, No. 4275
STATE OF NEW JERSEY
221st LEGISLATURE
INTRODUCED MARCH 24, 2025
Sponsored by: Senator MICHAEL L. TESTA, JR. District 1 (Atlantic, Cape May and Cumberland) Senator DOUGLAS J. STEINHARDT District 23 (Hunterdon, Somerset and Warren) Co-Sponsored by: Senators O'Scanlon and Amato SYNOPSIS Prohibits State contractors from distributing data to foreign adversaries. CURRENT VERSION OF TEXT As introduced.
Sponsored by:
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
Senator DOUGLAS J. STEINHARDT
District 23 (Hunterdon, Somerset and Warren)
Co-Sponsored by:
Senators O'Scanlon and Amato
SYNOPSIS
Prohibits State contractors from distributing data to foreign adversaries.
CURRENT VERSION OF TEXT
As introduced.
An Act prohibiting State contractors from distributing data to foreign adversaries and supplementing Title 52 of the Revised Statutes. Be It Enacted by the Senate and General Assembly of the State of New Jersey: 1. a. A person or entity that is identified on a list created pursuant to subsection b. of this section as a person or entity that has been determined to sell, transfer, disclose, or provide data to a foreign adversary, or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, shall be ineligible to and shall not: (1) enter into or renew a contract with a State agency for the provision of goods or services or the purchase of bonds or other obligations; (2) enter into or renew a subcontract with a State contractor for the provision of goods or services or the purchase of bonds or other obligations; (3) file or renew a Public Works Contractor Registration with the Department of Labor and Workforce Development; (4) be approved for, or continue to receive an economic development subsidy from, the Economic Development Authority in but not of the Department of the Treasury, be awarded a municipal property tax abatement, or make or enter into a payment in lieu of property tax agreement; (5) apply for or receive a tax clearance certificate from the Director of the Division of Taxation in the Department of the Treasury; (6) be certified by the Department of Community Affairs as an urban renewal entity for purposes of the "Long Term Tax Exemption Law," P.L.1991, c.431 (C.40A:20-1 et seq.); and (7) be designated as a redeveloper by a public agency for the purpose of planning, replanning, construction, or undertaking of any project or redevelopment work in accordance with the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et seq.). b. Immediately upon the effective date of this section, the Department of the Treasury shall, using credible information available to the public, begin developing a list of persons or entities it determines sell, transfer, disclose, or provide data to foreign adversaries or entities directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary. The department is authorized to consult an independent research firm that specializes in global security risk for portfolio determinations, as selected by the State Treasurer, to develop the list. The department shall update the list on a rolling basis. Beginning after the 91st day next following the date of enactment of this section, the department shall be required to update the list at least every six months. Before including a person or entity on the initial list or an updated list, the department shall: (1) provide notice of its intent to include the person or entity on the list. The notice shall inform the person or entity that inclusion on the list would make the person or entity ineligible to engage in any of the enumerated activities specified by subsection a. of this section; and (2) provide the person or entity with an opportunity to comment, in writing, that the person or entity does not sell, transfer, disclose, or provide data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary. If the person or entity demonstrates to the department that the person or entity does not sell, transfer, disclose, or provide data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, the person or entity shall not be included on the list. c. A State agency shall require a person or entity seeking to engage in any of the enumerated activities specified by subsection a. of this section to certify, before the contract is awarded, renewed, amended, or extended, or before applying for certification as an urban renewal entity or designation as a redeveloper, that the person or entity is not identified on a list created pursuant to this section as a person or entity selling, transferring, disclosing, or providing data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary. The certification required shall be executed on behalf of the applicable person or entity by an authorized officer or representative of the person or entity. If a person or entity is unable to make the certification required because the person or entity, or one of the person or entity's parents, subsidiaries, or affiliates, has sold, transferred, disclosed, or provided data to a foreign adversary or an entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, the person or entity shall provide to the State agency concerned, prior to the deadline for delivery of such certification, a detailed and precise description of such transaction of data, which shall be provided under penalty of perjury. The certifications and disclosures provided under this section shall be disclosed to the public. d. (1) If, after using credible information available to the public and after providing notice and an opportunity to comment in writing for the person or entity to demonstrate that it does not sell, transfer, disclose, or provide data to a foreign adversary or an entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, the department determines that the person or entity has submitted a false certification pursuant to this section, and the person or entity fails to demonstrate to the department that the person or entity has ceased its transactions of data with foreign adversaries within 90 days after the determination of a false certification, the following shall apply: (a) pursuant to an action under paragraph (2) of this subsection, a civil penalty in an amount that is equal to the greater of $1,000,000 or twice the amount of the bid or application listed in subsection a. of this section for which the false certification was made; (b) termination of an existing contract, registration, economic development subsidy, tax abatement, payment in lieu of property tax agreement, certification, or designation as deemed appropriate by the issuing agency or the application process for any of the foregoing; and (c) ineligibility to engage in any of the enumerated activities specified by subsection a. of this section for a period of five years from the date of the determination that the person or entity submitted the false certification, provided that the person or entity has ceased its transactions of data with foreign adversaries. (2) The department shall report to the Attorney General the name of the person or entity that the State agency determines has submitted a false certification under this section, together with its information as to the false certification, and the Attorney General shall determine whether to bring a civil action against the person or entity to collect the penalty described in this subsection. Only one civil action against the person or entity to collect the penalty described in this subsection may be brought for a false certification on a bid or application listed in subsection a. of this section. A civil action to collect such penalty shall commence within three years from the date the certification is made. e. The requirements of this section shall not apply to: (1) the transmission of sensitive data pursuant to a lawful subpoena, court order, or federal or State legal obligation; (2) data sharing required by legitimate international business transactions, provided such transactions do not compromise national security and are consistent with United States export control laws; and (3) publicly available data that does not contain personally identifiable information or trade secrets. f. For purposes of this act, P.L. , c. (C. ) (pending before the Legislature as this bill): "Data" means information, facts, concepts, or instructions contained in a computer, computer equipment, or computer system. It shall also include, but not be limited to, any alphanumeric, hexadecimal, octal or binary code. "Economic development subsidy" means the provision of an amount of funds to a recipient with a value of greater than $25,000 for the purpose of stimulating economic development in New Jersey, including, but not limited to, any investment, bond, grant, loan, loan guarantee, matching fund, tax credit, or other tax expenditure. "Foreign adversary" means any foreign government or foreign nongovernment person determined by the United States Secretary of Commerce to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons. "Person or entity" means any of the following: (1) a natural person, corporation, company, limited partnership, limited liability partnership, limited liability company, business association, sole proprietorship, joint venture, partnership, society, trust, or any other nongovernmental entity, organization, or group; (2) any governmental entity or instrumentality of a government, including a multilateral development institution, as defined in Section 1701(c)(3) of the International Financial Institutions Act, 22 U.S.C. 262r(c)(3); or (3) any parent, successor, subunit, direct or indirect subsidiary, or any entity under common ownership or control with, any entity described in paragraph (1) or (2). "State agency" means any of the principal departments in the Executive Branch of the State government, and any division, board, bureau, office, commission or other instrumentality within or created by such department; the Legislature of the State and any office, board, bureau or commission within or created by the Legislative Branch; and any independent State authority, commission, instrumentality or agency that is authorized by law to award public contracts. "State agency" shall also include a public research university that is not a State college subject to the provisions of the "State College Contracts Law," P.L.1986, c.43 (C.18A:64-52 et seq.). "State contractor" means a business organization that seeks to enter, or has entered into, a contract with a State agency. 2. A State agency shall not bank with, have or hold stock, debt, or other equity investments of, or maintain insurance coverage through a policy issued by a financial institution that is included in the Department of the Treasury's list created pursuant to subsection b. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) for selling, transferring, disclosing, or providing data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary. 3. The Department of the Treasury shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt such rules and regulations as may be necessary to implement this act. 4. This act shall take effect immediately. STATEMENT This bill prohibits State contractors from selling, transferring, disclosing, or providing data to a foreign adversary. Pursuant to the bill, a person or entity that sells, transfers, discloses, or provides data to foreign adversaries, or entities directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, will be placed on a list by the Department of the Treasury and will not be permitted to contract with State agencies, subcontract with State contractors, file or renew a Public Works Contractor Registration, receive an economic development subsidy from the Economic Development Authority, be awarded a municipal property tax abatement, make or enter into a payment in-lieu of property tax agreement, apply for or receive a tax clearance certificate from the Division of Taxation, be certified as an urban renewal entity for purposes of the "Long Term Tax Exemption Law," or be designated as a redeveloper by a public agency for the purposes of the "Local Redevelopment and Housing Law." The bill also prohibits the State from banking with, having or holding stock, debt, or other equity investments of, or maintaining insurance coverage through a policy issued by a financial institution that has sold, transferred, disclosed, or provided data to a foreign adversary or an entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary.
An Act prohibiting State contractors from distributing data to foreign adversaries and supplementing Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A person or entity that is identified on a list created pursuant to subsection b. of this section as a person or entity that has been determined to sell, transfer, disclose, or provide data to a foreign adversary, or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, shall be ineligible to and shall not:
(1) enter into or renew a contract with a State agency for the provision of goods or services or the purchase of bonds or other obligations;
(2) enter into or renew a subcontract with a State contractor for the provision of goods or services or the purchase of bonds or other obligations;
(3) file or renew a Public Works Contractor Registration with the Department of Labor and Workforce Development;
(4) be approved for, or continue to receive an economic development subsidy from, the Economic Development Authority in but not of the Department of the Treasury, be awarded a municipal property tax abatement, or make or enter into a payment in lieu of property tax agreement;
(5) apply for or receive a tax clearance certificate from the Director of the Division of Taxation in the Department of the Treasury;
(6) be certified by the Department of Community Affairs as an urban renewal entity for purposes of the "Long Term Tax Exemption Law," P.L.1991, c.431 (C.40A:20-1 et seq.); and
(7) be designated as a redeveloper by a public agency for the purpose of planning, replanning, construction, or undertaking of any project or redevelopment work in accordance with the "Local Redevelopment and Housing Law," P.L.1992, c.79 (C.40A:12A-1 et seq.).
b. Immediately upon the effective date of this section, the Department of the Treasury shall, using credible information available to the public, begin developing a list of persons or entities it determines sell, transfer, disclose, or provide data to foreign adversaries or entities directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary. The department is authorized to consult an independent research firm that specializes in global security risk for portfolio determinations, as selected by the State Treasurer, to develop the list. The department shall update the list on a rolling basis. Beginning after the 91st day next following the date of enactment of this section, the department shall be required to update the list at least every six months. Before including a person or entity on the initial list or an updated list, the department shall:
(1) provide notice of its intent to include the person or entity on the list. The notice shall inform the person or entity that inclusion on the list would make the person or entity ineligible to engage in any of the enumerated activities specified by subsection a. of this section; and
(2) provide the person or entity with an opportunity to comment, in writing, that the person or entity does not sell, transfer, disclose, or provide data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary. If the person or entity demonstrates to the department that the person or entity does not sell, transfer, disclose, or provide data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, the person or entity shall not be included on the list.
c. A State agency shall require a person or entity seeking to engage in any of the enumerated activities specified by subsection a. of this section to certify, before the contract is awarded, renewed, amended, or extended, or before applying for certification as an urban renewal entity or designation as a redeveloper, that the person or entity is not identified on a list created pursuant to this section as a person or entity selling, transferring, disclosing, or providing data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary. The certification required shall be executed on behalf of the applicable person or entity by an authorized officer or representative of the person or entity. If a person or entity is unable to make the certification required because the person or entity, or one of the person or entity's parents, subsidiaries, or affiliates, has sold, transferred, disclosed, or provided data to a foreign adversary or an entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, the person or entity shall provide to the State agency concerned, prior to the deadline for delivery of such certification, a detailed and precise description of such transaction of data, which shall be provided under penalty of perjury. The certifications and disclosures provided under this section shall be disclosed to the public.
d. (1) If, after using credible information available to the public and after providing notice and an opportunity to comment in writing for the person or entity to demonstrate that it does not sell, transfer, disclose, or provide data to a foreign adversary or an entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, the department determines that the person or entity has submitted a false certification pursuant to this section, and the person or entity fails to demonstrate to the department that the person or entity has ceased its transactions of data with foreign adversaries within 90 days after the determination of a false certification, the following shall apply:
(a) pursuant to an action under paragraph (2) of this subsection, a civil penalty in an amount that is equal to the greater of $1,000,000 or twice the amount of the bid or application listed in subsection a. of this section for which the false certification was made;
(b) termination of an existing contract, registration, economic development subsidy, tax abatement, payment in lieu of property tax agreement, certification, or designation as deemed appropriate by the issuing agency or the application process for any of the foregoing; and
(c) ineligibility to engage in any of the enumerated activities specified by subsection a. of this section for a period of five years from the date of the determination that the person or entity submitted the false certification, provided that the person or entity has ceased its transactions of data with foreign adversaries.
(2) The department shall report to the Attorney General the name of the person or entity that the State agency determines has submitted a false certification under this section, together with its information as to the false certification, and the Attorney General shall determine whether to bring a civil action against the person or entity to collect the penalty described in this subsection. Only one civil action against the person or entity to collect the penalty described in this subsection may be brought for a false certification on a bid or application listed in subsection a. of this section. A civil action to collect such penalty shall commence within three years from the date the certification is made.
e. The requirements of this section shall not apply to:
(1) the transmission of sensitive data pursuant to a lawful subpoena, court order, or federal or State legal obligation;
(2) data sharing required by legitimate international business transactions, provided such transactions do not compromise national security and are consistent with United States export control laws; and
(3) publicly available data that does not contain personally identifiable information or trade secrets.
f. For purposes of this act, P.L. , c. (C. ) (pending before the Legislature as this bill):
"Data" means information, facts, concepts, or instructions contained in a computer, computer equipment, or computer system. It shall also include, but not be limited to, any alphanumeric, hexadecimal, octal or binary code.
"Economic development subsidy" means the provision of an amount of funds to a recipient with a value of greater than $25,000 for the purpose of stimulating economic development in New Jersey, including, but not limited to, any investment, bond, grant, loan, loan guarantee, matching fund, tax credit, or other tax expenditure.
"Foreign adversary" means any foreign government or foreign nongovernment person determined by the United States Secretary of Commerce to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons.
"Person or entity" means any of the following:
(1) a natural person, corporation, company, limited partnership, limited liability partnership, limited liability company, business association, sole proprietorship, joint venture, partnership, society, trust, or any other nongovernmental entity, organization, or group;
(2) any governmental entity or instrumentality of a government, including a multilateral development institution, as defined in Section 1701(c)(3) of the International Financial Institutions Act, 22 U.S.C. 262r(c)(3); or
(3) any parent, successor, subunit, direct or indirect subsidiary, or any entity under common ownership or control with, any entity described in paragraph (1) or (2).
"State agency" means any of the principal departments in the Executive Branch of the State government, and any division, board, bureau, office, commission or other instrumentality within or created by such department; the Legislature of the State and any office, board, bureau or commission within or created by the Legislative Branch; and any independent State authority, commission, instrumentality or agency that is authorized by law to award public contracts. "State agency" shall also include a public research university that is not a State college subject to the provisions of the "State College Contracts Law," P.L.1986, c.43 (C.18A:64-52 et seq.).
"State contractor" means a business organization that seeks to enter, or has entered into, a contract with a State agency.
2. A State agency shall not bank with, have or hold stock, debt, or other equity investments of, or maintain insurance coverage through a policy issued by a financial institution that is included in the Department of the Treasury's list created pursuant to subsection b. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) for selling, transferring, disclosing, or providing data to a foreign adversary or any entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary.
3. The Department of the Treasury shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt such rules and regulations as may be necessary to implement this act.
4. This act shall take effect immediately.
STATEMENT
This bill prohibits State contractors from selling, transferring, disclosing, or providing data to a foreign adversary.
Pursuant to the bill, a person or entity that sells, transfers, discloses, or provides data to foreign adversaries, or entities directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary, will be placed on a list by the Department of the Treasury and will not be permitted to contract with State agencies, subcontract with State contractors, file or renew a Public Works Contractor Registration, receive an economic development subsidy from the Economic Development Authority, be awarded a municipal property tax abatement, make or enter into a payment in-lieu of property tax agreement, apply for or receive a tax clearance certificate from the Division of Taxation, be certified as an urban renewal entity for purposes of the "Long Term Tax Exemption Law," or be designated as a redeveloper by a public agency for the purposes of the "Local Redevelopment and Housing Law."
The bill also prohibits the State from banking with, having or holding stock, debt, or other equity investments of, or maintaining insurance coverage through a policy issued by a financial institution that has sold, transferred, disclosed, or provided data to a foreign adversary or an entity directly or indirectly controlled by, operating on behalf of, or significantly influenced by a foreign adversary.