Republican state leaders routinely describe Texas as something of a paradise for private enterprise, touting its hands-off regulatory climate and entrepreneurial spirit.
But a number of bills approved by the GOP-controlled state Legislature this year and signed into law by Gov. Greg Abbott seemingly fly in the face of that free-market ethos.
The measures are aimed at curbing the autonomy of individual business owners or punishing their behavior — in favor of government-sanctioned action — when it comes to a range of high-profile social issues, such as guns, climate change, proof of vaccinations and the playing of the national anthem.
The new laws include:
- Senate Bills 13 and 19, which take effect Sept. 1 and block businesses with 10 or more employees from obtaining government contracts worth $100,000 or more in Texas if they boycott the fossil fuel sector or the gun industry, respectively. SB 13 also will prevent state funds from being invested with financial companies that boycott the fossil fuel sector.
- SB 968, legislation that will deny state contracts to businesses of all sizes, and possibly result in loss of operating licenses, if they require customers to show proof of coronavirus vaccinations. The new law took effect last month.
- SB 20, a new law that takes effect Sept. 1 and bans hotels with more than 10 rooms from prohibiting guests from storing ammunition and firearms — even high-powered assault-style rifles — in their rooms.
- SB 4, which will require professional sports teams in Texas to play the national anthem at the start of home games or risk losing subsidies and other funding from state and local governments. SB 4 takes effect Sept. 1.
Backers of the measures — all of which were introduced by Republicans but, in several cases, received substantial support from Democrats — have heralded them as needed protections for important Texas industries, traditional values or individual rights.
Representatives of some business groups don’t necessarily see it that way, however.
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The Texas Association of Manufacturers, a statewide lobbying organization, opposed SB 968, which bans so-called “vaccine passports,” preventing private companies from requiring vaccine proof from customers.
“The ability for businesses to implement public health policies pertinent to a safer and healthier work environment should be encouraged and protected,” said Tony Bennett, president of the manufacturers’ group.
“As we continue to navigate the COVID-19 pandemic, we are reminded of how quickly our global economy can be impacted due to illness — resulting in slowed manufacturing, the inability to get goods to consumers, job losses and lost tax revenue,” Bennett said in a written statement.
Vijay Patel, a hotel operator and a board member of the Austin Hotel & Lodging Association, said he also is disappointed that lawmakers opted to block businesses from requiring customers to disclose whether or not they are vaccinated. In addition, Patel said he’s opposed to allowing guns in hotel rooms.
“If we had a choice, we would lean toward safety of our guests first,” he said. “We would love to have guns stay outside of the building. But we have to abide by these legislative actions.”
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Businesses might ‘take the hit’
To be sure, advocates for Texas businesses scored significant victories during the recently concluded legislative session, such as approval of a wide-ranging measure —SB 6 — that provides them with retroactive liability protection from lawsuits related to COVID-19 exposure, provided “good faith” efforts were taken to comply with government safety standards.
But Jim Henson, a University of Texas political scientist, said the willingness of Republicans lawmakers — who control both chambers of the Legislature and hold the governor’s office — to put in place new business regulations when contentious social issues were involved is the latest indication that the interests of private enterprise no longer are paramount in the traditionally pro-business GOP.
That status now belongs to the concerns of ideologically driven social conservatives, he said, who vote in large numbers in Republican primaries.
“The current reality seems to me to be that if you want to impose some kind of cost or burden on businesses in the pursuit of one of these hot-button issues, the businesses are probably going to have to take the hit as far as the governing (Republican) party is concerned right now,” said Henson, director of the Texas Politics Project at UT.
The dynamic is likely to last at least through next year’s primaries, he said.
In addition to enactment of the new business regulations, the preeminence of the GOP’s most socially conservative voters was evidenced during the recent legislative session by the dominance of many high-profile social issues, Henson said, including restrictions on abortion and the ability of transgender student athletes to compete in sports. Some other observers have described the session as the most conservative on record.
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GOP lawmakers “are not really worried about the general election as of right now, they are worried about primaries,” Henson said. “And when it comes to the Republican primaries, it really is the ideologically interested groups that are really mobilized in (typically) low-turnout elections.”
Still, not all Republicans voted in lockstep for the business-related bills.
State Sen. Robert Nichols said he opposed SB 20 — the measure mandating that hotels allow guests to store guns in their rooms — because he views it as an infringement on the rights of private property owners.
“If a hotel has adopted a policy on firearms that you don’t agree with, the simple solution is to stay in a different hotel,” Nichols, R-Jacksonville, said in a statement he submitted to the Senate’s official journal. “Just as there are dog-friendly hotels and hotels that don’t allow dogs, there should be gun-friendly hotels and hotels that don’t allow guns.”
A spokeswoman for Abbott — who already has an announced primary challenger — didn’t respond to a request for comment regarding the bills, nor did a spokeswoman for Lt. Gov. Dan Patrick, who controls the flow of legislation in the Senate.
But they and other supporters of the new business regulations have framed the measures as either needed protections for individual liberties or good for the Texas economy. In signing SB 968, for instance, Abbott wrote on Twitter that “Texas is open 100% without any restrictions or limitations or requirements” as a result of its ban on vaccine passports.
State Sen. Lois Kolkhorst, who sponsored SB 968, said in a written statement that it’s “a great example of striking a balance between our public health priorities, civil liberties and economic freedoms.”
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The new law protects private medical information from “intrusive governmental and business-led mandates” but still allows for health screenings, such as temperature checks, said Kolkhorst, R-Brenham.
For his part, Patrick previously named most of the new business regulations — including SBs 4, 13, 19 and 20 — among his priorities at the start of this year’s legislative session.
SB 19 “ensures that the state of Texas will no longer do business with companies that discriminate against Second Amendment businesses,” Patrick said in April when the bill targeting gun boycotts by the private sector cleared the Senate. “I stand with the majority of Texans who overwhelmingly support the right to bear arms and I am firmly committed to ensuring that we protect this important constitutional right.”
He made similar comments when SB 13, the bill involving the fossil fuel sector, won approval. “If Wall Street turns their back on Texas and our thriving oil and gas industry, then Texas will not do business with Wall Street,” he said at the time.
Edgar Saldivar, senior staff attorney for the ACLU of Texas, said both SB 13 and 19 “fly completely in the face” of constitutional protections for free speech.
“It’s the government trying to impose an ideological litmus test or loyalty oath as a condition for hiring or contracting with the state,” Saldivar said. “The government’s job is not to be an arbiter on public debates, or a referee or umpire — that’s why we have free speech rights.”
The ACLU hasn’t determined if it will contest the new laws yet because they haven’t taken effect, he said.
But if the state does end up having to defend them in court, it “will be a waste of taxpayer money,” Saldivar said. “The actions and the push for these kinds of laws really just make no sense at all and are merely distractions to throw red meat to the (conservative) base.”
Potential long-term impact
It remains to be seen if the flurry of new regulations on private enterprise approved during the recent legislative session will take any of the shine off of the state’s sterling reputation nationally as a top location for business.
Just three weeks ago, Texas won a “gold shovel award” from Area Development magazine for the amount of business investment it attracted in 2020, the ninth year in a row for the state to win such an award.
Henson said he doesn’t think “a critical mass” has been reached in which a more activist regulatory posture among Republicans might tarnish perceptions of the Texas business climate — at least not yet.
“There was a pretty wide swing to the right (during this year’s legislative session) that in some cases clearly came at the expense of some business constituents,” he said. “But I would say it’s still approaching yellow-flag level rather than red-flag level.”
Patel, of the Austin Hotel & Lodging Association, said Texas remains an easier place to do business than many other parts of the country, even though he thinks SBs 20 and 968 will complicate his job.
“It is not in our favor in these two situations,” Patel said. But “I still believe our state is pro-business.”