A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 11-1-130 SO AS TO PROHIBIT CERTAIN CONTRACTS WITH CERTAIN FOREIGN-OWNED COMPANIES IN CONNECTION WITH CRITICAL INFRASTRUCTURE.

 

Whereas, the General Assembly finds that the People's Republic of China (PRC), led by the Chinese Communist Party, is an autocratic and totalitarian government and has been recognized by the Federal Bureau of Investigation as a "grave threat to the economic well-being and democratic values of the United States"; and

 

Whereas, the federal government has determined that a number of foreign nations are actively hostile to the United States and pursuant to federal law have designated as foreign adversaries:

       (1) the People's Republic of China;

       (2) the Republic of Cuba;

       (3) the Islamic Republic of Iran;

       (4) the Democratic People's Republic of Korea;

       (5) the Russian Federation; and

       (6) the Venezuelan politician Nicolás Maduro (Maduro Regime); and

 

Whereas, federal law enforcement and homeland security authorities have warned businesses and the public of the dangers of using technology manufactured in the PRC, as such technology can be used to steal trade secrets, disrupt U.S. infrastructure, spy on U.S. citizens and government agencies, and otherwise be used by the Chinese government to undermine the interests and values of the United States and the ability of its citizens to live in a free, democratic society; and

 

Whereas, the National Intelligence Law of the People's Republic of China requires all Chinese businesses to assist in China's intelligence operations; and

 

Whereas, the General Assembly desires to continue South Carolina's long and successful history of inviting international cooperation in economic development while taking precautions against predatory, hostile interests; and

 

Whereas, the General Assembly finds that narrowly focused legislation limiting the ability of individuals and entities under the control of hostile foreign adversary governments to acquire sensitive real property, to protect South Carolina's critical infrastructure from cyberattacks and electronic espionage, and is necessary and proper for the protection of the state's economy and the freedom of its residents. Now, therefore,

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Chapter 1, Title 11 of the S.C. Code is amended by adding:

 

    Section 11-1-130.  (A) As used in this section:

       (1) "Company" means a sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, or limited liability company, including a wholly owned subsidiary, majority-owned subsidiary, parent company, or affiliate of those entities or business associations, that exists to make a profit.

       (2) "Critical infrastructure" means a communication infrastructure system, cybersecurity system, electric grid, hazardous waste treatment system, or water treatment facility.

       (3) "Cybersecurity" means the measures taken to protect a computer, computer network, computer system, or other technology infrastructure against unauthorized use or access.

       (4) "Designated country" means a country designated by the Governor as a threat to critical infrastructure.

       (5) "Access to" means the ability to approach or enter critical infrastructure.

       (6) "Control of" means the ability to manage or manipulate critical infrastructure.

       (7) "Provider" means a company that provides utility services, including a power company or a city.

       (8) "Utility services" means the end product provided to a consumer, including power or water.

    (B) A business or governmental entity may not enter into an agreement relating to critical infrastructure in this State with a company:

       (1) if, under the agreement, the company would be granted direct or remote access to or control of critical infrastructure in this State, excluding access specifically allowed by the business entity for product warranty and support purposes; and

       (2) if the business entity knows that the company is:

           (a) owned, controlled by, or the majority of stock or other ownership interest of the company is held or controlled by:

               (i) individuals who are citizens of China, Iran, North Korea, Russia, or a designated country; or

               (ii) a company or other entity, including a governmental entity, that is owned or controlled by citizens of or is directly or indirectly controlled by the government of China, Iran, North Korea, Russia, or a designated country;

           (b) headquartered in China, Iran, North Korea, Russia, or a designated country; or

           (c) a subsidiary of an entity domiciled in China, Iran, North Korea, or a designated country.

    (C) The prohibition described by subsection (B) applies regardless of whether:

       (1) the company's or its parent company's securities are publicly traded; or

       (2) the company or its parent company is listed on a public stock exchange as:

           (a) a Chinese, Iranian, North Korean, or Russian company; or

           (b) a company of a designated country.

    (D) The prohibition described in subsection (B) does not apply to a consumer's receipt of utility services from a provider.

    (E) The Governor, after consultation with the Director of the Department of Public Safety, may designate a country as a threat to critical infrastructure for purposes of this section.

    (F) The Governor shall consult the Homeland Security Council to assess a threat to critical infrastructure for purposes of making a designation pursuant to this section.

 

SECTION 2.  This act takes effect upon approval by the Governor.

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