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Tennessee General Assembly· SB 377Sponsor(s) Added.

Purchasing and Procurement - As enacted, enacts the "Tennessee Procurement Protection Act." - Amends TCA Title 4, Chapter 56. Companion bill has been assigned Public Chapter Number 768 by the Secretary of State, the official text

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~tate of \lrennessee

PUBLIC CHAPTER NO. 768

                       HOUSE BILL NO. 548
By Representatives Cochran, Zachary, Todd, Reeves

             Substituted for: Senate Bill No. 377

                                              By Senators Rose, Roberts

          AN ACT to amend Tennessee Code Annotated, Title 4, Chapter 56, relative to the
"Tennessee Procurement Protection Act."

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Title 4, Chapter 56, is amended by adding the
following as a new part:

          4-56-201.

                    (a) This part is known and may be cited as the "Tennessee Procurement
          Protection Act."

                    (b) The purpose of this act is to ensure that suppliers to the state and to political
          subdivisions of this state are safe, reliable, and free from undue influence and control
          from foreign adversaries.

          4-56-202.

                    (a) As used in this part:

                              (1) "Chief procurement officer" means the chief procurement officer within
                    the department of general services;

                              (2) "Company" means a sole proprietorship, organization, association,
                    corporation, partnership, joint venture, limited partnership, limited liability
                    partnership, limited liability company, or other entity, including all wholly owned
                    subsidiaries, or majority-owned subsidiaries of such entities, that exist for the
                    purpose of making profit;

                              (3) "Domicile" means the country in which a company is registered, where
                    the company's affairs are primarily completed, or where the majority of ownership
                    shares are held;

                              (4) "Final product or service" means a technology service or software that
                    may contain information and communication technology;

                              (5) "Foreign adversary" means a country designated by the United States
                    department of commerce under 15 CFR 791.4 on January 1, 2025, and as
                    amended thereafter;

                              (6) "Foreign adversary company":

                                        (A) Means a company that:

                                                  (i) Is domiciled, incorporated, issued, or listed in a foreign
                                        adversary;

                                                  (ii) Is headquartered in a foreign adversary;

                                                  (iii) Has its principal place of business in a foreign
                                        adversary;
HB548

                                                  (iv) Is controlled by the government or an instrumentality
                                       thereof of a foreign adversary; or

                                                  (v) Is majority-owned by an entity or is board-controlled by
                                        an entity that is under the jurisdictional control of the government
                                        of a foreign adversary; and

                                        (B) Does not mean a parent company solely because one (1) or
                              more subsidiaries or affiliates meet the definition of a foreign adversary
                              company, if the parent company does not meet the criteria in subdivision
                              (a)(6)(A) and does not recognize more than fifty percent (50%) of the total
                              annual global revenue of the parent company and subsidiaries from
                              China and Hong Kong combined; and

                              (7) "Information and communication technology":

                                        (A) Means the following electronic, digital, or telecommunications
                              equipment, systems, software, or services used to create, convert, store,
                              process, transmit, receive, display, distribute, or otherwise make
                              information available:

                                                  (i) Computers, laptops, tablets, mobile devices, and
                                        peripheral equipment;

                                                  (ii) Software applications, operating systems, databases,
                                        and cloud-based services;

                                                  (iii) Internet and intranet websites, web applications, and
                                        digital content;

                                                  (iv) Telecommunications equipment and services, including
                                        voice, video, messaging, and data communications systems;

                                                  (v) Electronic documents, multimedia, and audiovisual
                                        materials; and

                                                  (vi) Any related hardware, firmware, or embedded
                                        technology integral to the operation of the foregoing; and

                                        (B) Does not include standalone mechanical systems or
                              equipment that do not electronically process or transmit information.

          4-56-203.

                    Except as provided in § 4-56-204, it is the policy of this state to:

                              (1) Prohibit the public procurement of final products or services from a
                    foreign adversary company, whether those final products or services are sold
                    directly by the foreign adversary company or through a third-party vendor; and

                              (2) Authorize the public procurement of final products or services from a
                    company that has operations, affiliates, and subsidiaries in a foreign adversary
                    so long as the company is not a foreign adversary company.

          4-56-204.

                    (a) Except as provided in subsection (e), a foreign adversary company is
          prohibited from bidding on or submitting a proposal for a contract with a state agency or
          political subdivision of this state for information and communications technology.

                    (b) For the purpose of complying with subsection (a), a company shall not, as a
          third-party vendor, knowingly sell final products or services to a state agency or a
          political subdivision of this state that include information and communication
          technologies if such final product or service is manufactured or produced by a foreign
          adversary company. The restriction does not apply to information and communications

                                                               2
HB548

         technologies which have inputs from a foreign adversary company but that are not final
          products or services of a foreign adversary company.

                    (c) A state agency or political subdivision of this state shall require a company
         that submits a bid or proposal for a contract for information and communication
         technology to certify that the company is not a foreign adversary company as described
          in subsection (a) and is not knowingly selling final products or services of a foreign
          adversary company to a state agency or political subdivision as described in subsection
          (b).

                    (d) If the commissioner determines that a company has submitted a false
          certification under subsection (c):

                              (1) The company is liable for a civil penalty in an amount that is equal to
                    the greater of two hundred fifty thousand dollars ($250,000) or twice the amount
                    of the contract for which a bid or proposal was submitted;

                              (2) The state agency or chief procurement officer shall terminate the
                    contract with the company; and

                              (3) The company is prohibited from bidding on a state contract for sixty
                    (60) months.
                    (e) Notwithstanding the prohibitions in subsections (a) and (b), a state agency
          may enter into a contract for a final product or service or information and
          communications technology produced by a foreign adversary company if:

                              (1) There is no other reasonable option for procuring the final product or
                    service or information and communications technology; and

                              (2) The contract is preapproved by the chief procurement officer, state
                    agency, or political subdivision after a determination that not procuring the final
                    product or service or information and communications technology would pose a
                    greater threat to the state than the threat associated with the information and
                    communications technology itself.
          SECTION 2. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
          SECTION 3. This act takes effect July 1, 2026, the public welfare requiring it.

                                                                3
         HOUSE BILL NO. 548

PASSED:  April 7, 2026

                                                              N,SPEAKER
                                   HOUSE OF~PRESENTATIVES

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                                             SPEAKER OF THE SENATE

Apr; APPROVED this J. J51" day of         I  2026

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BILL LEE, GOVERNOR
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