Committee approves bill giving secretary of state limited power to dissolve businesses tied to foreign adversaries

The committee advanced House Bill 459, a bill that would grant the Tennessee secretary of state limited authority to dissolve businesses owned or controlled by entities identified as foreign adversaries under a federal Commerce Department list (15 CFR 791.4).

Sponsor Representative (identified in the transcript as the bill’s sponsor) told the committee the measure responds to federal investigations that found shell companies operating inside U.S. jurisdictions and funneling funds to malign actors. He said the bill “grants the Tennessee secretary of state the limited authority to dissolve a business owned or controlled by a foreign adversary as defined by the federal secretary of commerce.”

The committee took testimony from Michael Harmon, general counsel to the secretary of state’s office, who said the likely triggers for state action would include referrals or findings from federal law enforcement (for example the FBI or Department of Justice) or the Tennessee attorney general’s office rather than a wholesale review of all business filings. Harmon told the committee the bill relies on 15 CFR 791.4 for the list of foreign adversaries and that, as of the hearing, six entities were listed in that section.

Representative Clemons asked about the practical identification of shell companies; Harmon replied the federal government is most likely to identify malicious entities and the state’s role would be to act on referrals. Representative Clemons and others pressed to ensure the statutory reference to the Commerce Department list was clear, noting that other federal agencies can also identify risks. Harmon said the bill’s use of the Department of Commerce list was chosen because the measure deals with businesses.

The committee voted to advance the bill to calendar and rules; the clerk announced 22 ayes, 0 nos.