state contracts; foreign adversary; prohibition, the official text

PREFILED    JAN 08 2026

REFERENCE TITLE: state contracts; foreign adversary; prohibition

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2170

Introduced by

Representative
Diaz

AN
ACT

amending
title 41, chapter 23, article 3, Arizona Revised Statutes, by adding section 41-2553;
relating to the procurement code.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 41, chapter 23, article 3,
Arizona Revised Statutes, is amended by adding section 41-2553, to read:

START_STATUTE41-2553. State contracts; certification letter; civil penalty;
applicability; definitions

A. A
company domiciled in the people's
republic of China may not bid on, submit a proposal
for or enter into a contract with a state agency for goods or
services. Each company that submits a bid or proposal for a state
contract for goods or services shall submit a certification
letter to the department certifying that the company is not a company domiciled in the people's republic of China.

B. If the department determines that a company has
submitted a certification letter that is false, all of the following must
occur:

1. The
company is liable for a civil penalty of $100,000.

2. The
state agency or the department shall terminate the contract with the company.

3. The
company may not bid on any state contracts for at least sixty months.

C. Notwithstanding subsection a of
this section, a state agency may enter into a contract for goods manufactured
by a company domiciled in the people's republic of China
if both of the following apply:

1. There are no other reasonable
options for the procurement of the specific goods.

2. Not procuring the specific goods
would pose a greater threat to this state than the threat associated with the
manufacture of the goods by a company domiciled in the
people's republic of China.

D. This section does not apply to the
department of public safety.

E. For
the purposes of this section:

1. "Company":

(a) Means any
of the following that exists for the purpose of making a profit:

(i) A sole
proprietorship.

(ii) An
organization.

(iii) A
corporation.

(iv) An
association.

(v) A
partnership.

(vi) A joint
venture.

(vii) A limited
partnership.

(viii) A
limited liability partnership.

(ix) A limited
liability company.

(x) Any other
entity or business association.

(b) Includes
any of the following:

(i) A wholly
owned subsidiary.

(ii) A majority
owned subsidiary.

(iii) A parent
company.

(iv) An
affiliate of any entity or business association.

2. "Domicile" means any of
the following:

(a) The country where a company is registered, incorporated, headquartered, issued or listed.

(b) The country where the company's affairs are primarily
completed.

(c) The country where the majority of ownership share is
held.

Sec. 2. Short title

This act may be cited as the "Protection
Procurement Act".