Pending Florida Legislation Would Add Restrictions on "Foreign Principals"

A couple of weeks into the 2025 legislative session, Florida legislators are considering a suite of bills focused on "foreign principals" and their political activities, access to critical infrastructure, procurement, investment and participation in litigation financing activities. The bills are directed to public and private contracting and require stress testing against Pacific theater conflict.

Foreign Principals

"Foreign principals" are associated with foreign countries (e.g., HB 583, 925; SB 766, 912). "Hostile foreign principals" are associated with "countries of concern" such as the People's Republic of China, Russian Federation, People's Republic of North Korea and Islamic Republic of Iran (HB 583, SB 766). Foreign principals from "adversarial nations" also include the Republic of Cuba and Venezuelan President Nicolás Maduro (SB 912, HB 925), or a "foreign terrorist organization" coterminous with the U.S. Department of State's list of Designated Foreign Terrorist Organizations. (Id.)

Foreign principals include governments, political parties and members, nonresidents domiciled in certain foreign countries, corporations organized in or with their principal place of business there, and foreign investors in a domestic entity with 20 percent or more beneficial ownership. (SB 766, 912) An "agent of a foreign principal" is defined as a person who acts as an agent, employee, representative or servant or otherwise acts at the order or request or under the direction or control of a foreign principal whose actions are financed, in whole or in part, by a foreign principal. (SB 766, HB 583)

Political Activities

Subject to exemptions, the legislation would require an agent for a foreign principal who would influence an agency, public official or local government entity; influence the public in creating, adopting or changing state laws or government policies; support or oppose a candidate for office; influence the outcome of an election; or support or oppose any issue to register with the Division of Elections of the Florida Department of State. (HB 583, SB 766)

In addition, an agent of a foreign principal from an adversarial nation or a foreign terrorist organization who would engage in political activities in Florida; act as a public relations counsel, publicity agent, an information service employee or a political consultant in Florida; collect, disburse or dispense any contribution, loan, money or other thing of value in Florida; or represent the interest of the foreign principal before an agency or official of Florida or any political subdivision would have to register with the Florida Attorney General (AG) unless exempt. (SB 912, HB 925)

An agent of a foreign principal from an adversarial nation or a foreign terrorist organization could not transmit or cause to be transmitted in U.S. mail or digitally any informational materials without placing a conspicuous statement that the materials are distributed on behalf of such organization. (HB 925) Nor could the agent distribute "political propaganda" to state or local officials or public bodies without disclosure of the source's foreign principal status or testify to a legislative body without furnishing the registration statement with the AG. (Id.) The agent would have to file the materials with the AG. (Id.)

Critical Infrastructure

Subject to exemptions, legislation would also require companies to register with the Florida Department of Management Services (DMS) to access "critical infrastructure" such as gas and oil production, storage or delivery systems; water supply, treatment, storage or delivery systems; telecommunications networks; electrical power delivery systems; emergency services; transportation systems and services; and personal data or other classified information storage systems, including cybersecurity. (SB 912, HB 925)

Registration would require persons accessing critical infrastructure to pass background checks; prohibit foreign nationals from "countries of concern" from accessing critical infrastructure; require disclosure of any ownership, partnership with or control from an entity not domiciled in the U.S.; require data storage in the U.S.; and require immediate reporting of security breaches.

In addition, the legislation would prohibit a person constructing, repairing, operating or otherwise having significant access to critical infrastructure or a governmental entity from entering into an agreement relating to critical infrastructure within Florida with a foreign principal if the agreement allows the foreign principal directly or remotely to access or control critical infrastructure in Florida. The owner of a critical infrastructure facility must notify DMS of any proposed sale or transfer of critical infrastructure to or proposed investment in it by an entity domiciled outside of the U.S. or an entity owned in whole or in part by a country of concern. (SB 912)

The legislation would provide that software used in state infrastructure may not be produced by a company headquartered in and subject to the laws of a country of concern or a company under the direction or control of a country of concern. Critical infrastructure providers would have to certify that they do not use any Wi-Fi router, modem system or smart meter produced by a company that is owned by the government of a country of concern, produced by a company in which a country of concern has a controlling interest, produced by a company primarily domiciled in a country of concern, or produced by a company owned or controlled by a company primarily domiciled in a country of concern. (Id.)

Furthermore, a governmental entity or critical infrastructure provider could not knowingly enter into or renew a contract with a video surveillance provider, software technology provider, Light Detection and Ranging (LiDAR) technology provider, or contracting vendor of a Wi-Fi router, modem system or smart meter if the contracting vendor is owned by these kinds of entities. (Id.)

Secure Communications

Communications providers offering service in Florida would have to file with DMS an attestation that they are not using equipment from a "federally banned corporation" in providing service in Florida. A "federally banned corporation" is any company or designated equipment previously or currently banned by the Federal Communications Commission. (SB 912)

Furthermore any "critical communications infrastructure" located within or servicing Florida would have to remove and replace all equipment prohibited by the law. "Critical communications infrastructure" includes all physical broadband infrastructure and equipment that supports the transmission of information of a user's choosing, regardless of the transmission medium or technology employed, and that connects to a network that permits the end user to engage in communications including, but not limited to, service provided directly to the public.

Office of Secure Florida

The Department of Commerce would have to establish the Office of Secure Florida to administer, inter alia, the prohibition against the purchase and registration of real property in the state by foreign principals. (HB 1125, SB 1264 – referring to sections 692.203 and 692.204, Florida Statutes).

Litigation Disclosure

A party or its counsel in a civil action, an administrative proceeding or other legal proceeding would have to disclose any foreign person, foreign principal or sovereign wealth fund that, with respect to the action, obtained or will obtain a right to receive any payment contingent on the outcome of the action, provided or will provide funds to satisfy a litigation financing agreement, or received or is entitled to receive proprietary information or information affecting national security interests obtained as a result of the financing of the action.

Pacific Conflict Stress Test

The state would also have to undertake a risk assessment in preparation for the potential disruptive impact of a conflict in the Pacific theater and establish a Council on Pacific Conflict adjunct to the Department of Law Enforcement. Focus would be on military installations, critical infrastructure, communications, critical procurement sources, state and vendor supply chains, cybersecurity, public health, and public safety and security.

Conclusion

Most of the legislation includes companion Florida House and Senate language and is on the move through multiple committees. Of course, it is early in session, and amendments are likely. If you have questions about the pending or existing legislation pertinent to foreign principals, please contact the author or another member of Holland & Knight's Florida Government Advocacy Team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.