SB 261 — Relating to public contracts; to prohibit governmental entities from entering into certain contracts with companies that boycott businesses because the business engages in certain sectors or does not meet certain environmental or corporate governance standards or does not facilitate certain activities; to provide that no company in the state shall be required by a governmental entity, nor penalized by a governmental entity for declining to engage in economic boycotts or other actions that further social, political, or ideological interests; to require the Attorney General to take actions to prevent federal laws or actions from penalizing, inflicting harm on, limiting commercial relations with, or changing or limiting the activities of companies or residents of the state based on the furtherance of economic boycott criteria; and to authorize the Attorney General to investigate and enforce this act; and to provide definitions.

SB261 ENGROSSEDENROLLED 83V3H2-283V3H2-3 By Senators Roberts, Orr, Allen, Livingston, Stutts, Shelnutt, Sessions RFD:

27-Apr-23 2023 Regular Session Page 0 SB261 EngrossedEnrolled 2Enrolled, 4An AAct, BILL3 TO BE ENTITLED AN ACT 9 Relating to public contracts;

A for-profit entity, organization, Page 1 SB261 Engrossed association, corporation, partnership, joint venture, limited partnership, limited liability partnership, or limited liability company.

Without an ordinary business Page 1 SB261 Enrolled purpose, refusing to deal with, terminating business activities with, or otherwise taking any commercial action that is intended to penalize or inflict economic harm on a company solely because the company, without violating controlling law or regulation, does any of the following:

A state agency, department, Page 2 SB261 Engrossed regulatory body, board, bureau, or commission, or any county, municipality, incorporated or unincorporated local government, or other political subdivision of the state.

Includes a purpose that is related to business operations and excludes a purpose that Page 2 SB261 Enrolled is solely related to furthering social, political, or ideological interests.

(c) Subsection (b) does not apply to a contract related to the issuance, incurrence, or management of debt obligations, to the deposit, custody, management, borrowing, or investment of funds, or to the procurement of insurance or other financial products, or financial advisory services, or a Page 3 SB261 Engrossed contract that would prevent the governmental entity from obtaining the supplies or services to be provided in an economically practicable manner.

(d) If a governmental entity is unable to comply with this section without significantly increasing costs or Page 3 SB261 Enrolled limiting the quality of options or services available, or both, the governmental entity may waive the requirements upon a finding, posted on the governmental entity's publicly available website that:

(1) The governmental entity has made reasonable and 95 good faith efforts to obtain services meeting the requirements of this section and has included the requirements in the governmental entity's minimum selection criteria.

(2) Based on objective information available to the governmental entity, the cost appears significantly higher 95 than the services available to similarly oriented governmental entities not subject to similar requirements, or the quality of services or options appears significantly lower than the quality of services available to similarly oriented governmental entities not subject to similar requirements, or both.

(b) Any party violating a commitment made under subsection (b) of Section 2 or otherwise violating subsection Page 4 SB261 Engrossed (a) of this section shall have caused harm to the governmental entity, including by interfering with the governmental entity's sovereign interest in administering its programs and with the governmental entity's commercial relationships.

(a) No company in this state shall be Page 4 SB261 Enrolled required by a governmental entity to engage in economic boycotts, to establish or implement policies, procedures, guidelines, rules, reports, products, services, notices, disclosures, or rates or pricing;

or will not initiate other corporate or business practices that further social, Page 5 SB261 Engrossed political, or ideological interests including, but not limited to, economic boycott criteria or other similarly oriented rating.

The Attorney General shall seek to prohibit the adoption of federal laws, rules, regulations, bulletins, Page 5 SB261 Enrolled executive orders, or other federal actions that may penalize, inflict economic harm on, limit commercial relations with, or change or limit the activities of a company in the state or a resident of the state based on the furtherance of economic boycott criteria or other similarly oriented rating.

Page 6 SB261 Engrossed Section 8.

Page 76 SB261 EngrossedEnrolled Senate________________________________________________ ReadPresident forand thePresiding firstOfficer timeof andthe referredSenate ................27-Apr-23________________________________________________ toSpeaker of the SenateHouse committeeof onRepresentatives FiscalSB261 ResponsibilitySenate and18-May-23 EconomicI Developmenthereby Readcertify forthat the secondwithin timeAct andoriginated placedin ................11-May-23and onpassed the calendar:Senate, as amended.

amendments Read for the third time and passed ................18-May-23 as amended Yeas 27 Nays 8 Abstains 0 Patrick Harris, Secretary.

PageHouse 8of Representatives Passed:

31-May-23 By:

Senator Roberts Page 7