Florida Senate - 2025                             CS for SB 1678
       
       
        
       By the Committee on Governmental Oversight and Accountability;
       and Senators Leek, Martin, and Ingoglia
       
       
       
       
       585-02567-25                                          20251678c1
    1                        A bill to be entitled                      
    2         An act relating to entities that boycott Israel;
    3         amending s. 215.4725, F.S.; defining terms; revising
    4         definitions; requiring the public fund to make its
    5         best efforts to identify certain institutions,
    6         organizations, agencies, governments, and other
    7         entities in which the public fund has direct or
    8         indirect holdings; requiring the public fund to
    9         compile and make available the Scrutinized Companies
   10         or Other Entities that Boycott Israel List; requiring
   11         the public fund to quarterly update and make publicly
   12         available such list; revising the procedures the
   13         public fund must follow for assembling companies or
   14         other entities on such list; requiring the public fund
   15         to file a certain report with each member of the Board
   16         of Trustees of the State Board of Administration and
   17         with the Legislature which includes such list;
   18         requiring the public fund to file a certain report
   19         with a summary of correspondence between other
   20         entities and the public fund; requiring that specified
   21         actions be adopted and incorporated into a certain
   22         statement; amending s. 265.286, F.S.; requiring
   23         applicants to sign a certification form attesting that
   24         they comply with specified antidiscrimination laws and
   25         will not engage in antisemitic discrimination or
   26         antisemitic speech in conjunction with the program or
   27         project for which their grant is awarded;
   28         disqualifying for a specified timeframe grant
   29         applicants that engage in boycotts, antisemitic
   30         discrimination, or antisemitic speech; requiring
   31         recipients found to have engaged in boycotts or
   32         antisemitic discrimination in violation of their
   33         certification to pay a specified penalty; authorizing
   34         individuals to file a written complaint to the
   35         Attorney General for not pursuing a cause of action
   36         within a specified timeframe; requiring the Attorney
   37         General to provide a written response within a
   38         specified timeframe; amending s. 287.135, F.S.;
   39         revising the definition of the term “awarding body”;
   40         revising the contract values that prohibit a company
   41         or other entity from being eligible to bid on, submit
   42         a proposal for, or enter into or renew a contract with
   43         an agency or local governmental entity; requiring
   44         agencies and local governmental entities that enter
   45         into or renew a contract to include a specific
   46         termination provision; authorizing agencies and local
   47         governmental entities to bid on, submit a proposal
   48         for, or enter into or renew a contract for goods and
   49         services with other entities that boycott Israel under
   50         specified circumstances; requiring other entities to
   51         submit a certain certification at the same time as
   52         they submit a bid or proposal or enter into or renew a
   53         contract with an agency or local governmental entity;
   54         authorizing civil actions against companies and other
   55         entities under specified conditions; providing an
   56         effective date.
   57          
   58  Be It Enacted by the Legislature of the State of Florida:
   59  
   60         Section 1. Section 215.4725, Florida Statutes, is amended
   61  to read:
   62         215.4725 Prohibited investments by the State Board of
   63  Administration; companies that boycott Israel.—
   64         (1) DEFINITIONS.—As used in this section, the term:
   65         (a) “Agency” means any of the various state officers,
   66  departments, boards, commissions, divisions, bureaus, and
   67  councils and any other unit of organization, however designated,
   68  of the executive branch of state government.
   69         (b) “Boycott Israel” or “boycott of Israel” means refusing
   70  to deal, terminating business activities, or taking other
   71  actions to limit commercial relations with Israel, or persons or
   72  entities doing business in Israel or in Israeli-controlled
   73  territories, in a discriminatory manner. A statement by a
   74  company, an educational institution, a nonprofit organization,
   75  an agency, a local governmental entity or unit thereof, or a
   76  foreign government that it is participating in a boycott of
   77  Israel, or that it has initiated a boycott in response to a
   78  request for a boycott of Israel or in compliance with, or in
   79  furtherance of, calls for a boycott of Israel, may be considered
   80  by the State Board of Administration to be evidence that a
   81  company or other entity is participating in a boycott of Israel.
   82  The term includes taking adverse action, including changes to
   83  published commercial financial ratings, risk ratings, and
   84  controversy ratings based on nonpecuniary factors, to inflict
   85  economic harm on Israel or persons or entities doing business in
   86  Israel or in Israeli-controlled territories. The term includes
   87  trade practices that are prohibited by federal regulations
   88  issued in compliance with 50 U.S.C. s. 4842 and does not include
   89  trade practices that are preempted by federal law. The term also
   90  includes an academic boycott of Israel in which an educational
   91  institution enacts or implements restrictive policies, or
   92  otherwise participates in activities having the object or effect
   93  of restricting ongoing or potential academic relationships, on
   94  the basis of ties to the State of Israel or its academic,
   95  educational, or research institutions, or by holding
   96  researchers, students, prospective students, guest lecturers,
   97  and artists-in-residence or institutions collectively liable for
   98  any alleged objectionable conduct by the State of Israel. An
   99  educational institution is deemed to have engaged in an academic
  100  boycott of Israel if any of its departments, centers, or other
  101  organs engages in a boycott, or, in the case of a foreign
  102  educational institution, if any faculty union recognized by that
  103  institution engages in a boycott.
  104         (c)(b) “Company” means a sole proprietorship, organization,
  105  association, corporation, partnership, joint venture, limited
  106  partnership, limited liability partnership, limited liability
  107  company, or other entity or business association, including all
  108  wholly owned subsidiaries, majority-owned subsidiaries, and
  109  parent companies, or affiliates, having more than 10 full-time
  110  employees. The term does not include a natural person or a sole
  111  proprietorship that exists for the purpose of making profit.
  112         (d)(c) “Direct holdings” in a company means all securities
  113  of that company that are held directly by the public fund or in
  114  an account or fund in which the public fund owns all shares or
  115  interests.
  116         (e)(d) “Indirect holdings” in a company means all
  117  securities of that company that are held in a commingled fund or
  118  other collective investment, such as a mutual or index fund, in
  119  which the public fund owns shares or interests, together with
  120  other investors not subject to this section or which are held in
  121  an index fund.
  122         (f)“Local governmental entity” means a county,
  123  municipality, special district, or other political subdivision.
  124         (g)“Other entity” means an educational institution, a
  125  nonprofit organization, an agency, a local governmental entity
  126  or unit thereof, or a foreign government, including any of its
  127  public investment funds, public pension funds, sovereign wealth
  128  funds, or other government-sponsored investment funds.
  129         (h)(e) “Public fund” means all funds, assets, trustees
  130  trustee, and other designates under the State Board of
  131  Administration pursuant to part I of chapter 121.
  132         (i)(f) “Scrutinized companies or other entities” means
  133  companies or other entities that boycott Israel or engage in a
  134  boycott of Israel.
  135         (2) IDENTIFICATION OF COMPANIES OR OTHER ENTITIES.—
  136         (a) The public fund shall make its best efforts to identify
  137  all scrutinized companies or other entities in which the public
  138  fund has direct or indirect holdings or could possibly have such
  139  holdings in the future. Such efforts include:
  140         1. To the extent that the public fund finds it appropriate,
  141  reviewing and relying on publicly available information
  142  regarding companies or other entities that boycott Israel,
  143  including information provided by nonprofit organizations,
  144  research firms, international organizations, and government
  145  entities;
  146         2. Contacting asset managers contracted by the public fund
  147  for information regarding companies or other entities that
  148  boycott Israel; or
  149         3. Contacting other institutional investors that prohibit
  150  such investments or that have engaged with companies or other
  151  entities that boycott Israel.
  152         (b) By the first meeting of the public fund following the
  153  identification of scrutinized companies in accordance with
  154  paragraph (a), the public fund shall compile and make available
  155  the “Scrutinized Companies or Other Entities that Boycott Israel
  156  List.”
  157         (c) The public fund shall update and make publicly
  158  available quarterly the Scrutinized Companies or Other Entities
  159  that Boycott Israel List based on evolving information from,
  160  among other sources, those listed in paragraph (a).
  161         (3) REQUIRED ACTIONS.—The public fund shall adhere to the
  162  following procedures for assembling companies or other entities
  163  on the Scrutinized Companies or Other Entities that Boycott
  164  Israel List.
  165         (a) Engagement.—
  166         1. The public fund shall immediately determine the
  167  companies or other entities on the Scrutinized Companies or
  168  Other Entities that Boycott Israel List in which the public fund
  169  owns direct or indirect holdings or with which the state
  170  currently contracts or has a grant agreement, as detailed under
  171  ss. 287.135 and 265.286, respectively.
  172         2. For each company or other entity newly identified under
  173  this paragraph, the public fund shall send a written notice
  174  informing the company or other entity of its scrutinized company
  175  status and that it may become subject to investment prohibition
  176  or divestment by the public fund or may become barred from
  177  future contracts or grants awarded by the state. The notice must
  178  inform the company or other entity of the opportunity to clarify
  179  its activities regarding the boycott of Israel and encourage the
  180  company or other entity to cease the boycott of Israel within 90
  181  days in order to avoid qualifying for investment prohibition or
  182  divestment.
  183         3. If, within 90 days after the public fund’s first
  184  engagement with a company or other entity pursuant to this
  185  paragraph, the company or other entity ceases a boycott of
  186  Israel, the company or other entity shall be removed from the
  187  Scrutinized Companies or Other Entities that Boycott Israel
  188  List, and the provisions of this section ceases shall cease to
  189  apply to that company or other entity unless that company or
  190  other entity resumes a boycott of Israel.
  191         (b) Divestment.—
  192         1. If, after 90 days following the public fund’s first
  193  engagement with a company or other entity pursuant to paragraph
  194  (a), the company or other entity continues to boycott Israel,
  195  the public fund must sell, redeem, divest, or withdraw all
  196  publicly traded securities of the company or other entity from
  197  the public fund within 12 months after the company’s or other
  198  entity’s most recent appearance on the Scrutinized Companies or
  199  Other Entities that Boycott Israel List.
  200         2. If a company or other entity that ceased a boycott of
  201  Israel following engagement pursuant to paragraph (a) resumes
  202  such activities, this paragraph immediately applies, and the
  203  public fund must send a written notice to the company or other
  204  entity. The company or other entity must also be immediately
  205  reintroduced onto the Scrutinized Companies or Other Entities
  206  that Boycott Israel List, as applicable.
  207         (c) Prohibition.—The public fund is prohibited from
  208  acquiring securities of companies or other entities on the
  209  Scrutinized Companies or Other Entities that Boycott Israel
  210  List, except as provided in paragraph (d) and subsection (6).
  211  The public fund and the endowments and retirement funds of the
  212  State University System may not acquire or hold the debt of a
  213  foreign government that is on the Scrutinized Companies or Other
  214  Entities that Boycott Israel List, or of a foreign government
  215  with a sovereign wealth fund that is on the Scrutinized
  216  Companies or Other Entities that Boycott Israel List where the
  217  foreign government has authority to actively control or manage
  218  the fund.
  219         (d) Excluded securities.—Notwithstanding this section,
  220  paragraphs (b) and (c) do not apply to:
  221         1. Indirect holdings. However, the public fund shall submit
  222  letters to the managers of such investment funds containing
  223  companies that boycott Israel requesting that they consider
  224  removing such companies from the fund or create a similar fund
  225  having indirect holdings devoid of such companies. If the
  226  manager creates a similar fund, the public fund shall replace
  227  all applicable investments with investments in the similar fund
  228  in an expedited timeframe consistent with prudent investing
  229  standards. For the purposes of this section, an alternative
  230  investment, as the term is defined in s. 215.4401, and
  231  securities that are not publicly traded are deemed to be
  232  indirect holdings.
  233         2. Exchange-traded funds.
  234         (4) REPORTING.—
  235         (a) The public fund shall file a report with each member of
  236  the Board of Trustees of the State Board of Administration, the
  237  President of the Senate, and the Speaker of the House of
  238  Representatives which includes the Scrutinized Companies or
  239  Other Entities that Boycott Israel List within 30 days after the
  240  list is created. This report shall be made available to the
  241  public.
  242         (b) At each quarterly meeting of the Board of Trustees
  243  thereafter, the public fund shall file a report, which shall be
  244  made available to the public and to each member of the Board of
  245  Trustees of the State Board of Administration, the President of
  246  the Senate, and the Speaker of the House of Representatives,
  247  which includes:
  248         1. A summary of correspondence with companies or other
  249  entities engaged by the public fund under subsection (3);
  250         2. All investments sold, redeemed, divested, or withdrawn
  251  in compliance with paragraph (3)(b);
  252         3. All prohibited investments under paragraph (3)(c);
  253         4. Any progress made under paragraph (3)(d); and
  254         5. A list of all publicly traded securities held directly
  255  by the public fund.
  256         (5) INVESTMENT POLICY STATEMENT OBLIGATIONS.—The public
  257  fund’s actions taken in compliance with this section, including
  258  all good faith determinations regarding companies or other
  259  entities as required by this act, shall be adopted and
  260  incorporated into the public fund’s investment policy statement
  261  as provided in s. 215.475.
  262         (6) INVESTMENT AND REINVESTMENT IN CERTAIN SCRUTINIZED
  263  COMPANIES OR OTHER ENTITIES.—Notwithstanding any other provision
  264  of this section, the public fund may invest in, cease divestment
  265  from, or reinvest in certain scrutinized companies or other
  266  entities if clear and convincing evidence shows that the value
  267  of all assets under management by the public fund becomes equal
  268  to or less than 99.50 percent, or 50 basis points, of the
  269  hypothetical value of all assets under management by the public
  270  fund, assuming no investment prohibition or divestment for any
  271  company or other entity had occurred under subsection (3).
  272  Cessation of the investment prohibition or the divestment, or
  273  reinvestment or any new investment, in a scrutinized company or
  274  other entity is limited to the minimum steps necessary to avoid
  275  the contingency described in this subsection. For any cessation
  276  of the investment prohibition or divestment, or reinvestment or
  277  new investment authorized by this subsection, the public fund
  278  shall provide a written report to each member of the Board of
  279  Trustees of the State Board of Administration, the President of
  280  the Senate, and the Speaker of the House of Representatives in
  281  advance of the cessation of investment prohibition or the
  282  divestment, or reinvestment or new investment, updated
  283  semiannually thereafter as applicable, setting forth the reasons
  284  and justification, supported by clear and convincing evidence,
  285  for its decisions to cease the investment prohibition or
  286  divestment, or to reinvest in scrutinized companies or other
  287  entities.
  288         (7)STATE UNIVERSITY SYSTEM COMPLIANCE.—The endowment and
  289  retirement funds of the universities of the State University
  290  System are required to comply with the divestment requirement
  291  and prohibition of acquiring securities of companies or other
  292  entities on the Scrutinized Companies or Other Entities that
  293  Boycott Israel List. The endowment and retirement funds of the
  294  universities of the State University System are provided the
  295  same exemption as provided in paragraph (3)(d).
  296         Section 2. Paragraph (c) of subsection (6) of section
  297  265.286, Florida Statutes, is amended, and paragraphs (d) and
  298  (e) are added to that subsection, to read:
  299         265.286 Art and cultural grants.—
  300         (6) The division shall adopt rules establishing:
  301         (c) The panel review process, including, but not limited
  302  to, criteria for reviewing grant applications to ensure
  303  compliance with applicable federal and state law, including
  304  those related to discrimination and conflicts of interest. For
  305  the purposes of satisfying the nondiscrimination requirements of
  306  this section, each applicant must sign a certification form
  307  attesting to the fact that they are complying with all relevant
  308  antidiscrimination laws, including the anti-boycott rules of
  309  this state pursuant to ss. 215.4725 and 287.135, and will not
  310  engage in antisemitic discrimination as defined by s. 1.015,
  311  including refusals to deal based on an individual’s or entity’s
  312  real or perceived connection to the State of Israel, or engage
  313  in antisemitic speech as defined in s. 1.015, in conjunction
  314  with the program or project for which their grant is awarded.
  315  The division may not award any new grant that will, in whole or
  316  in part, inure to the personal benefit of any council or review
  317  panel member during the member’s term of office if the council
  318  or panel member participated in the vote of the council or panel
  319  recommending the award. This paragraph does not prohibit the
  320  division from awarding a grant to an entity with which a council
  321  or panel member is associated.
  322         (d)A grant applicant found to be engaging in any boycott
  323  action, antisemitic discrimination, or antisemitic speech in
  324  conjunction with the program or project for which the grant is
  325  awarded shall be disqualified from grant eligibility until 10
  326  years after any such action has ceased. A grant recipient found
  327  to have engaged in a boycott of Israel or antisemitic
  328  discrimination during the duration of the project or program for
  329  which its grant was awarded shall be subject to a penalty
  330  payable to the State Treasury of three times the amount of the
  331  grant received for which the false certification was submitted.
  332         (e)If the Attorney General fails to pursue a cause of
  333  action within 90 days after a violation of paragraph (c),
  334  individuals have the right to file a written complaint to the
  335  Attorney General, who in turn will be required to provide a
  336  written response within 30 days after receipt of the complaint.
  337         Section 3. Section 287.135, Florida Statutes, is amended to
  338  read:
  339         287.135 Prohibition against contracting with scrutinized
  340  companies or entities.—
  341         (1) In addition to the terms defined in ss. 287.012 and
  342  215.473, as used in this section, the term:
  343         (a) “Awarding body” means, for purposes of state contracts,
  344  an agency or the department, and for purposes of local
  345  contracts, the governing body of the local governmental entity.
  346         (b) “Boycott of Israel” has the same meaning as defined in
  347  s. 215.4725.
  348         (c) “Business operations” means, for purposes specifically
  349  related to Cuba or Syria, engaging in commerce in any form in
  350  Cuba or Syria, including, but not limited to, acquiring,
  351  developing, maintaining, owning, selling, possessing, leasing,
  352  or operating equipment, facilities, personnel, products,
  353  services, personal property, real property, military equipment,
  354  or any other apparatus of business or commerce.
  355         (d) “Local governmental entity” means a county,
  356  municipality, special district, or other political subdivision
  357  of the state.
  358         (2) A company or other entity is ineligible to, and may
  359  not, bid on, submit a proposal for, or enter into or renew a
  360  contract with an agency or local governmental entity for goods
  361  or services of:
  362         (a) One hundred thousand dollars or more Any amount if, at
  363  the time of bidding on, submitting a proposal for, or entering
  364  into or renewing such contract, the company or other entity is
  365  on the Scrutinized Companies or Other Entities that Boycott
  366  Israel List, created pursuant to s. 215.4725, or is engaged in a
  367  boycott of Israel; or
  368         (b) One million dollars or more if, at the time of bidding
  369  on, submitting a proposal for, or entering into or renewing such
  370  contract, the company or other entity:
  371         1. Is on the Scrutinized Companies with Activities in Sudan
  372  List or the Scrutinized Companies with Activities in Iran
  373  Terrorism Sectors List, created pursuant to s. 215.473; or
  374         2. Is engaged in business operations in Cuba or Syria.
  375         (3)(a) Any contract with an agency or local governmental
  376  entity for goods or services of $1 million or more entered into
  377  or renewed on or after:
  378         1. July 1, 2011, through June 30, 2012, must contain a
  379  provision that allows for the termination of such contract at
  380  the option of the awarding body if the company is found to have
  381  submitted a false certification as provided under subsection (5)
  382  or been placed on the Scrutinized Companies with Activities in
  383  Sudan List or the Scrutinized Companies with Activities in the
  384  Iran Petroleum Energy Sector List.
  385         2. July 1, 2012, through September 30, 2016, must contain a
  386  provision that allows for the termination of such contract at
  387  the option of the awarding body if the company is found to have
  388  submitted a false certification as provided under subsection
  389  (5), been placed on the Scrutinized Companies with Activities in
  390  Sudan List or the Scrutinized Companies with Activities in the
  391  Iran Petroleum Energy Sector List, or been engaged in business
  392  operations in Cuba or Syria.
  393         3. October 1, 2016, through June 30, 2018, must contain a
  394  provision that allows for the termination of such contract at
  395  the option of the awarding body if the company:
  396         a. Is found to have submitted a false certification as
  397  provided under subsection (5);
  398         b. Has been placed on the Scrutinized Companies that
  399  Boycott Israel List, or is engaged in a boycott of Israel;
  400         c. Has been placed on the Scrutinized Companies with
  401  Activities in Sudan List or the Scrutinized Companies with
  402  Activities in the Iran Petroleum Energy Sector List; or
  403         d. Has been engaged in business operations in Cuba or
  404  Syria.
  405         4. July 1, 2018, must contain a provision that allows for
  406  the termination of such contract at the option of the awarding
  407  body if the company is found to have submitted a false
  408  certification as provided under subsection (5), been placed on
  409  the Scrutinized Companies with Activities in Sudan List, or been
  410  engaged in business operations in Cuba or Syria.
  411         5. July 1, 2018, must contain a provision that allows for
  412  the termination of such contract at the option of the awarding
  413  body if the company is found to have submitted a false
  414  certification as provided under subsection (5) or has been
  415  placed on a list created pursuant to s. 215.473, relating to
  416  scrutinized active business operations in Iran.
  417         (b) Any contract with an agency or local governmental
  418  entity for goods or services of any amount entered into or
  419  renewed on or after:
  420         1. July 1, 2018, must contain a provision that allows for
  421  the termination of such contract at the option of the awarding
  422  body if the company is found to have been placed on the
  423  Scrutinized Companies that Boycott Israel List or is engaged in
  424  a boycott of Israel.
  425         2. July 1, 2025, must contain a provision that allows for
  426  the termination of such contract at the option of the awarding
  427  body if the company or other entity is found to have been placed
  428  on the Scrutinized Companies or Other Entities that Boycott
  429  Israel List or is engaged in a boycott of Israel.
  430         (4) Notwithstanding subsection (2) or subsection (3), an
  431  agency or local governmental entity, on a case-by-case basis,
  432  may allow a company on the Scrutinized Companies with Activities
  433  in Sudan List, the Scrutinized Companies with Activities in the
  434  Iran Petroleum Energy Sector List, or the Scrutinized Companies
  435  with Activities in Iran Terrorism Sectors List, or a company
  436  engaged in business operations in Cuba or Syria, to be eligible
  437  for, bid on, submit a proposal for, or enter into or renew a
  438  contract for goods or services of $1 million or more, or may
  439  allow a company or other entity on the Scrutinized Companies or
  440  Other Entities that Boycott Israel List to be eligible for, bid
  441  on, submit a proposal for, or enter into or renew a contract for
  442  goods or services of any amount, under the conditions set forth
  443  in paragraph (a) or the conditions set forth in paragraph (b):
  444         (a)1. With respect to a company on the Scrutinized
  445  Companies with Activities in Sudan List, all of the following
  446  occur:
  447         a. The scrutinized business operations were made before
  448  July 1, 2011.
  449         b. The scrutinized business operations have not been
  450  expanded or renewed after July 1, 2011.
  451         c. The agency or local governmental entity determines that
  452  it is in the best interest of the state or local community to
  453  contract with the company.
  454         d. The company has adopted, has publicized, and is
  455  implementing a formal plan to cease scrutinized business
  456  operations and to refrain from engaging in any new scrutinized
  457  business operations.
  458         2. With respect to a company engaged in business operations
  459  in Cuba or Syria, all of the following occur:
  460         a. The business operations were made before July 1, 2012.
  461         b. The business operations have not been expanded or
  462  renewed after July 1, 2012.
  463         c. The agency or local governmental entity determines that
  464  it is in the best interest of the state or local community to
  465  contract with the company.
  466         d. The company has adopted, has publicized, and is
  467  implementing a formal plan to cease business operations and to
  468  refrain from engaging in any new business operations.
  469         3. With respect to a company or other entity on the
  470  Scrutinized Companies or Other Entities that Boycott Israel
  471  List, all of the following occur:
  472         a. The boycott of Israel was initiated before October 1,
  473  2016.
  474         b. The company or other entity certifies in writing that it
  475  has ceased its boycott of Israel.
  476         c. The agency or local governmental entity determines that
  477  it is in the best interest of the state or local community to
  478  contract with the company or other entity.
  479         d. The company or other entity has adopted, has publicized,
  480  and is implementing a formal plan to cease scrutinized business
  481  operations and to refrain from engaging in any new scrutinized
  482  business operations.
  483         4. With respect to a company on the Scrutinized Companies
  484  with Activities in the Iran Petroleum Energy Sector List as of
  485  November 6, 2023, all of the following occur:
  486         a. The scrutinized business operations were made before
  487  July 1, 2011.
  488         b. The scrutinized business operations have not been
  489  expanded or renewed after July 1, 2011.
  490         c. The agency or local governmental entity determines that
  491  it is in the best interest of the state or local community to
  492  contract with the company.
  493         d. The company has adopted, has publicized, and is
  494  implementing a formal plan to cease scrutinized business
  495  operations and to refrain from engaging in any new scrutinized
  496  business operations.
  497         5. With respect to a company on the Scrutinized Companies
  498  with Activities in Iran Terrorism Sectors List other than those
  499  companies included on the Scrutinized Companies with Activities
  500  in the Iran Petroleum Energy Sector List as of November 6, 2023,
  501  all of the following occur:
  502         a. The scrutinized business operations were made before
  503  January 10, 2024.
  504         b. The scrutinized business operations have not been
  505  expanded or renewed on or after January 10, 2024.
  506         c. The agency or local governmental entity determines that
  507  it is in the best interest of the state or local community to
  508  contract with the company.
  509         d. The company has adopted, has publicized, and is
  510  implementing a formal plan to cease those scrutinized business
  511  operations and to refrain from engaging in any new scrutinized
  512  business operations.
  513         (b) One of the following occurs:
  514         1. The local governmental entity makes a public finding
  515  that, absent such an exemption, the local governmental entity
  516  would be unable to obtain the goods or services for which the
  517  contract is offered.
  518         2. For a contract with an executive agency, the Governor
  519  makes a public finding that, absent such an exemption, the
  520  agency would be unable to obtain the goods or services for which
  521  the contract is offered.
  522         3. For a contract with an office of a state constitutional
  523  officer other than the Governor, the state constitutional
  524  officer makes a public finding that, absent such an exemption,
  525  the office would be unable to obtain the goods or services for
  526  which the contract is offered.
  527         (5) At the time a company submits a bid or proposal for a
  528  contract or before the company enters into or renews a contract
  529  with an agency or local governmental entity for goods or
  530  services of $1 million or more, the company must certify that
  531  the company is not on the Scrutinized Companies with Activities
  532  in Sudan List or the Scrutinized Companies with Activities in
  533  Iran Terrorism Sectors List and that it does not have business
  534  operations in Cuba or Syria. At the time a company or other
  535  entity submits a bid or proposal for a contract or before the
  536  company or other entity enters into or renews a contract with an
  537  agency or local governmental entity for goods or services of any
  538  amount, the company or other entity must certify that the
  539  company or other entity is not participating in a boycott of
  540  Israel.
  541         (a) If, after the agency or the local governmental entity
  542  determines, using credible information available to the public,
  543  that the company or other entity has submitted a false
  544  certification, the agency or local governmental entity shall
  545  provide the company or other entity with written notice of its
  546  determination. The company or other entity shall have 90 days
  547  following receipt of the notice to respond in writing and to
  548  demonstrate that the determination of false certification was
  549  made in error. If the company or other entity does not make such
  550  demonstration within 90 days after receipt of the notice, the
  551  agency or the local governmental entity shall bring a civil
  552  action against the company or other entity. If a civil action is
  553  brought and the court determines that the company or other
  554  entity submitted a false certification, the company or other
  555  entity shall pay the penalty described in subparagraph 1. and
  556  all reasonable attorney fees and costs, including any costs for
  557  investigations that led to the finding of false certification.
  558         1. A civil penalty equal to the greater of $2 million or
  559  twice the amount of the contract for which the false
  560  certification was submitted shall be imposed.
  561         2. The company or other entity is ineligible to bid on any
  562  contract with an agency or local governmental entity for 3 years
  563  after the date the agency or local governmental entity
  564  determined that the company or other entity submitted a false
  565  certification.
  566         (b) A civil action to collect the penalties described in
  567  paragraph (a) must commence within 3 years after the date the
  568  false certification is submitted.
  569         (6) Only the agency or local governmental entity that is a
  570  party to the contract may cause a civil action to be brought
  571  under this section. This section does not create or authorize a
  572  private right of action or enforcement of the penalties provided
  573  in this section. An unsuccessful bidder, or any other person
  574  other than the agency or local governmental entity, may not
  575  protest the award of a contract or contract renewal on the basis
  576  of a false certification.
  577         (7) This section preempts any ordinance or rule of any
  578  agency or local governmental entity involving public contracts
  579  for goods or services of:
  580         (a) One million dollars or more with a company or other
  581  entity engaged in scrutinized business operations.
  582         (b) One hundred thousand dollars or more Any amount with a
  583  company or other entity that has been placed on the Scrutinized
  584  Companies or Other Entities that Boycott Israel List or is
  585  engaged in a boycott of Israel.
  586         (8) The contracting prohibitions in this section applicable
  587  to companies on the Scrutinized Companies with Activities in
  588  Sudan List or the Scrutinized Companies with Activities in Iran
  589  Terrorism Sectors List or to companies engaged in business
  590  operations in Cuba or Syria become inoperative on the date that
  591  federal law ceases to authorize the states to adopt and enforce
  592  such contracting prohibitions.
  593         Section 4. This act shall take effect July 1, 2025.