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Lawmakers move to curb Chinese participation in Alabama economy

MONTGOMERY, Ala. – A series of bills introduced recently in the Alabama Legislature would impose strict limits on the participation of the Chinese government, as well as Chinese citizens or entities from certain aspects of the state’s economy.

Perhaps most notable of the three bills is House Bill 379, Dubbed the Alabama Property Protection Act. Sponsored by Rep. Scott Stadthagen, R-Hartselle, the bill would prohibit the Chinese Government, as well as any Chinese citizen or entity from purchasing property in the state of Alabama. 

The bill has already amassed considerable support, with 25 other House representatives co-sponsoring it.

As it relates to entities, the bill would prohibit real estate purchases in Alabama by any company headquartered in China, held or controlled by the government directly or indirectly, or of which the majority of its stock or ownership is held by Chinese citizens.

Regarding citizens, the bill makes no exceptions for those with dual citizenship in both the United States and China, meaning any individual with Chinese citizenship would be barred from purchasing property in the state. The bill is not retroactive, however, meaning Chinese citizens who purchased property before Stadthagen’s bill went into effect, were to become law, would not be affected.

The bill is similar in intent, though smaller in scope, to a bill introduced in late 2022 by U.S. Sen. Tommy Tuberville and Sen. Tom Cotton, R-Arkansas, which would have prohibited members of the Chinese Communist Party from purchasing land in the United States. While the bill ultimately died in committee, Tuberville reintroduced a similar bill this year.

Stadthagen’s bill is scheduled to be voted on first in the House Urban and Rural Development Committee on Wednesday.

Another bill targeting China is House Bill 321, which would prohibit any state agency or government body from purchasing Chinese-made drones or unmanned aircraft if the manufacturer is listed on the U.S. Treasury Department’s sanctions and embargo list, referred to as the Specially Designated Nationals and Blocked Persons List (SDN List).

Updated regularly, the SDN List has 441 different Chinese entities and individuals listed as of May 1. And with more than 80% of civilian drones made by Chinese companies as of 2020, the bill may have a significant effect particularly on law enforcement agencies that use drones, as did a similar law that went into effect this year in Florida banning Chinese-made drones for state entities.

“I’ve checked with a couple of different agencies and it’s my understanding that this is not a standard practice, it’s not something that’s being done especially down on the local government level by any means,” said Rep. James Lomax, R-Huntsville, the sponsor of the bill. 

“The way I view it is it’s a best practice, it really sets forth a new guideline for procurement going forward, because there’s not really any specific guidelines especially when it comes to drones.”

Lomax told Alabama Daily News that a big motivation for filing the bill was his district’s proximity to the U.S. Army post Redstone Arsenal, the largest employer in Huntsville that is home to more than 80 different agencies, mostly related to national defense.

“This puts in an extra protective layer if somebody inadvertently is shooting pictures or images, and via an embedded software or hardware, is sending it to a foreign national,” Lomax told Alabama Daily News.

“Anytime you’re dealing with technology that is foreign manufactured, you’re going to be dealing with the potential risks of some kind of embedded software or in the hardware; I can’t point to any cases that (have) occurred in the state of Alabama, it may just be that we don’t know if it’s occurring or not. So it’s really taking one of our country’s largest advisories, economically, and putting them in the cross hairs a little bit for our state government.”

Lomax’s bill will first be voted on in the House State Government Committee.

The third bill, filed by Rep. Mike Shaw, R-Hoover, would prohibit certain government bodies – notably the boards of the Retirement Systems of Alabama and the Judicial Retirement Fund, as well as the state treasurer – from holding any stock or ownership of certain Chinese companies.

House Bill 406 would require the state treasurer and the boards of the RSA and JRF to create a publicly available list of prohibited companies, which would include any company owned or controlled by the Chinese military or government. Following the list’s creation, the state treasurer, RSA board and JRF board would have to divest any and all holdings in said companies within 180 days of being listed as a prohibited company.

Both Lomax’s and Shaw’s bills were referred to the House State Government Committee for possible future votes.

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