SB 648

This bill prohibits any state agency or other body in Wisconsin state government, including the legislature and the courts (state agency), from contracting with certain prohibited business entities. Specifically, the bill prohibits state agencies from contracting with any organization or enterprise whether or not operated for profit that satisfies any of the following:

1. Is primarily domiciled, incorporated, issued, or listed in a foreign country of concern.

2. Is headquartered in a foreign country of concern.

3. Has its principal place of business in a foreign country of concern.

4. Is controlled or is majority-owned by the government of the People’s Republic of China, the Chinese Communist Party, the Chinese military, or an instrumentality of any of the foregoing, including the State-owned Assets Supervision and Administration Commission of the State Council of the People’s Republic of China and the National Council for Social Security Fund of the People’s Republic of China.

5. Is a subsidiary of any of the business entities described above.

6. Sells the final products of a business entity described above to a state agency.

The bill defines “foreign country of concern” as a country designated by the U.S. Department of Commerce as a foreign adversary of the United States. Those countries currently include China, Cuba, Iran, North Korea, Russia, and Venezuela under the regime of Nicolás Maduro.

Additionally, the bill provides that no contract between any person and a state agency shall be valid, binding, and enforceable unless the person provides prior written certification to the state agency that the person is not a prohibited business entity and that the person has made every effort to ensure that the goods or services provided under the contract did not originate with a prohibited business entity. Moreover, if any person contracting with a state agency becomes a prohibited business entity, the person is for that reason considered to be in breach of contract, and the person must provide written notification of the breach to the state agency. The state agency may then terminate the contract and may pursue all appropriate legal remedies for the breach.

The bill charges the Department of Administration with receiving and investigating complaints of alleged violations of the bill’s contracting requirements. If DOA determines that a person has violated the bill’s requirements, all of the following apply:

1. The person is liable for a forfeiture equal to the greater of $250,000, an amount equal to twice the amount of the value of the relevant contract, or an amount equal to the total amount of all pecuniary losses suffered by any state as a result of the violation.

2. The person is ineligible to contract with a state agency for five years following the date of DOA’s determination of a violation.

Finally, the bill authorizes the Attorney General to enforce the bill’s requirements in court.