Utah Legislature passes expansive anti-‘boycott’ bill

Legislation seeking to end government contracts with companies engaged in “boycotting” an expanded list of industries and business policies passed the Utah House and Senate late Thursday.

and Citigroup were banned from underwriting state and local government bonds in that state due to their policies related to climate change or gun and ammunition sales. 

Republican State Rep. Rex Shipp, the Utah bill’s sponsor, said environmental, social, and governance use has become a big problem that threatens industries like fossil fuel, which is an important part of Utah’s economy. 

“It has turned into something that is undeniably embedded in the major banking corporations in the United States,” he said on the House floor. 

Democratic State Rep. Joel Briscoe brought up a study last year that found the Texas laws could increase borrowing costs for issuers in that state as a result of less competition among underwriters. He also expressed concern about “creating two Americas.” 

“These are the good guys and these are the bad guys and I’m not sure in the end it’s good for all of us and I’m not sure in the end it’s good for the U.S. consumer,” he said.  

The bill includes an exception if there is no “economically practicable alternative” for a governmental entity to acquire a particular good or service, or to meet its legal duties to issue, incur, or manage debt obligations or borrow or invest funds.

Utah State Treasurer Marlo Oaks, a vocal ESG critic, testified last month on behalf of the bill, telling a Senate committee the legislation is aimed at institutions that are weaponizing their business. 

This year, several states are weighing anti-boycott bills, with some largely mirroring model legislation the conservative Heritage Foundation posted on its website, advising states they “can enact legislation that generally requires companies that contract with the state to certify that they do not boycott or discriminate against companies to achieve woke political objectives.”

The U.S. Supreme Court may have opened the door for these measures to proliferate when it declined last month to take up a challenge to an Arkansas law involving boycotts of Israel.