Government Procurement and the Energy Implications of Texas Senate Bill 19: Navigating State Regulation of Corporate Firearm Policies – Government, Public Sector


United States: Government Procurement and the Energy Implications of Texas Senate Bill 19: Navigating State Regulations on Company Firearms Policies

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Companies with ESG policies – including financial parties investing or lending money for renewable energy projects – should assess the impact of Texas Senate Bill 19 on their public procurement opportunities, and should expect and prepare for increased state regulation of corporate firearms policies in the future.

As of September 1, 2021, Texas Senate Bill 19 prohibits government entities from entering into contracts with companies that have policies that restrict doing business with the firearms industry. The bill specifically targets banks and other financial institutions who have at least ten employees and are looking for government contracts of at least $ 100,000. Under the bill, these institutions are required to provide written evidence that they do not have any practices, policies, guidelines or guidelines that “discriminate” against any firearms entity or trade association. .

In 2018, several banks announced policies placing restrictions on the gun industry after a shooting at Marjory Stoneman Douglas High School in Parkland, Florida. For example, Citigroup announced that it would ban retailer customers of the bank from offering large caliber inventory or selling firearms to people who have not passed a background check or who have less. twenty-one years old. That same year, Bank of America announced that it would stop making new loans to companies that make military-style rifles for civilian use. These policies will likely trigger enforcement of the bill, and both institutions risk losing government procurement opportunities in Texas.

Given the scope of Texas Senate Bill 19, companies with environmental, social, and governance (“ESG”) policies should be especially mindful of the implications of the new government procurement legislation. ESG policies often limit participation in the firearms industry and would “discriminate” against specialized firearms entities, so the application of Texas Senate Bill 19 would be likely. The bill defines “business” as “[A] for-profit organization, association, corporation, partnership, joint venture, limited partnership, limited liability company or limited liability company, including a wholly owned subsidiary, majority owned subsidiary, parent company or an affiliate of these entities or associations that exist for profit “.

So while financial institutions with ESG policies – including some entities with ESG policies that serve as tax equity investors and construction lenders on wind, solar and other renewable energy deals – are likely covered by Texas Senate Bill 19, utility buyers and Electric Reliability Council of Texas (ERCOT) entities in which they invest will not be subject to the same restrictions as long as such investments place these entities under the definition of a “business” provided for in the bill. Either way, Texas Senate Bill 19 is one of many approaches to regulating ESG policies at the state level, and companies, including the entities they contract with. , should expect similar measures in the future and be prepared.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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