Oklahoma passes contract ban for firearm industry discrimination

Oklahoma Legislature

An Oklahoma bill to ban state and local government contracts with companies that "discriminate" against the firearm industry was sent to Gov. Kevin Stitt on Tuesday.

Senate Bill 500 won final passage with Monday's 73-16 House vote, which followed a 38-8 Senate vote last month. Similar bills failed to advance in the Senate in previous years.

"I told everybody this time that (the bill) needed to start in the Senate and come over and (the Senate) actually sent us a good, clean bill that we can go forward with on the House side," House sponsor State Rep. Kevin West told the chamber's government oversight committee earlier this month.

The bill addresses Second Amendment rights and the state should not contract with companies that "purposefully" discriminate against the firearm industry, according to West. 

The measure, which applies to contracts worth $100,000 or more, including those for bond underwriting, requires written verification from companies that they do not have "a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association."

A 2022 Oklahoma law prohibiting contracts with fossil fuel industry "boycotters" landed Barclays, Bank of America, JP Morgan, and Wells Fargo on state Treasurer Todd Russ' blacklist, making them unable to underwrite governmental bonds in the state. A constitutional challenge to the law brought by a state pension recipient led to a permanent injunction blocking its enforcement in July. The state has filed an appeal with the Oklahoma Supreme Court.

Unlike that law, SB 500 does not extend the contract ban to investment services for pension and other funds. 

West told the House committee that a 2021 Texas law banning contracts on the basis of firearm industry discrimination has resulted in "zero impact" to budgets. 

"What has happened is it has opened the door to some of the smaller in-state banks who didn't think that they even had an opportunity to bid on some of these bond issues or on different things," he said.

In Texas, which also enacted a contract ban on fossil fuel industry "boycotters," Barclays, as well as UBS and Citigroup, which have exited the municipal bond business, were shut out from underwriting muni bonds. BofA and JP Morgan are currently under a Texas attorney general review for their firearm policies and practices.

Studies on the impact of both states' laws pointed to higher borrowing costs.