Senate Engrossed

foreign adversary fraud office; appropriation

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1308

AN ACT

Amending title 41, chapter 1, article 5, Arizona Revised Statutes, by adding section 41-191.14; repealing section 41-191.14, Arizona Revised Statutes; amending title 41, chapter 41, article 2, Arizona Revised Statutes, by adding section 41-4274; repealing section 41-4274, Arizona Revised Statutes; APPROPRIATING monies; relating to the attorney general.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 41, chapter 1, article 5, Arizona Revised Statutes, is amended by adding section 41-191.14, to read:

START_STATUTE41-191.14. Foreign adversary fraud office; fund; definition

A. The foreign adversary fraud office is established in the attorney general's office. The office shall bring legal claims against entities in this state that are suspected of violating consumer fraud laws in the marketing, distribution or sale of any technology that is produced by a foreign adversary.

B. the attorney general shall appoint The director of the office.

C. At the discretion of the attorney general, the office may pursue any INVESTIGATIOn, litigation strategy or legal activity to defend this state against foreign adversaries.

D. The Foreign ADVERSARY fraud fund is established consisting of legislative appropriations. Monies in the fund are CONTINUOUSLY appropriated and are exempt from the provisions of section 35-190 relating to the lapsing of appropriations, except that all monies in the fund exceeding $10,000,000 at the end of the fiscal year are transferred to the foreign adversary technology rip and replace fund established by section 41-4274. The Attorney General's office shall administer the fund. the attorney general shall use monies in the fund to provide resources for THE FOREIGN ADVERSARY FRAUD OFFICE, to staff the foreign adversary fraud office and for litigation costs associated with bringing legal claims pursuant to this section.

e. For the purposes of this section, "Foreign Adversary" means a country that is determined to be a foreign adversary pursuant to 15 code of federal regulations section 791.4. END_STATUTE

Sec. 2. Delayed repeal

Section 41-191.14, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2030.

Sec. 3. Title 41, chapter 41, article 2, Arizona Revised Statutes, is amended by adding section 41-4274, to read:

START_STATUTE41-4274. Foreign adversary technology rip and replace fund; critical infrastructure; audit; definitions

A. The Foreign ADVERSARY technology rip and replace fund is established consisting of legislative appropriations and monies deposited pursuant to section 41-191.14. Monies in the fund are CONTINUOUSLY appropriated and are exempt from the provisions of section 35-190 relating to the lapsing of appropriations. The department shall administer the fund. monies in the fund shall be used to replace any TECHNOLOGY that is produced by a foreign adversary from any critical infrastructure.

B. The department shall create a list of all critical infrastructure to audit based on the security risk posed by the presence of any technology that is PRODUCED by a foreign ADVERSARY.

C. For the purposes of this section:

1. "CRITICAL INFRASTRUCTURE" means Infrastructure that is owned or operated by this state, a political subdivision of this state or a publicly regulated utility and that is any of the following:

(a) a GAS AND OIL PRODUCTION, STORAGE OR DELIVERY SYSTEM.

(b) a WATER SUPPLY REFINEMENT, STORAGE OR DELIVERY SYSTEM.

(c) an ELECTRICAL POWER DELIVERY SYSTEM.

(d) a TELECOMMUNICATIONS NETWORK.

(e) a TRANSPORTATION SYSTEM AND SERVICE.

(f) a PERSONAL DATA STORAGE SYSTEM, INCLUDING CYBERSECURITY.

(g) an Emergency service.

2. "FOREIGN ADVERSARY" MEANS A COUNTRY that is DETERMINED TO BE A FOREIGN ADVERSARY PURSUANT TO 15 CODE OF FEDERAL REGULATIONS SECTION 791.4. END_STATUTE

Sec. 4. Delayed repeal

Section 41-4274, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2031.

Sec. 5. Appropriation; foreign adversary fraud fund; exemption

A. The sum of $500,000 is appropriated from the state general fund in fiscal year 2026-2027 to the foreign adversary fraud fund established by section 41-191.14, Arizona Revised Statutes, as added by this act.

B. The appropriation made in subsection A of this section is exempt from the provisions of section 35-190, Arizona Revised Statutes, relating to lapsing of appropriations.