States Introduce More “Baby” FARA Bills

States Introduce More "Baby" FARA Bills

April 30, 2024, Covington Alert

Over the past several weeks, legislatures in Arizona, California, Georgia, Oklahoma, and Tennessee have introduced bills that mirror the federal Foreign Agents Registration Act ("FARA"). There has been a trend in the states to enact so-called "baby FARA" laws that apply to foreign influenced political activity in the states, although until now those laws generally focused narrowly on regulation of political contributions.

The recently introduced bills would require agents of a "foreign principal" to register for a much broader range of activities. While each bill varies moderately, all five bills borrow heavily from the federal statute in defining the covered activities, which include representing the interests of a foreign principal before an official or agency of the state government or engaging in certain public relations and political consulting activities, among others. Another common thread among the bills is the broad definitions of a "foreign principal" and agency, which generally track the federal definitions, though the California bill includes domestic subsidiaries of a foreign corporation "if the decision to contribute or expend funds in the state is made by an officer, director, or management employee of the foreign corporation" who is not a U.S. citizen or green card holder.

The Oklahoma and Tennessee bills narrow the definition of a foreign principal to cover only principals from countries of concern, as determined by the U.S. Secretary of State, such as the People's Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People's Republic of Korea, and the Republic of Cuba.

Notably, none of the bills contain exemptions similar to the commercial exemptions or Lobbying Disclosure Act exemption that exist in the federal FARA statute. Many corporations rely on these exemptions under the federal statute, and the omission of these exemptions in the state bills could create new state level registration obligations for foreign corporations that are active in these states, including in some cases for U.S. subsidiaries of foreign corporations.