H.F. _____ Section 1. NEW SECTION . 8A.311C Qualifications to bid or 1 submit proposals. 2 1. For purposes of this section: 3 a. “Company” means any sole proprietorship, organization, 4 association, corporation, partnership, joint venture, limited 5 partnership, limited liability partnership, limited liability 6 company, or other entity or business association, including 7 all wholly owned subsidiaries, majority-owned subsidiaries, 8 parent companies, or affiliates of such entities or business 9 associations, that exists for profit-making purposes. 10 b. “Domicile” means any of the following: 11 (1) The country in which a company is registered. 12 (2) The country in which the company’s affairs are primarily 13 completed. 14 (3) The country in which the majority of a company’s 15 ownership shares are held. 16 c. “Federally banned company” means a company banned from 17 doing business in the United States by the federal government. 18 Such bans include but are not limited to those resulting from 19 actions taken by any of the following federal agencies or 20 pursuant to any of the following federal laws: 21 (1) The federal communications commission, including but 22 not limited to the covered list developed pursuant to 47 C.F.R. 23 §1.50002 and published by the public safety and homeland 24 security bureau of the federal communications commission. 25 (2) The United States department of commerce. 26 (3) The United States cybersecurity and infrastructure 27 security agency. 28 (4) The federal acquisition security council. 29 (5) Section 889 of the John S. McCain National Defense 30 Authorization Act for Fiscal Year 2019, Pub. L. No. 115-232. 31 d. “Foreign adversary” means the People’s Republic of China, 32 the Russian Federation, the Islamic Republic of Iran, the 33 Democratic People’s Republic of Korea, the Republic of Cuba, 34 the Venezuelan regime of Nicolas Maduro, or the Syrian Arab 35 -1- LSB 6256YC (3) 90 sc/ns 1/ 5

H.F. _____ Republic, including an agent of or an entity under significant 1 control of such foreign country of concern, or an entity deemed 2 a foreign adversary by the governor in consultation with the 3 department. 4 e. “Foreign adversary company” means a company owned 5 or controlled, in whole or in part, by the government of a 6 foreign adversary, by individuals acting in official government 7 capacities of a foreign adversary, by a company domiciled in a 8 foreign adversary, or by a company otherwise under control of a 9 foreign adversary. 10 2. Except as provided under subsection 5, all of the 11 following are ineligible to bid on or submit a proposal for a 12 contract with the state or a political subdivision of the state 13 for goods or services, including but not limited to under this 14 chapter, or chapter 8B, 26, 73, or 73A: 15 a. A foreign adversary company. 16 b. A federally banned company. 17 c. A company that offers to provide goods or services 18 manufactured or produced by a foreign adversary company or 19 federally banned company. 20 3. A company that submits a bid or proposal for a contract 21 with the state or a political subdivision of the state 22 for goods or services must certify that the company is not 23 ineligible to bid on the contract under subsection 2. 24 4. If the department determines that a company has submitted 25 a false certification under subsection 3, all of the following 26 apply: 27 a. The department shall assess the company a civil penalty 28 of not less than two hundred fifty thousand dollars, or twice 29 the amount of the contract for which a bid or proposal was 30 submitted, whichever is greater. Civil penalties collected 31 under this paragraph shall be deposited in the general fund of 32 the state. 33 b. The contract is void. 34 c. The company shall be ineligible to bid on a public 35 -2- LSB 6256YC (3) 90 sc/ns 2/ 5

H.F. _____ contract for sixty months. 1 5. Notwithstanding subsection 2, the state or a political 2 subdivision of the state may enter into a contract for goods 3 manufactured by a foreign adversary company or federally banned 4 company if all of the following criteria are met: 5 a. There is no other reasonable option for procuring the 6 goods. 7 b. The contract is preapproved by the department. 8 c. Failure to procure the goods would pose a greater threat 9 to this state than the threat associated with procuring the 10 goods from a foreign adversary company or federally banned 11 company. 12 6. Each bid or offer submitted for a public contract must 13 include a disclosure of whether the bidder, offeror, or its 14 corporate parents or subsidiaries, within the twenty-four-month 15 period before submission of the bid or offer, had business 16 operations that involved contracts with or the provision of 17 supplies or services from or to a foreign adversary. 18 7. A bidder or offeror that does not include the disclosure 19 required by subsection 6 may be given a reasonable period after 20 the bid or offer is submitted to cure the nondisclosure. The 21 state or political subdivision may consider the disclosure when 22 evaluating the bid or offer or awarding the contract. 23 8. Each state entity or political subdivision that receives 24 a disclosure under subsection 6 shall provide the disclosure 25 to the department. 26 9. A company which wishes to submit a bid or offer for a 27 public contract with the state or political subdivision of the 28 state must certify that the bidder, offeror, or any of its 29 corporate parents or subsidiaries, has not within the sixty 30 months before submission of the bid or offer had business 31 operations that involved contracts with or the provision of 32 goods or services to a military entity of a foreign adversary, 33 a foreign adversary company, a political party of a foreign 34 adversary, or a federally banned company. 35 -3- LSB 6256YC (3) 90 sc/ns 3/ 5

H.F. _____ 10. Each state entity or political subdivision shall 1 provide the department with the name of each entity disclosed 2 under subsection 9 as doing business or having done business 3 with a military entity of a foreign adversary, a foreign 4 adversary company, a political party of a foreign adversary, 5 or a federally banned company. 6 11. If the department determines that a company has 7 submitted a false certification under subsection 9, all of the 8 following apply: 9 a. The department shall assess the company a civil penalty 10 of not less than two hundred fifty thousand dollars, or twice 11 the amount of the contract for which a bid or proposal was 12 submitted, whichever is greater. Civil penalties collected 13 under this paragraph shall be deposited in the general fund of 14 the state. 15 b. The contract is void. 16 c. The company shall be ineligible to bid on a public 17 contract for sixty months. 18 Sec. 2. Section 26.16, Code 2024, is amended to read as 19 follows: 20 26.16 Prequalification requirements prohibited. 21 A Except to the extent provided in section 8A.311C, a 22 governmental entity shall not by ordinance, rule, or any 23 other action relating to contracts for public improvements 24 for which competitive bids are required by this chapter 25 impose any requirement that directly or indirectly restricts 26 potential bidders to any predetermined class of bidders defined 27 by experience on similar projects, size of company, union 28 membership, or any other criteria. However, a governmental 29 entity shall require nonresident bidders to comply with section 30 8A.311B, subsection 4 . 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill prohibits a foreign adversary company, a federally 35 -4- LSB 6256YC (3) 90 sc/ns 4/ 5

H.F. _____ banned company, or a company that offers to provide goods 1 or services manufactured or produced by such an entity from 2 bidding on or submitting a proposal for a contract to supply 3 goods or services to the state or a political subdivision of 4 the state. 5 The bill requires a company to certify that it is not 6 ineligible for a public contract under the bill. If the 7 certification is false, the department of administrative 8 services (DAS) must assess the company a civil penalty of 9 at least $250,000, the contract is void, and the company is 10 ineligible to bid on a public contract for 60 months. 11 The bill permits a contract with a foreign adversary company 12 or federally banned company if there is no other reasonable 13 way to obtain the goods, the contract is preapproved by DAS, 14 and failure to obtain the goods poses a greater threat than 15 obtaining the goods from the prohibited entity. 16 When making a bid or offer on a public contract, a company 17 must disclose whether the bidder, offeror, or its corporate 18 parents or subsidiaries had contracts with, or provided or 19 received supplies or services to or from, a foreign adversary. 20 A company must also certify that the bidder, offeror, or its 21 corporate parents or subsidiaries has not had contracts with or 22 provided goods or services to a military entity or political 23 party of a foreign adversary, a foreign adversary company, or a 24 federally banned company 60 months before submission of the bid 25 or offer. The public entity must submit this information to 26 DAS. If the certification is false, the penalties previously 27 set forth apply. 28 -5- LSB 6256YC (3) 90 sc/ns 5/ 5