Bill
HB 5976
Prohibits state contracts with principals who donated to certain political entities within 18 months, requires attestation, and voids contracts if violated.
HB 5976 Summary — State management: purchasing; awarding contracts to entities that donate or contribute to certain political candidates or committees; prohibit (Sec. 264b)
Overview
- Purpose: To bar state contracts from being awarded to contractors whose principals made political donations or contributions to specified candidates or committees within a defined window, unless certain conditions are met. The bill adds new Sec. 264b to the Michigan "Management and Budget Act" (1984 PA 431, MCL 18.1101 - 18.1594).
- Key aim: Increase procurement integrity and reduce potential improper influence by donors in state contracting.
Legislative Status and Timeline
- Introduced: September 26, 2024 (Rep. Donavan McKinney and cosponsors)
- Initial action: Read a first time and referred to the Committee on Elections (Sept. 26, 2024)
- Subsequent actions: Bill electronically reproduced on Sept. 26, 2024; later actions include a referral on January 22, 2025 to the Joint Committee on Finance, Revenue and Bonding
- Effective date and applicability: The provision applies to contracts that take effect, are extended, renewed, or modified after the amendatory act’s effective date.
What the bill would do (Sec. 264b)
1) Prohibited contracts (18-month window)
- For contracts signed (or proposed to be signed) 18 months after the act’s effective date, the department or any state agency cannot enter into a contract with a principal who, within 18 months before signing, donated or contributed to:
- A candidate committee for statewide, state legislative, or local government office
- A state or local party committee
- A 527 committee
- A candidate-affiliated 501(c)(4) committee
- A contractor-affiliated 501(c)(4) committee
2) Required contractor attestation (contract clauses)
- Any contract awarded must include a provision requiring the contractor to attest that its principals did not donate or contribute (as described in (1)) during:
- 18 months before signing
- During the contract term
- 18 months after the contract ends or terminates
3) Consequences of violation
- If violated, the contract is unenforceable and void.
- The violator is barred from future state contracts for 3 years from the date of the violation.
4) Exceptions for timely donations
- Donations returned by:
- The date of the proposal for the contract, or
- Within 30 days after receipt by the recipient committee treasurer
- In such cases, the donation is not considered a violation for purposes of (3)
5) Exclusions (who/what is not covered)
- Loans or loan guarantees
- Subsidies or grants allocated through the state budget process
- Collective bargaining agreements
- Agreements between public universities
- Agreements between political subdivisions of the state
- Contractors and prospective contractors with aggregate state contracts under $250,000
6) Applicability timing
- Applies only to agreements that take effect, are extended, renewed, or modified after the act’s effective date.
7) Definitions of key terms
- Candidate affiliated 501(c)(4) committee: A 501(c)(4) civic league/organization established by or connected to a candidate or elected/state official, or their staff, or a state/ local party committee.
- Contractor affiliated 501(c)(4) committee: A 501(c)(4) group that receives at least half its funding from the contractor or is established/controlled by the contractor or related persons.
- 527 committee: A political organization under IRC 527.
- Principal: The contractor’s executive or officer, board member, person with 5% ownership, individuals with governance or government-contract responsibilities, certain employees, related family members, subsidiaries, or political committees controlled by the contractor.
Definitions also include a broad list of who counts as a “family member” for purposes of affiliation.
Impact and Considerations
- Procurement integrity: The bill creates a sanctions-based framework to deter political donations by entities seeking state contracts.
- Vendor risk: Could affect contractors with political ties or complex ownership structures; the 250k threshold provides some relief for smaller contractors.
- Compliance burden: Requires contract language attestation and ongoing monitoring of donations; potential disputes over what constitutes donations, timing, and control.
- Scope limitations: Excludes certain categories (loans, subsidies, bargaining agreements, university or intergovernmental agreements) and applies only to newer or modified agreements post-enactment.
Note
- This summary reflects the bill text provided for HB 5976 and current legislative actions as listed. For precise language, timelines, and status, consult the official bill text and legislative trackers.
Compiled from official sources — confirm details with the bill’s official record.
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