Attorney General Ken Paxton Issues Enforcement Guidance For State Laws Prohibiting Public Contracts with Companies Unlawfully Maintaining "ESG" Policies

AUSTIN – Texas Attorney General Ken Paxton issued an advisory letter providing updates and guidance on the enforcement of laws passed by the Texas Legislature restricting government entities from granting large contracts to companies that boycott energy companies, discriminate against firearm entities or associations, or boycott Israel. No Texas governmental entity may enter into a contract with such boycotters or discriminators for the purchase of goods or services with a value of $100,000 or more.

Moreover, companies that contract with governmental entities must verify in writing that they do not and will not during the term of the contract boycott energy companies; have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association; or boycott Israel.

The letter advises that it is the responsibility of all governmental entities to exercise due diligence to uphold both the letter and spirit of state law, including exercising their own due diligence and monitoring compliance with relevant government code chapters upon contract formation and any renewal or extension of the contract's term. Further, the Public Finance Division of the Office of the Attorney General— which is vested with authority to review and approve the issuance of municipal bonds in Texas—has taken proactive measures to ensure that companies underwriting municipal bonds in this State comply with the law.

"The Office of the Attorney General will continue to vigorously enforce our laws that prevent taxpayer funds from going to companies whose 'ESG' policies harm Texans or key Texas industries," said Attorney General Paxton. "Companies who discriminate against firearms businesses and organizations, the oil and gas industry, or the nation of Israel will not enjoy the opportunity and privilege of winning public contracts in Texas."

To read the advisory letter, click here.

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