Michigan Senate Bill SB0678

Michigan 2025-2026 Regular Session

• Introduced: 10/30/25
• Refer: 10/30/25

Caption

Economic development: other; divestment from terror act; amend to reflect elimination of the Michigan strategic fund. Amends sec. 2 of 2008 PA 234 (MCL 129.292). TIE BAR WITH: SB 0631'25

Summary

Senate Bill 678 amends Michigan’s “Divestment from terror act” by updating the statute’s definitions section. The bill keeps the core framework that identifies “scrutinized companies” doing business with a “state sponsor of terror,” and it preserves the requirement that certain public fiduciaries avoid or divest from those companies. It also retains the existing exemptions for humanitarian or social development activities and for companies that are already covered by federal sanctions exceptions or licenses. A notable change in the caption and text is the reference to the elimination of the Michigan Strategic Fund, which suggests the bill is partly a technical update to align the divestment law with changes in state economic-development governance. The bill is tie-barred to Senate Bill 631, meaning it would not take effect unless that related bill is enacted. In practical terms, the measure would continue to govern how specified state retirement systems and other state-managed funds identify and respond to companies with business ties to countries designated by the U.S. Secretary of State as state sponsors of terrorism.

Impact

The bill would amend section 2 of 2008 PA 234, changing statutory definitions that guide divestment and investment screening by Michigan fiduciaries, including the state treasurer, retirement boards, community college trustees, the Michigan education trust, and other state-managed funds. It would affect how those entities classify active and inactive business operations, scrutinized companies, social development companies, and substantial action, while preserving the divestment framework for investments connected to state sponsors of terror. The measure appears to update the law to reflect the removal of the Michigan Strategic Fund from the list of fiduciaries or related entities, and it would only take effect if the companion tie-bar bill becomes law.

Sentiment

There is limited recorded committee or floor discussion in the provided materials, and no vote history is included, so the overall sentiment must be inferred from the bill text and caption. The bill appears largely administrative and policy-consistent with existing anti-terror divestment law, suggesting a generally neutral to supportive posture focused on statutory cleanup and alignment with current state structure. The absence of recorded opposition or amendments in the provided context indicates no documented controversy in the available materials.

Contention

The main substantive issue is the continued use of state investment restrictions tied to foreign policy designations, which can raise questions about fiduciary duties, investment flexibility, and the scope of divestment obligations. Another possible point of contention is the bill’s tie-bar to SB 631, meaning its effect depends on passage of a separate measure, which can complicate enactment. The text also preserves exemptions for humanitarian and social development companies, which may be important to stakeholders concerned about unintended impacts on aid, education, medicine, and other civilian activities in sanctioned countries.