Indiana bill would ban state contracts with foreign adversaries, give AG’s office more oversight

New legislation under consideration seeks to limit the state from making deals and contracting with businesses located in certain countries as part of an ongoing effort to curtail foreign adversarial investments within Indiana.

House Bill 1032, authored by Rep. Craig Haggard, R-Mooresville, would double down on restrictions already in effect for investors located in China, Cuba, Iran, North Korea, Russia and Venezuela — all countries currently labeled as foreign adversaries in state and federal code.

That list could grow or change as political climates evolve. Indiana law permits the governor to add to that list any country deemed to be “a threat to critical infrastructure.”

Republican state lawmakers spearheaded related measures during the last three legislative sessions that outlawed investors in foreign adversarial nations from acquiring or leasing property in Indiana; banned public universities from using state dollars to “engage” or contract with “sources” located in foreign adversaries; prohibited foreign business entities from acquiring agricultural land in the state; barred cities and towns from certain sister-city agreements and other partnerships; and mandated state pension funds to divest from China-related holdings.

Haggard’s proposal beefs up and “closes loopholes” in several of those existing laws, in addition to increasing civil fines and penalties for violations. The bill was heard for the first time by the House Judiciary Committee on Monday, but a vote to advance the bill to the full chamber is not expected until next week.

The representative said his aim is to reduce the influence of countries potentially posing a threat to the United States and Indiana.

“We do not want the people on the foreign adversary list to be involved with contracts and services,” Haggard said.

“I can say from serving in the military with former enemies, former Soviet folks, is that it’s actually not the people — it’s those heads of state. And unfortunately, when people come specifically from China, they’re required to have discussions with their folks before they come over here,” he continued. “These may not be direct agents at the time, but (heads of state) will say, ‘If we need something … we will ask you. And if you don’t do something, we’re going to do something bad to your family that remains.’ This isn’t conjecture. It’s not hyperbole. That’s a real fact. Is what goes on. And so I don’t want to look at any of these people as bad folks, but it’s just the reality of life.”

A similar proposal by Sen. Mike Bohacek, R-Michiana Shores, would require the governor to terminate economic development deals with companies or firms based in an adversary country, and prohibit the Indiana Economic Development Corp. (IEDC) from establishing international offices in those countries. Senate Bill 20 has yet to be placed on a hearing calendar.

A restriction overhaul

As proposed, Haggard’s bill would prevent the state from signing agreements with companies that are majority-controlled by citizens or residents of adversary nations or are headquartered within one. The proposal does not include people who are dual citizens between the U.S. and a flagged country, however.

It would additionally require individuals and business entities from a foreign adversary to divest from any Indiana “entity” — including corporations, nonprofits, limited liability companies, and partnerships — by Jan. 1, 2026.

Another section would strike current Indiana law that allows a company from a foreign adversary to enter into a critical infrastructure agreement with Indiana as long as the company doesn’t have access or control over that infrastructure system. Instead, language in the bill creates a blanket prohibition, banning all such companies from entering into critical infrastructure agreements.

Provisions in the 35-page bill would further take the state attorney general’s office with implementing and overseeing a “foreign agent registry.” Specifically, the bill mandates any “agents” of a “foreign principal” to register with the state.

The legislation defines “agent” as a person, business entity, or government who is an employee, representative, servant, a person engaging in political activities, a person who represents the interests of the foreign principal, or a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized by a foreign principal.

A “foreign principal” includes those affiliated with governments, associations, political parties and businesses in several different “countries of concern”: Burma, China, Cuba, Eritrea, Iran, North Korea, Nicaragua, Pakistan, Russia, Saudi Arabia, Tajikistan and Turkmenistan.

Agents of those nations must provide a lengthy list of information, including their name, business and residential address, nationality, a complete list of employees, and a statement about the character of the agent’s business or activities.

Anyone who has acted as an agent at any time since Jan. 1, 2015, would have to complete retroactive registration with the attorney general by Dec. 31 of this year, according to the bill.

“What we really don’t have now is the ability, or the infrastructure in place, the foundation in place, to have these folks register, have people monitored,” Haggard said. “A majority of times this may come to light is when you have constituents — people, whoever — that say, ‘Hey, we think there’s an issue here.’ And so this gives that investigative authority in the foundation, in the infrastructure, within the attorney general’s office, to do that.”

So far, no other state has proposed a similar provision that requires agents of a foreign principal to register with a state agency in an effort to monitor foreign activities within their state, according to the National Agricultural Law Center.

AG’s office tasked with new registry

Erin Tuttle, legislative and policy director for the Indiana Attorney General’s office, explained that foreign agents would additionally be required to disclose themselves as such when interacting with state agencies or public officials; include a disclaimer that they are acting on behalf of a foreign principle on “informational materials” that are disseminated in Indiana; and make “periodic disclosures” to the attorney general’s office about “their relationship with, and the activities taken on behalf of,” a foreign principal.

“Importantly, House Bill 1030 does not prohibit a foreign agent from taking any action that is otherwise legal under the law,” Tuttle said. “It doesn’t limit freedom of expression. It does not restrict the publishing of materials or viewpoints, or prevent an agent from engaging in political activities. It simply requires that they register, that they submit documentations of activities conducted on behalf of the foreign principle, and disclose that they are a foreign agent on materials they disseminate, and when they’re interacting with public officials.”

Haggard’s bill would allow the attorney general’s office to investigate and issue subpoenas if the office “is (led) to believe” there’s been a violation. Potential penalties listed in the bill include injunctions, repayment of gains, a civil penalty of up to $100,000 and other damages.

A legislative fiscal analysis estimates the cost for two attorneys and an investigator — staffed within the attorney general’s office – along with expenses for the registry database to be created and maintained will require roughly $563,000 in state funds in fiscal year 2026, and another $418,000 in the following year.

Haggard maintained the costs are largely upfront, though. Because the registry unit in the attorney general’s office is intended to be “self-funding” — using civil collections to pay for staff and operations — future annual appropriations would be lower, he said.

Other staff from the attorney general’s office reiterated that goal of the foreign agent registry and other investigatory actions that would be carried out by the office are not intended to duplicate existing efforts at the state and federal levels, but rather seek to “streamline” reporting and enforcement.

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.