Text of AL SB 261 (2023)

SB261 INTRODUCED Page 0 83V3H2-1 By Senators Roberts, Orr, Allen, Livingston, Stutts, Shelnutt, Sessions RFD: Fiscal Responsibility and Economic Development First Read: 27-Apr-23 2023 Regular Session 1 2 3 4 5 6 7 83V3H2-1 04/25/2023 PMG (L)tgw 2023-1629 Page 1 SYNOPSIS: This bill would prohibit a governmental entity from entering into a public contract for goods or services with certain companies or businesses that engage in the economic boycott of businesses in certain sectors and industries; that fail to meet or commit to meet certain environmental standards; that fail to meet or commit to meet certain corporate governance criteria; or that fail to facilitate certain activities. This bill would prohibit any company in the state from being required to engage in economic boycotts or other actions that further social, political, or ideological interests, including economic boycott criteria. This bill would prohibit any company in the state from being penalized for declining to engage in economic boycotts or other actions that further social, political, or ideological interests, including economic boycott criteria. This bill would require the Attorney General to seek to prohibit the adoption of federal laws or actions that may penalize, inflict harm on, limit commercial relations with, or change or limit the activities of companies or residents of the state based 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SB261 INTRODUCED SB261 INTRODUCED Page 2 on the furtherance of economic boycott criteria. This bill would also authorize the Attorney General to investigate violations of and enforce this act. A BILL TO BE ENTITLED AN ACT 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, nor penalized 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. BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: Section 1. As used in this act, the following terms have the following meanings: 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 SB261 INTRODUCED SB261 INTRODUCED Page 3 (1) COMPANY. A for-profit entity, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, or limited liability company, including a wholly owned subsidiary, majority-owned subsidiary, parent company, or affiliate of those entities or business associations. The term does not include sole proprietorships. (2) ECONOMIC BOYCOTT. Without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any commercial action that is intended to penalize, inflict economic harm on, limit commercial relations with, or change or limit the activities of a company because the company, without violating controlling law, does any of the following: a. Engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy, timber, mining, or agriculture. b. Engages in, facilitates, or supports the manufacture, import, distribution, marketing or advertising, sale, or lawful use of firearms, ammunition, or component parts and accessories of firearms or ammunition. c. Does not meet, is not expected to meet, or does not commit to meet environmental standards or disclosure criteria, in particular to eliminate, reduce, offset, or disclose greenhouse gas emissions. d. Does not meet, is not expected to meet, or does not commit to meet corporate employment or board composition, compensation, or disclosure criteria. 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 SB261 INTRODUCED SB261 INTRODUCED Page 4 e. Does not facilitate, is not expected to facilitate, or does not commit to facilitate access to abortion or sex or gender change surgery, medications, treatment, or therapies. f. Does business with a company described by paragraphs a. through e. (3) GOVERNMENTAL ENTITY. A state agency, department, regulatory body, board, bureau, or commission, or any county, municipality, incorporated or unincorporated local government, or other political subdivision of the state. (4) ORDINARY BUSINESS PURPOSE. Excludes any purpose to further social, political, or ideological interest, including, but not limited to, economic boycott criteria or other similarly oriented rating. A company may reasonably be determined to have taken an action, or considered a factor, with a purpose to further social, political, or ideological interests based upon evidence indicating such a purpose, including, but not limited to: (i) branding, advertising, statements, explanations, reports, letters to clients, communications with portfolio companies, statements of principles, or commitments, or (ii) participation in, affiliation with, or status as a signatory to any coalition, initiative, joint statement of principles, or agreement. Section 2. (a) This section applies only to a contract that meets both of the following: (1) Is between a governmental entity and a company with 10 or more full-time employees. (2) Will pay or may pay a company at least fifteen thousand dollars ($15,000) over the term of the contract 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 SB261 INTRODUCED SB261 INTRODUCED Page 5 wholly or partly from public funds of the governmental entity; provided, however, this subdivision shall apply separately to all companies in a multiple-party contract. (b) Except as provided by subsection (c), a governmental entity may not enter into a contract with a company for goods or services unless the contract contains a written verification from the company that the company does not and will not, during the term of the contract, engage in economic boycotts. (c) Subsection (b) does not apply to a governmental entity that determines the requirements of subsection (b) are inconsistent with the governmental entity's constitutional or statutory duties related to the issuance, incurrence, or management of debt obligations or the deposit, custody, management, borrowing, or investment of funds, or 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 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 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 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 SB261 INTRODUCED SB261 INTRODUCED Page 6 governmental entity, the cost appears significantly higher 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. (3) The governmental entity determines that a waiver is clearly in the best interest of its constituents. Section 3. (a) No party may take action to penalize or threaten to penalize any governmental entity, company, or business for compliance with Section 2. (b) Any party violating a commitment made under subsection (b) of Section 2 or otherwise violating subsection (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. Section 4. (a) No company in this state shall be required to engage in economic boycotts, to establish or implement policies, procedures, guidelines, rules, reports, products, services, notices, disclosures, or rates or pricing; to provide or submit answers to surveys or other information requests or disclosures; to invest in or divest of certain securities, stocks, bonds, bills, partnerships, or other investment arrangements; or to initiate other corporate or business practices that further social, political, or ideological interests including, but not limited to, economic 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 SB261 INTRODUCED SB261 INTRODUCED Page 7 boycott criteria or other similarly oriented rating. (b) No company in this state shall be penalized, have economic harm inflicted on it, have commercial relations limited, or have the activities of the company changed or limited because the company will not engage in economic boycotts; will not establish or implement policies, procedures, guidelines, rules, reports, products, services, notices, disclosures, or rates or pricing; will not provide or submit answers to surveys or other information requests or disclosures; will not invest in or divest of certain securities, stocks, bonds, bills, partnerships, or other investment arrangements; or will not initiate other corporate or business practices that further social, political, or ideological interests including, but not limited to, economic boycott criteria or other similarly oriented rating. Section 5. The Attorney General shall seek to prohibit the adoption of federal laws, rules, regulations, bulletins, 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. Section 6. If any provision of this act or its application to any person or circumstances is held invalid, then the invalidity does not affect other provisions or applications of this act, which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable. 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 SB261 INTRODUCED SB261 INTRODUCED Page 8 Section 7. (a) This act may be enforced by the Attorney General. (b) If the Attorney General has reasonable cause to believe that a person has engaged in, is engaging in, or is about to engage in a violation of this act, he or she may investigate according to the investigative authority provided in Section 8-19-9, Code of Alabama 1975. (c) The Attorney General may use all remedies available at law or in equity to enforce this act. In addition to any other remedies available at law or in equity, a company that serves as a fiduciary and that violates this act or any commitment made under this act shall be obligated to pay damages to the state in an amount equal to three times all monies paid to the company by the governmental entity or plan for the company's services. Section 8. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law. 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214

SB261 ENROLLED Page 0 83V3H2-3 By Senators Roberts, Orr, Allen, Livingston, Stutts, Shelnutt, Sessions RFD: Fiscal Responsibility and Economic Development First Read: 27-Apr-23 2023 Regular Session 1 2 3 4 5 6 SB261 Enrolled SB261 Enrolled Page 1 Enrolled, An Act, 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. BE IT ENACTED BY THE LEGISLATURE OF ALABAMA: Section 1. As used in this act, the following terms have the following meanings: (1) COMPANY. A for-profit entity, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, or limited liability company. The term does not include sole proprietorships. (2) ECONOMIC BOYCOTT. Without an ordinary business 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SB261 Enrolled SB261 Enrolled Page 2 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. Engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy, timber, mining, or agriculture. b. Engages in, facilitates, or supports the manufacture, import, distribution, marketing or advertising, sale, or lawful use of firearms, ammunition, or component parts and accessories of firearms or ammunition. c. Does not meet, is not expected to meet, or does not commit to meet environmental standards or disclosure criteria, in particular to eliminate, reduce, offset, or disclose greenhouse gas emissions. d. Does not meet, is not expected to meet, or does not commit to meet corporate employment or board composition, compensation, or disclosure criteria. e. Does not facilitate, is not expected to facilitate, or does not commit to facilitate access to abortion or sex or gender change surgery, medications, treatment, or therapies. (3) GOVERNMENTAL ENTITY. A state agency, department, regulatory body, board, bureau, or commission, or any county, municipality, incorporated or unincorporated local government, or other political subdivision of the state. (4) ORDINARY BUSINESS PURPOSE. Includes a purpose that is related to business operations and excludes a purpose that 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 SB261 Enrolled SB261 Enrolled Page 3 is solely related to furthering social, political, or ideological interests. Section 2. (a) This section applies only to a contract that meets both of the following: (1) Is between a governmental entity and a company with 10 or more full-time employees. (2) Will pay or may pay a company at least fifteen thousand dollars ($15,000) over the term of the contract wholly or partly from public funds of the governmental entity; provided, however, this subdivision shall apply separately to all companies in a multiple-party contract. (b) Except as provided by subsection (c), a governmental entity may not enter into a contract with a company for goods or services unless the contract contains a written verification from the company that the company, without violating controlling law or regulation, does not and will not, during the term of the contract, engage in economic boycotts. (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 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 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 SB261 Enrolled SB261 Enrolled Page 4 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 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 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. (3) The governmental entity determines that a waiver is clearly in the best interest of the public. Section 3. (a) No party may take action to penalize or threaten to penalize any governmental entity, company, or business for compliance with Section 2. (b) Any party violating a commitment made under subsection (b) of Section 2 or otherwise violating subsection (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. Section 4. (a) No company in this state shall be 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 SB261 Enrolled SB261 Enrolled Page 5 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; to provide or submit answers to surveys or other information requests or disclosures; to invest in or divest of certain securities, stocks, bonds, bills, partnerships, or other investment arrangements; or to initiate other corporate or business practices that further social, political, or ideological interests including, but not limited to, economic boycott criteria or other similarly oriented rating. (b) No company in this state shall be penalized, have economic harm inflicted on it, have commercial relations limited, or have the activities of the company changed or limited by a governmental entity because the company will not engage in economic boycotts; will not establish or implement policies, procedures, guidelines, rules, reports, products, services, notices, disclosures, or rates or pricing; will not provide or submit answers to surveys or other information requests or disclosures; will not invest in or divest of certain securities, stocks, bonds, bills, partnerships, or other investment arrangements; or will not initiate other corporate or business practices that further social, political, or ideological interests including, but not limited to, economic boycott criteria or other similarly oriented rating. Section 5. The Attorney General shall seek to prohibit the adoption of federal laws, rules, regulations, bulletins, 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 SB261 Enrolled SB261 Enrolled Page 6 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. Section 6. If any provision of this act or its application to any person or circumstances is held invalid, then the invalidity does not affect other provisions or applications of this act, which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable. Section 7. (a) This act may be enforced only by the Attorney General. If the Attorney General declines to enforce a violation of Section 4, a company can bring a civil action against the governmental entity to seek injunctive relief only. (b) If the Attorney General has reasonable cause to believe that a person has engaged in or is engaging in a violation of this act, he or she may investigate according to the investigative authority provided in Section 8-19-9, Code of Alabama 1975. (c) The Attorney General may use all remedies available at law or in equity to enforce this act. Section 8. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law, and shall apply only to contracts entered into on or after October 1, 2023. 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 SB261 Enrolled SB261 Enrolled Page 7 ________________________________________________ President and Presiding Officer of the Senate ________________________________________________ Speaker of the House of Representatives SB261 Senate 18-May-23 I hereby certify that the within Act originated in and passed the Senate, as amended. Patrick Harris, Secretary. House of Representatives Passed: 31-May-23 By: Senator Roberts 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196