Bill
HB 4240
The act limits contracts, grants, and gifts with foreign countries of concern, requires disclosures for large foreign funding, and adds screening and penalties for public bodies.
Status / timeline
- Introduced March 13, 2025 (Rep. Bill G. Schuette).
- Committee activity March–May 2025 (Government Operations; Ways & Means; Local Government).
- Passed the Michigan House (May 6 and May 15, 2025; roll call 61–49 on May 6).
- Transmitted to the Senate and referred to Senate committee(s). Companion: SB 2170.
Purpose
- Establish a new statutory framework to limit certain contractual relationships, grants, gifts, and programs involving specified foreign governments or entities (“foreign countries of concern”) and to increase disclosure and screening of foreign-sourced funding and interests affecting state and local “public bodies.”
Key definitions
- “Foreign country of concern”: People’s Republic of China; Russian Federation; Iran; North Korea; Cuba; Syrian Arab Republic; Venezuelan regime of Nicolás Maduro; and entities under significant control of any of those.
- “Public body”: state or local department, board, commission, office, agency, authority, or other unit of government. Excludes public schools and state institutions of higher education (community/junior colleges and state universities).
- “Foreign source,” “gift,” “grant,” “contract,” “interest,” and “designated person” are defined with monetary and control thresholds (notably: interest = ≥5% of entity net worth; $50,000 and $100,000 thresholds described below).
Major provisions
- Prohibitions: A public body may not enter into an agreement with, or accept a grant from, a foreign country of concern if the agreement/grant (a) constrains the public body’s freedom to contract; (b) allows program values in Michigan to be directed/controlled by the foreign country of concern; or (c) promotes an agenda detrimental to U.S. safety or security. Public bodies also may not accept value conditioned on promoting the language or culture of a foreign country of concern.
- Cultural exchanges: Before executing a cultural exchange with a foreign country of concern, the public body must share the agreement’s substance with an appropriate federal agency. If that federal agency determines the agreement promotes a detrimental agenda, the public body may not proceed.
- Disclosures: Public bodies receiving gifts/grants ≥ $50,000 from a foreign source must file a disclosure with the Department of Insurance and Financial Services (DIFS) within 30 days (date, value, source name, country). “Designated persons” applying for grants/contracts ≥ $100,000 must disclose foreign-related interests (and file a copy with DIFS no earlier than one year before application). Disclosures are not confidential and are FOIA-accessible. DIFS must publish disclosures online.
- Screening: The Department of Technology, Management, and Budget (DTMB) must, at least every five years, screen awardees of grants/contracts ≥ $100,000 (over prior five years) through a federal agency that tracks sanctions/embargoes. Flagged persons must comply with disclosure requirements until restrictions expire.
- Enforcement & remedies: DIFS investigates referred or sworn complaints and may request records (30-day production). Civil fines: $5,000 for a first violation; $10,000 for subsequent violations. A third violation makes the person ineligible for public-body contracts unless DTMB grants relief. Violations may be prosecuted by the county prosecutor or the attorney general. DIFS and DTMB may adopt rules to implement the act.
Who is affected
- State and local public bodies (except public schools and state higher education institutions), contractors and grant applicants, individuals or entities with specified foreign ties, and foreign governments/entities identified as countries of concern. Also affects DIFS and DTMB administrative workload and federal agencies consulted on cultural exchanges/screenings.
Potential impacts
- Increases transparency of foreign funding to public bodies and places screening/filing burdens on recipients, applicants, and DIFS/DTMB.
- May restrict certain foreign-funded programs, cultural exchanges, or contracts involving the listed countries or controlled entities; could deter providers with recent or substantial foreign ties from seeking public contracts or grants.
- Enforcement includes monetary fines and temporary/ongoing contracting ineligibility for repeat violators.
Compiled from official sources — confirm details with the bill’s official record.
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