The Alabama House Wednesday passed a bill that would prevent state entities from contracting with companies that refuse to do business with fossil fuel producers, firearm manufacturers, companies that do not “facilitate” access to abortion or gender-affirming care and other entities.

SB 261, sponsored by Sen. Dan Roberts, R-Mountain Brook, passed on a 76-27 vote. It goes to Gov. Kay Ivey.

“This bill requires companies that contract with the state to certify that they don’t boycott other companies based on any purpose other than ordinary business purposes,” said Rep. Chip Brown, R-Hollinger’s Island, who carried the bill in the House.

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Brown also said that the bill would prohibit businesses from engaging in boycotts of investment strategies.

The legislation is an anti-environmental, social and governance (ESG) bill, one of several pushed by Republican legislators around the nation. ESG aims to encourage companies to consider sustainability in investment decisions, particularly around climate change.

Under Roberts’ bill, companies entering contracts with public entities must verify that they do not engage in “economic boycotts.” The bill defines “economic boycott” as “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 violatingcontrolling law or regulation” engage in business protected under the bill.

There are various activities outlined in the bill that would be protected, such as a company’s involvement in fossil fuel-based energy, timber, mining, or agriculture. It also includes companies engaged in the manufacturing, distribution, or lawful use of firearms, as well as those that fail to meet environmental standards or commit to reducing greenhouse gas emissions.

Additionally, the bill includes companies that do not meet corporate employment or board composition criteria, as well as those that do not facilitate access to abortion or sex or gender change-related procedures.

Critics argue that such legislation could stifle freedom of expression and limit the ability of individuals and organizations to take a stand on social, political, and environmental issues through boycotts or divestment campaigns.

The legislation prevents governmental entities from entering contracts worth more than $15,000 with companies with more than 10 employees engaged in “economic boycotts.”

The proposed legislation seeks to establish clear parameters for economic boycotts, highlighting specific activities and positions that could trigger such actions against companies.

Rep. Neil Rafferty, D-Birmingham, said after the bill’s passage on Wednesday that the bill is anti-diversity, anti-free speech and anti-free market.

“This is just government interfering into the private affairs of a business,” he said.

Rafferty said that it’s good practice for businesses to have multiple viewpoints, which allows businesses to have more comprehensive human resources and services. He said that the bill could also stifle business development, especially “homegrown business expansion,” if businesses can’t tap into “new and untouched markets.”

“One thing that we keep talking about as a state – it doesn’t matter what party you are in – is about business recruitment, trying to get more and more businesses and trying to get Alabama to work,” Rafferty said. “But what we’re talking about is also blocking those businesses’ ability to be able to make decisions.”