BILL NUMBER: S9364B
SPONSOR: COONEY
TITLE OF BILL:
An act to amend the state finance law and the general municipal law, in
relation to prohibiting procurement of certain technology that poses
security threats
PURPOSE OR GENERAL IDEA OF BILL:
To prohibit the state and all municipalities from procuring technology
that poses a security threat.
SUMMARY OF PROVISIONS:
Section 1 amends the state finance law by adding a new section 163-e
prohibiting the state from procurement of technology from companies
prohibited from federal procurement under certain sections of Public
Law; or a company for which procurement was determined to be a national
security threat; and designates entities with waiver authority.
Section 2 amends the general municipal law by adding a new section 103-h
providing for the same procurement prohibition for municipalities.
Section 3-directs the Office of General Services to promulgate rules and
regulations on state procurement, as well as issue guidance to local
procurement authorities.
Section 4 is the effective date.
JUSTIFICATION:
Security experts in the federal government have determined that govern-
ment use of technology from certain international companies poses a
threat to national security, due to the companies' close ties to another
country's government. This technology has the genuine potential to
surreptitiously transmit sensitive data to another country, and act as a
"back door" for another country to engage in cyberattacks.
Due to the security concern, Congress has passed multiple laws prohibit-
ing this technology from federal procurement. Section 889 of the John S.
McCain National Defense Authorization Act for Fiscal Year 2019 estab-
lished a policy that the federal government would actively maintain and
update a list of prohibited international tech products that posed a
security threat. Section 5459 of the James M. Inhofe National Defense
Authorization Act for Fiscal Year 2023 prohibited federal procurement of
technology containing semiconductors from certain internatio Companies.
' Additionally, the Department of Defense Inspector General's report
"Audit of the DoD's Management of the Cybersedurity Risks for Government
Purchase Card Purchases of Commercial Off-the-Shelf Items" (DODIG-2019-
106) concluded that the US Navy's procurement of technology from
certain, international companies Constituted a threat to national secu-
rity.
Nonetheless, New York is one of 49 states that still procures technology
from these companies, with contracts worth tens of millions of dollars.
This bill prohibits the State and all municipalities from procurement of
technology from the companies whose procurement the federal government
determined to be a national security threat, protecting sensitive infor-
mation and preventing cyberattacks. This will also support the growing
domestic semiconductor industry, including the planned $100 billion
semicondudtor plant in Clay, New York. The act takes effect in five
years, a time when there is projected to be a robust domestic semicon-
ductor industry.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Minimal.
EFFECTIVE DATE:
This act shall take effect five years-after it shall have become a law.
Effective immediately, the office of.general services is authorized to
promulgate rules and regulations and issue guidance to all state agen-
cies and local procurement authorities necessary for the implementation
of this act on its effective date, including providing updates on
prohibited or excluded entities for procurement contracts in conformity
with federal law, rules and regulations.