Michigan's state government sends work overseas or "outsources" functions like processing welfare claims and administering retirement benefits. Most of the work is done in India.

Now, Michigan state Rep. Steve Bieda (search), a Democrat, is proposing to put an end to that.

"I think it could send a clear message that we are very serious about keeping jobs in the United States, that we're willing to make the investment to do that," Bieda said.

Thirty-six states are considering laws that ban state contracts to companies that outsource (search) their products.

But critics argue that by saving local jobs they are costing taxpayers more money.

"I've seen some estimates that would be as high as $80 million that it could cost the state of Michigan to enact such a policy," said Michigan state Rep. Gary Newell (search), a Republican.

The bill is expected to come up for a vote in the next few months. Lawmakers in other states are watching to see if it passes as they craft their own rules.

Go to the video box near the top of this story to watch a report by FOX News' Steve Brown.