The proposed bill, known as the "local government contracting act," aims to prohibit units of local government from awarding, extending, or renewing certain procurement contracts with entities deemed as "controlled entities." A "controlled entity" is defined as an organization that is owned or significantly influenced by a foreign country of concern, which includes nations such as China, Russia, Iran, and others. The bill mandates that any applicant for a procurement contract that grants access to personal identifying information must provide an affidavit confirming they are not a controlled entity. Additionally, starting July 1, 2026, local governments are prohibited from extending or renewing contracts with controlled entities under similar conditions.

Furthermore, the bill stipulates that procurement contracts must include clauses preventing the use of information or communication technology from entities identified as posing national security risks. Local governments are also required to establish security procedures to protect local information from exploitation by foreign countries of concern. Violations of these provisions could result in civil fines and ineligibility for future contracts for up to five years. The act will only take effect if House Bill No. 4236 is also enacted into law.