The bill, SB 355, introduces the "Litigation Financing Disclosure Act," which establishes regulations for third-party litigation financing, particularly when the funding source involves foreign entities. Key provisions include definitions for terms such as "foreign entity," "litigation financer," and "litigation financing contract." The bill mandates that any foreign third-party litigation funder must disclose specific information to the attorney general, including the identity of foreign entities involved in funding and any proprietary information that may affect national security interests. Additionally, it prohibits foreign funders from influencing the conduct of civil proceedings and requires that any agreements violating these provisions be deemed null and void.

The bill also clarifies that nonprofit legal organizations funded by private donors representing clients pro bono are exempt from these regulations, ensuring they do not have to disclose their funding sources. The existence of litigation financing contracts will be subject to discovery in civil actions, and the attorney general is tasked with monitoring compliance and reporting on foreign involvement in litigation financing annually. The proposed law is set to take effect on August 1, 2024.