Science and Technology Committee backs bill to create foreign-adversary fraud office, seed rip-and-replace fund

The Arizona Science and Technology Committee voted to return Senate Bill 1308 with a due-pass recommendation after hearing testimony that the measure would establish a foreign-adversary fraud office within the state attorney general’s office and seed a rip-and-replace fund to remove vulnerable technology from critical infrastructure.

Staff summarized the bill for the committee, saying it “establishes the foreign adversary fraud office within the office of the attorney general to pursue consumer fraud violations involving technology produced by a foreign adversary,” creates a Foreign Adversary Fraud Fund and includes a $500,000 appropriation in fiscal year 26-27 to support enforcement activity.

Matthew Dumee, an attorney with Fusion Law who identified himself as a former consumer litigation unit chief in the Arizona attorney general’s office, told the committee the measure addresses a growing consumer- and government-facing security risk. “These cameras oftentimes have undisclosed backdoors or security vulnerabilities that then can be abused,” Dumee said, citing incidents in which hacked Hikvision camera feeds were sold online and were relabeled by an Arizona company identified in testimony as Resideo.

Dumee argued the appropriation would act as seed money for enforcement: “The bill appropriates $500,000 to the AG’s office to bring these cases,” he said, and proceeds from enforcement actions would be deposited into the rip-and-replace fund to remove vulnerable equipment from state systems.

A committee member asked how the state would identify devices and systems for replacement; Dumee said the bill defines critical infrastructure and that the Department of Homeland Security would identify critical infrastructure and administer the rip-and-replace funds under the bill. He also told the panel the $500,000 is intended to generate settlements or judgments that would grow the fund over time.

Vice Chair moved that SB 1308 be returned with a due-pass recommendation; the committee approved the motion in an 8-0 roll call vote with one member absent. The committee recorded the recommendation and adjourned without further action.

The bill’s sponsor, identified in the hearing as President Peterson, did not attend the committee meeting. The transcript did not include a statutory citation for the consumer-protection reference noted in testimony (the witness referred to an "Arizona Consumer Product" law but did not provide a full citation).