Prohibits State contractors from distributing data to foreign adversaries.

A214

ASSEMBLY, No. 214

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman DAWN FANTASIA

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblyman Inganamort

SYNOPSIS

���� Prohibits State contractors from distributing data to
foreign adversaries.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

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.