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LEGISLATIVE BILL 1300
Approved by the Governor April 16, 2024
Introduced by Bostar, 29; Brewer, 43; Ballard, 21; at the request of the Governor.
A BILL FOR AN ACT relating to law; to amend sections 14-137, 14-211, 14-217.02,
14-2104, 15-309, 19-412, 19-616, 23-1114, 23-1114.07, 70-624.02, 80-102,
81-503, and 81-830, Reissue Revised Statutes of Nebraska, and sections
80-104 and 80-316, Revised Statutes Cumulative Supplement, 2022; to adopt the Pacific Conflict Stress Test Act, the Foreign Adversary Contracting Prohibition Act, the Nebraska Nonprofit Security Grant Program Act, and the Wildland Fire Response Act; to define terms; to provide security requirements for chemical facilities; to provide for preemption; to create the Commission on Asian American Affairs and provide for its membership,
powers, duties, and compensation; to change provisions relating to
salaries of governing bodies and require approval of registered voters for increases; to change provisions relating to county veterans service committees and certain veterans aid programs; to provide duties for the State Fire Marshal and Homeland Security Policy Group; to harmonize provisions; to provide operative dates; to provide severability; to repeal the original sections; and to declare an emergency.
Be it enacted by the people of the State of Nebraska,
Section 1. Sections 1 to 6 of this act shall be known and may be cited as
the Pacific Conflict Stress Test Act.
Sec. 2. The purpose of the Pacific Conflict Stress Test Act is to prepare and secure the State of Nebraska in order to minimize the disruptive impact of
a potential conflict precipitated by foreign adversaries against allies,
democratic countries, and the United States Armed Forces in the Pacific theater.
Sec. 3. For purposes of the Pacific Conflict Stress Test Act:
(1) Critical infrastructure means systems and assets, whether physical or
virtual, so vital to this state or the United States that the incapacity or
destruction of such systems and assets would have a debilitating impact on
state or national security, state or national economic security, state or
national public health, or any combination of such matters. Critical infrastructure may be publicly or privately owned and includes, but is not limited to:
(a) Fossil fuel production, storage, or delivery systems;
(b) Water supply, refinement, storage, or delivery systems;
(c) Telecommunications networks;
(d) Electrical power delivery systems, including power generation,
transmission, and distribution systems;
(e) Emergency services; and
(f) Transportation systems and services;
(2) Critical procurement means those acquisitions made by the state or any agency of the state that are critical to the proper functioning of critical infrastructure or to the health, safety, or security of the State of Nebraska or the United States;
(3) Divestment means the sale, forfeiture, or otherwise contractual end of
any current or planned ownership or control of assets;
(4) Investment means any transfer of funds into any active or passive,
direct or indirect, structure which seeks to generate revenue or accomplish any other gain, including nonmonetary gains;
(5)(a) Pacific conflict means a declared war or armed conflict between the United States or any of its allies and another nation that occurs in the land,
sea, or air area of the Pacific Ocean and threatens or could reasonably escalate to threaten the supply chains, critical infrastructure, safety, or security of the State of Nebraska or the United States.
(b) Pacific conflict includes a serious deterioration of diplomatic ties or economic engagement between the United States or its allies and another nation that threatens the status quo of Pacific trade, travel, and military operations or exercises;
(6)(a) State-managed fund means any short-term or long-term investment structure that is state-managed, state-run, state-controlled, or otherwise overseen by the State of Nebraska, a state agency, a political subdivision of
this state, or any agency controlled by such a political subdivision. This subdivision shall apply only to any fund that is subject to the purview or
direction of the state or applicable political subdivision and is populated,
wholly or in part, with state funds, including, but not limited to, any such fund managed by a third-party entity, such as a fiduciary.
(b) State-managed fund includes, but is not limited to, public pension funds, public retirement funds, or other state-sponsored funds, that are sponsored, maintained, or contributed to or required to be contributed to by this state or any subsidiary of the state;
(7) State supply chain means the end-to-end process for shipping goods,
purchased by the state, to the State of Nebraska, beginning at the point of
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origin through a point or points of distribution to the destination; and
(8) State vendor supply chain means the end-to-end process for shipping goods, purchased by the state from state vendors, to the vendors, beginning at
the point of origin through a point or points of distribution to the destination.
Sec. 4. (1) The Department of Administrative Services shall conduct a review of critical procurements purchased or supplied through a state supply chain or state vendor supply chain and produce a report, which shall be
electronically submitted using a secure method to the Governor by November 1,
2024.
(2) The report shall:
(a) Summarize the critical procurements produced in or by a foreign adversary, a state-owned enterprise of a foreign adversary, a company domiciled within a foreign adversary, or a company owned by a company domiciled within a foreign adversary;
(b) Summarize the critical procurements manufactured in countries or by companies at risk of disruption in the event of a Pacific conflict;
(c) Summarize the critical procurements sourced from any country or
company which utilizes Pacific supply chain processes at risk of disruption in
the event of a Pacific conflict;
(d) Assess the difficulty in identifying potential alternative sourcing,
if relevant; and
(e) Assess the level of risk to the State of Nebraska associated with such
a disruption in sourcing for each procurement that is threatened in the event of a Pacific conflict.
(3) The Department of Administrative Services may contract with a private consultant to assist with the review and report required under this section,
and such contract need not be competitively bid.
(4) Information contained in the report required under this section is
confidential. Unauthorized public disclosure of such confidential information is a Class III misdemeanor.
Sec. 5. (1) The Nebraska Investment Council shall conduct an audit of all state-managed funds and produce a report, which shall be electronically submitted using a secure method to the Committee on Pacific Conflict created under section 6 of this act and the Governor within one hundred eighty days after the operative date of this section.
(2) The report shall:
(a) Summarize the investments at risk of substantially losing value or
being frozen, seized, or appropriated by foreign adversaries in the event of a Pacific conflict;
(b) Summarize the investments in any arms industry of a foreign adversary;
(c) Summarize the investments in state-owned enterprises of a foreign adversary;
(d) Summarize the investments in companies domiciled within a foreign adversary or owned by a company domiciled within a foreign adversary; and
(e) Recommend strategies for the immediate and complete divestment of the assets described in subdivisions (a) through (d) of this subsection.
(3) Information contained in the report required under this section is
confidential. Unauthorized public disclosure of such confidential information is a Class III misdemeanor.
Sec. 6. (1) It shall be the policy of the State of Nebraska to:
(a) Support the civilian and military command of the United States and its efforts to promote and maintain prosperity, peace, and security for America and its allies;
(b) Enhance the defensive posture of this state so as to protect state citizens and assets and to contribute to the broader defensive posture of the United States by reducing security vulnerabilities within this state; and
(c) Exercise foresight and make reasonable preparations for a potential regional or global conflict centered on the Pacific theater which could involve attacks upon the United States and its allies in the Pacific theater, which could involve asymmetrical attacks on the American homeland, and which could cause the disruption or complete severing of supply chains between this state and its vendors and the People's Republic of China, the Republic of China, or other countries in the Pacific theater.
(2) The Committee on Pacific Conflict is hereby created. The committee shall consist of the following seven voting members:
(a) The Director of State Homeland Security, appointed pursuant to section
81-830, who shall serve as chairperson of the committee;
(b) The Director of Administrative Services;
(c) The state investment officer;
(d) The Adjutant General; and
(e) Three individuals with applicable knowledge of the threats posed to
this state in the event of a Pacific conflict, including at least one individual who represents an entity that is responsible for the operation and maintenance of critical infrastructure in this state. Such individuals shall be
appointed by the Governor.
(3) The committee shall also include four members of the Legislature, to be appointed by the Executive Board of the Legislative Council. The legislative members shall be nonvoting members of the committee.
(4) Appointments to the committee shall be made within sixty days after the operative date of this section.
(5) The committee shall be authorized for an initial period of three years.
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(6) The first meeting of the committee shall be held within ninety days after the operative date of this section.
(7) The committee shall meet no less than once every three months.
Additional meetings may be called at the will of the majority of the voting members of the committee, and emergency meetings may be called at the will of
the chairperson of the committee or the Governor. In the interest of state and national security, meetings of the committee shall not be subject to the Open Meetings Act and the records and documents of the committee shall not be
considered public records for purposes of sections 84-712 to 84-712.09.
(8) At the discretion of the committee, an advisory board may be
established and subject matter experts may be consulted to provide expertise or
collaborative research support.
(9) The committee is authorized to liaise with relevant federal government authorities, authorities from other state governments, and experts from research institutions for the purpose of obtaining information that is useful for the committee's work.
(10) The committee is authorized to produce policy recommendations for the State of Nebraska.
(11) The committee is authorized to conduct secure hearings or briefings with critical infrastructure providers for the purpose of understanding the threats, risks, and vulnerabilities posed to critical infrastructure in the event of a Pacific conflict, including potential mitigation or emergency response strategies.
(12) The Governor shall annually produce and publish a state threat assessment no later than the day prior to the annual address made to the Legislature by the Governor. The annual state threat assessment shall provide an overview of the substantial threats to state or national security, state or
national economic security, state or national public health, or any combination of such matters, occurring within and threatening the State of Nebraska to the extent such information can be provided and stored in a manner that meets national security standards. The state threat assessment shall include summary nonconfidential findings of the Committee on the Pacific Conflict. Such summary nonconfidential findings shall include no information that would create any risk to state critical infrastructure or other sensitive state assets.
(13) The committee may, at the discretion of the committee and upon an
affirmative vote of five of the committee's seven voting members, produce a confidential report that shall be kept in a secure location to be determined by
the Governor and which shall only be accessed with the approval of the Governor. Such report shall contain information, instructions, and other findings that the committee deems useful to preserve for the elected leaders of
the State of Nebraska.
Sec. 7. Sections 7 to 13 of this act shall be known and may be cited as
the Foreign Adversary Contracting Prohibition Act.
Sec. 8. The Legislature finds that:
(1) Dealings with commercial entities that are organized under the laws of
a foreign adversary or that have their principal place of business within a foreign adversary tend to be less commercially sound because such entities are unusually likely to be acting on noncommercial motivations and carry increased political risk, including from United States federal sanction authorities;
(2) When such a commercial entity is a state-owned entity, it presents heightened concerns and threatens this state's security, including by making accessible to the foreign adversary information about the structure,
operations, resources, and infrastructure of the government of this state; and
(3) Dealings with such commercial entities, and especially state-owned entities, threaten the privacy and security of residents of this state, to the extent that they involve the personal information of such residents.
Sec. 9. For purposes of the Foreign Adversary Contracting Prohibition Act:
(1) Company means any sole proprietorship, organization, association,
corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association that exists for the purpose of making a profit, including all wholly owned subsidiaries, majority owned subsidiaries, parent companies, or affiliates of
any such entity or business association;
(2) Foreign adversary means a foreign adversary as determined pursuant to
15 C.F.R. 7.4;
(3) Owned in whole or in part means:
(a) For a publicly traded company, any share of ownership that entails the ability to direct or influence the operations of the company, the ability to
appoint or discharge any board members, officers, or directors, or any other rights beyond those available to a retail investor holding an equivalent share of ownership; and
(b) For a privately held company, any share of ownership;
(4) Public entity means the state or any department, agency, commission,
or other body of state government, including publicly funded institutions of
higher education, any political subdivision of the state, and any other public or private agency, person, partnership, corporation, or business entity acting on behalf of any such public entity;
(5) Scrutinized company means:
(a) Any company organized under the laws of a foreign adversary or having its principal place of business within a foreign adversary, and any subsidiary of any such company;
(b) Any company owned in whole or in part or operated by the government of
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a foreign adversary, an entity controlled by the government of a foreign adversary, or any subsidiary or parent of any such company; or
(c) Any company that sells to a public entity a final technology-related product or service that originates with a company described in subdivision (5)
(a) or (b) of this section without incorporating that product or service into another final product or service; and
(6) Technology-related product or service means a product or service used for information systems, surveillance, light detection and ranging, or communications.
Sec. 10. A scrutinized company shall not bid on, submit a proposal for,
or enter into, directly or indirectly through a third party, any contract or
contract renewal with any public entity for any technology-related product or
service.
Sec. 11. A public entity shall require a company that submits a bid or
proposal or enters into any contract or contract renewal with any public entity for any technology-related product or service to certify:
(1) That the company is not a scrutinized company;
(2) That the company will not subcontract with any scrutinized company for any aspect of performance of the contemplated contract; and
(3) That any products or services to be provided do not originate with a scrutinized company.
Sec. 12. (1) No public entity shall enter into any contract or contract renewal that would result in any state or local government funds being transferred:
(a) To a scrutinized company in connection with any technology-related product or service; or
(b) To any company in connection with any technology-related product or
service that originates with a scrutinized company.
(2) Notwithstanding subsection (1) of this section, a public entity may enter into a contract for goods manufactured by a scrutinized company if:
(a)(i) There is no other reasonable option for procuring such good;
(ii) The contract is preapproved by the Department of Administrative Services; and
(iii) Not procuring such good would pose a greater threat to the state than the threat associated with the good itself; or
(b) The purchasing entity is an electric supplier that is not out of
compliance with the Critical Infrastructure Protection requirements issued by
the North American Electric Reliability Corporation.
Sec. 13. (1) Any contract entered into in violation of the Foreign Adversary Contracting Prohibition Act shall be null and void.
(2) Any scrutin