SB261ENGROSSED
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83V3H2-2
By Senators Roberts, Orr, Allen, Livingston, Stutts, Shelnutt,
Sessions
RFD: Fiscal Responsibility and Economic Development
First Read: 27-Apr-23
2023 Regular Session
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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 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,
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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
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,
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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
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
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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
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
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(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 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,
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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.
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.
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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.
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Senate
Read for the first time and referred
to the Senate committee on Fiscal
Responsibility and Economic
Development
................27-Apr-23
Read for the second time and placed
on the calendar:
0 amendments
................11-May-23
Read for the third time and passed
as amended
Yeas 27
Nays 8
Abstains 0
................18-May-23
Patrick Harris,
Secretary.
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