STATE CAPITOL, PHOENIX –   State Representative Lupe Diaz issued the following statement following Governor Katie Hobbs’ veto of HB2542, his legislation to stop Arizona tax dollars from going to companies tied to the People’s Republic of China.

“Frankly, it is hard to understand. The bill was simple: if a company wants a contract with the State of Arizona, it must certify that it is not owned or controlled the People’s Republic of China. Lie about it, and you face consequences: a $100,000 fine and a five-year ban from doing business with the state. 

This regime is hostile does not share our values. It has stolen American intellectual property, meddled in elections, and targeted U.S. infrastructure. There is no reason Arizona should be cutting them checks.

What makes this veto even worse is the staggering hypocrisy. Just two weeks ago, Democrat Governor Hobbs claimed the Legislature was not doing enough to stand up to foreign threats. Her exact words? ‘The legislative majority needs to stop playing games with Arizona’s security and get serious about cracking down on enemies seeking to do us harm.’ 

HB2542 was exactly that—taking the threat seriously. And she killed it.

You can’t issue press statements about ‘getting tough on China’ while vetoing a bill that actually would. Governor Hobbs’ BAN Act is all bark and no bite. HB2542 would have kept companies tied to the People’s Republic of China out of our state procurement system. 

The U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party has laid out the threat clearly. China is flooding U.S. markets with artificially cheap goods to undercut American companies and dominate key industries. This is economic warfare and surveillance wrapped in one. From drones to wi-fi routers to cameras and 5G equipment, the Chinese Communist Party is embedding itself in our supply chains—undermining our security and using that foothold to spy on us. HB2542 was a step toward pushing them out.

Vetoing this bill sends a message that Arizona is still open for business with hostile regimes. I will not let that slide. I will be bringing this bill back next session, and I hope the governor will stop playing both sides and help us do the right thing.” 

Lupe Diaz is a Republican member of the Arizona House of Representatives serving Legislative District 19 in Southeastern Arizona and is Chairman of the House Land, Agriculture & Rural Affairs Committee. Follow him on X at @LupeDiaz4AZ.