HB 2542 Arizona House · 57th Legislature - First Regular Session

state contracts; foreign adversary; prohibition

HB 2542, the "Protection Procurement Act," prohibits companies domiciled in the People's Republic of China from bidding on or entering into state contracts for goods or services in Arizona, unless they submit a certification letter confirming their non-Chinese domicile. Violating this requirement triggers a $100,000 civil penalty, contract termination, and a 60-month ban on future state bids. An exception allows contracts with Chinese companies only if no reasonable alternatives exist and not procuring the goods would pose a greater threat to the state. The bill was passed by the Arizona legislature in June 2025 but vetoed by the governor on June 25, 2025.
Bill status vetoed 4 of 5 stages cleared
Introduction
Jan 2025
Committee Review
Mar 2025
House Passage
Mar 2025
Senate Passage
Jun 2025
Vetoed
Jun 2025
Introduced Jan 27, 2025 Vetoed Jun 25, 2025
Maddy AI version diff · 2 comparisons

What changed between versions

Introduced Version House Engrossed Version · 5 edits · Jun 19, 2025
MODERATE
The bill was amended to specifically target companies domiciled in the People's Republic of China, replacing the broader term 'foreign adversary' to focus the prohibition on Chinese entities. The civil penalty for submitting a false certification letter was reduced from a variable amount up to $250,000 to a flat $100,000. Additionally, the exemption criteria for procuring goods from these companies were tightened, requiring both a lack of reasonable alternatives and a specific threat assessment, while the definition of 'domicile' was expanded to include incorporation, headquarters, and listing status.
Scope change
The bill's scope narrowed from a general prohibition on 'foreign adversary' companies to a specific prohibition on companies domiciled in the People's Republic of China.
ELIGIBILITY

The prohibition on state contracts now explicitly applies only to companies domiciled in the People's Republic of China, removing the broader 'foreign adversary' designation.

ENFORCEMENT

The civil penalty for submitting a false certification letter was changed from a variable amount (up to $250,000 or twice the contract value) to a fixed $100,000 fine.

REQUIREMENT

Exemptions for procuring goods from Chinese companies now require both a lack of reasonable alternatives and a finding that not procuring the goods poses a greater threat to the state than the risk of the goods themselves.

DEFINITION

The definition of 'domicile' was expanded to include where a company is incorporated, headquartered, issued, or listed, in addition to where it is registered.

Definitions for 'federally banned corporation' and the general 'foreign adversary' concepts were removed as they are no longer applicable to the specific focus on Chinese companies.

Floor votes · House Jun 19, 2025

How they voted

This bill passed the Senate by voice vote (no roll call recorded).
Full legislative history

Actions timeline

Total actions
20
Key actions
9
Committee
2
Amendments
3
Jun 25, 2025
Vetoed
Vetoed by Governor
executive
Jun 19, 2025
Upper · Passed
PASSED
upper
Jun 18, 2025
Upper · Passed
DPA
upper
Mar 26, 2025
Upper · Passed
DP
upper
Mar 18, 2025
Lower · Passed
PASSED
lower
Mar 17, 2025
Lower · Passed
DPA
lower
Mar 17, 2025
Lower · Passed
PASSED
lower
Feb 20, 2025
Lower · Passed
PASSED
lower
Feb 19, 2025
Lower · Passed
DPA
lower
Feb 5, 2025
Lower · Passed
DP
lower
1 primary · 0 co-sponsors

Sponsors

Role
Legislator
Party
State
District
P
Photo of Lupe Diaz
Lupe Diaz
RRepublican
AZ
19