Official Summary Text
HB2170 - 572R - Senate Fact Sheet
Assigned to
PS������������������������������������������������������������������������������������������������������������������ AS
PASSED BY COW
ARIZONA STATE SENATE
Fifty-Seventh
Legislature, Second Regular Session
AMENDED
FACT SHEET FOR
h.b. 2170
state contracts; foreign adversary; prohibition
Purpose
Establishes the
Protection Procurement Act
, which prohibits a
company domiciled in and controlled or majority owned by the government,
military or ruling party of the People's Republic of China from contracting
with a state agency for electronic or information technology, requires a
prospective company to certify that the company is not domiciled in China or reselling
electronic or information technology from a Chinese company to a state agency and
outlines penalties for a company that submits a false certification.
Background
Contracts by state government units must be awarded by competitive sealed
bidding. Invitations for bids must be issued and include a purchase description
and all contractual terms and conditions applicable to the procurement.
Adequate notice of the invitation for bids must be given a reasonable amount of
time before the opening date of the bids and may be published in a newspaper of
general circulation or electronically on a designated website. The state
maintains an official electronic procurement system authorized by the State
Procurement Officer (eProcurement System). Procurement files for state
contracts may be located in the eProcurement System, the Office of the Director
of the Arizona Department of Administration (ADOA) or at a public procurement
unit (
A.A.C.
R2-7-101
;
A.R.S.
� 41-2533
).
A public entity may not enter into or renew a contract with a company to
acquire or dispose of services, supplies, information technology, goods or
construction unless the contract includes a written certification that the
company does not currently, and agrees for the duration of the contract that it
will not, use: 1) the forced labor of ethnic Uyghurs in the People's Republic
of China; 2) any goods or services produced by the forced labor of ethnic
Uyghurs in the People's Republic of China; or 3) any contractors,
subcontractors or suppliers that use the forced labor or any goods or services
produced by the forced labor of ethnic Uyghurs in the People's Republic of
China (
A.R.S.
� 35-394
).
Electronic or information technology
is all electronic information
processing hardware and software, including telecommunications and any
electronic information equipment or interconnected system that is used in
acquiring, storing, manipulating, managing, moving, controlling, displaying, switching,
interchanging, transmitting and receiving data or information, including audio,
graphics and text (
A.R.S.
� 18-131
).
If the prohibition on contracting with a company domiciled in the
People's Republic of China decreases the number of companies who are eligible
to compete for state contracts in the procurement process, the potentially
increased costs of state contracts may impact the state General Fund.
Provisions
1.
Prohibits
a company from bidding on, submitting a proposal for or entering into a
contract with a state agency for electronic or information technology if the
company is:
a)
domiciled in the People's Republic of China; and
b)
controlled or majority owned by the government, military or ruling political
party of the People's Republic of China.
2.
Requires
each company that submits a bid or proposal for a state contract for electronic
or information technology to submit a certification letter to ADOA certifying
that the company is not:
a)
a company that is domiciled in the People's Republic of China; or
b)
submitting the bid or proposal for the express purpose of reselling to a
state agency electronic or information technology from a company that is domiciled
in China.
3.
Stipulates
that, if ADOA determines that a company has knowingly submitted a false
certification letter:
a)
the company is liable for a civil penalty of $100,000;
b)
the state agency or ADOA must terminate the contract with the company;
and
c)
the company is barred from bidding on any state contracts for at least
60 months.
4.
Specifies
that a state agency may enter into a contract for electronic or information
technology manufactured by a company domiciled in the People's Republic of
China if:
a)
there are no other reasonable options for the procurement of the
specific technology; and
b)
not procuring the specific technology would pose a greater threat to
Arizona than the threat associated with the manufacture of the electronic or
information technology by a company domiciled in the People's Republic of
China.
5.
Defines
controlled
as:
a)
in reference to investment companies, the power to exercise a
controlling influence over the management or policies of a company, unless such
power is solely the result of an official position with such company; and
b)
in the case of a company that is domiciled in the People's Republic of
China, involvement in an entity's governance structure, monitoring or internal
human resources decisions consistent with the objectives prescribed in the
Opinion
on Strengthening the United Front Work of the Private Economy in the New Era
issued
by the General Office of the Chinese Communist Party Central Committee or a
successor or similar document.
6.
Defines
company, domicile
and
electronic or information technology
.
7.
Designates
this legislation as the
Protection Procurement Act
.
8.
Becomes
effective on the general effective date.
Amendments
Adopted by Committee of the Whole
�
Specifies that the certification letter must certify that the
company is not submitting the bid or proposal for a state contract for the
express purpose of reselling to a state agency electronic or information
technology, rather than for reselling products, from a company domiciled in the
People's Republic of China.
House Action
����������������������������������������������������������
Senate
Action
GOV�������������� 1/28/26����� DP���� 4-3-0-0���������������� PS������������������� 3/25/26����� DP���� 4-3-0
3
rd
Read��������� 3/11/26���������������� 36-16-7-0-1
Prepared by
Senate Research
April 20, 2026
KJA/SDR/hk
Current Bill Text
Read the full stored bill text
HB2170 - 572R - S Ver
Senate Engrossed
House Bill
state contracts;
foreign adversary; prohibition
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2170
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.
1. Title
41, chapter 23, article 3, Arizona Revised Statutes, is amended by adding
section 41-2553, to read:
START_STATUTE
41-2553.
State contracts; electronic or information technology;
certification letter; civil penalty; exceptions; definitions
A. A company
that
is domiciled in the people's republic of
China
and that is controlled by or is
majority owned by the government, military or ruling political party OF THE
PEOPLE'S REPUBLIC OF CHINA
may not bid on, submit a proposal for or enter into a
contract with a state agency for
electronic or
information technology
. Each company that submits a bid or proposal for a
state contract for
ELECTRONIC
OR INFORMATION TECHNOLOGY
shall submit a
certification
letter to the department certifying that the company is not a company
that is domiciled
in the people's republic of China and that the company is not submitting the
bid or proposal for a state contract for the express purpose of reselling to a
state agency electronic or information technology from a company that is
domiciled in the People's Republic of China
.
B. If
the department determines that a company has
KNOWINGLY
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
ELECTRONIC OR INFORMATION TECHNOLOGY manufactured by a company
that is 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
ELECTRONIC OR
INFORMATION TECHNOLOGY.
2. Not procuring the specific
ELECTRONIC OR INFORMATION TECHNOLOGY would pose a greater threat to
this state than the threat associated with the manufacture of the
ELECTRONIC OR INFORMATION TECHNOLOGY by a company
domiciled in the people's republic of China.
D.
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
either of the following:
(
i
) A wholly
owned subsidiary.
(
ii
) A majority
owned subsidiary.
2. "Controlled":
(
a
) has the
same meaning prescribed in the investment company act of 1940 (15 United States
code section 80
a
-2).
(
b
) In the case
of a company that is domiciled in the people's republic of china, means
involvement in an entity's governance structure, monitoring or internal human
resources decisions consistent with the objectives prescribed in the "opinion
on strengthening the united front work of the private economy in the new
era" issued by the general office of the Chinese communist party central
committee or a successor or similar document.
3. "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.
4. "electronic
or information technology" has the same meaning prescribed in section
18-131.
END_STATUTE
Sec.
2.
2.
Short title
This act may be cited as the
"Protection Procurement Act".