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HB 4237

Local government: other; procedures to limit foreign influence in local contracting; establish. Creates new act. TIE BAR WITH: HB 4236'25

2025-2026 Regular Session Introduced by Greg Alexander and 15 co-sponsors

HB 4237 bars local governments from contracts with entities tied to listed foreign countries of concern, requires affidavits for PII access, bans certain ICT, and imposes penalties

bill electronically reproduced 03/13/2025
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Bill Summary · HB 4237

Summary — HB 4237 (Local government contracting act)

Status: Introduced March 13, 2025; referred to Committee on Government Operations; public hearing held April 22, 2025.
Note: The bill contains a tie‑bar — it does not take effect unless HB 4236 is enacted.

Purpose

HB 4237 creates a new "local government contracting act" to limit foreign influence in local government contracting. It (1) prohibits local governments from awarding, extending, or renewing certain contracts with entities controlled by specified foreign countries of concern; (2) requires vendor affidavits attesting no such control when contracts involve access to personal identifying information (PII); (3) forbids use/provision of certain information and communications technology (ICT) and requires local security procedures; and (4) authorizes civil sanctions for violations.

Key definitions

  • Controlled entity: an entity that is owned by, has a controlling interest held by, or is organized/has principal place of business in a listed foreign country of concern.
  • Controlling interest: power to direct management/policies; a presumption of control exists if a government directly or indirectly can vote 25%+ of voting interests or is entitled to 25%+ of profits.
  • Foreign country of concern: explicitly lists — People's Republic of China; Russian Federation; Islamic Republic of Iran; Democratic People's Republic of Korea (North Korea); Republic of Cuba; the Venezuelan regime of Nicolás Maduro; Syrian Arab Republic; and agencies/entities under significant control of those listed.
  • Procurement contract: broadly includes construction, acquisition/disposal of supplies, services, information technology, etc.
  • Unit of local government: political subdivisions (cities, counties, townships, school districts, community colleges, authorities, etc.).

Major provisions and timelines

  • Affidavit requirement (effective on act’s effective date): any applicant for a procurement contract that would give the contractor access to personal identifying information (PII) must submit a sworn affidavit attesting they are not a controlled entity. A local unit may not knowingly enter into such a contract with a controlled entity.
  • Renewal/extension rules (effective July 1, 2026): local units may not knowingly extend or renew existing PII‑access contracts unless the contractor provides the same affidavit; they may not extend or renew such contracts with controlled entities.
  • Contract clause prohibiting banned ICT (effective on act’s effective date): a local unit may not enter into a procurement contract unless it contains an agreement that the contractor will not use or provide ICT, equipment, components, networks, or systems that (a) appear on the state MMB list (see MCL 18.1272), (b) have been restricted by a federal agency for national security reasons, or (c) are designed/produced by companies owned/controlled/domiciled in a foreign country of concern (as determined by state/federal agency).
  • Prohibition on local use/provision of banned ICT: local governments themselves may not use or provide such identified ICT and must establish security procedures to protect local information and property from exploitation by a foreign country of concern.

Enforcement and penalties

  • Violations by an applicant or contractor: civil fine up to twice the contract amount (equal to twice the applied for or awarded contract amount).
  • Debarment: the applicant/contractor may be made ineligible to enter into, extend, or renew procurement contracts with that local unit for up to 5 years (determined by the unit).

Who is affected

  • Units of local government across the state (cities, counties, townships, school districts, community colleges, authorities, etc.).
  • Contractors, vendors and suppliers bidding on or performing procurement contracts that involve access to PII or that provide ICT, networks, systems, or components.
  • Companies with ownership, control, or significant ties to the listed foreign countries of concern — particularly those meeting the 25% thresholds.

Practical impact

  • Increases due‑diligence and compliance requirements for vendors (sworn affidavits, contract clauses) and for local procurement processes.
  • Could bar certain foreign‑linked vendors and ICT products from local government contracts and systems.
  • Requires local governments to adopt specific security procedures and procurement contract language, and to monitor and enforce compliance.

Procedural note

  • The bill does not become effective unless HB 4236 is also enacted into law (enacting section).

Compiled from official sources — confirm details with the bill’s official record.

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