Committee votes to recommend 'do not pass' on bill barring contracts with companies that boycott energy

BISMARCK — The House Industry, Business and Labor Committee voted to recommend a do‑not‑pass on House Bill 1309, legislation that would bar state and local governments from contracting with companies that the bill deems to be boycotting the energy, production agriculture or firearms industries.

Representative Matt Heilman, R‑Bismarck, presented the bill as an effort to ensure state contracts align with North Dakota’s energy and agricultural industries. “The goal of this bill is to have contracts with companies that have aligned values with North Dakota and not trying to boycott key industries that are vital here within the state,” Representative Matt Heilman said.

Officials from the Office of Management and Budget urged defeat. Sherry Nees, OMB’s shared services division director and chief procurement officer, told the committee the bill would meaningfully complicate procurement and contracting, affect thousands of contracts and raise constitutional and liability risks. “This bill would further complicate the procurement and contracting process and impact thousands of state contracts annually,” Nees said. She warned the measure could create First Amendment issues and expose the state and political subdivisions to civil liability under federal statutes.

Jody Smith, interim executive director of the Retirement and Investment Office, said the bill conflicted with the Bank of North Dakota study and recommended against “blacklists” for investments or contracts. Smith told members the state’s investment experts and stakeholders had advised against creating lists that declare companies ineligible for investment or contracting.

The committee moved for a do‑not‑pass recommendation. Representative Shower offered the motion and Representative Grinberg seconded. A roll call was taken and the motion carried by the committee on a recorded vote; the clerk reported the tally as "10‑0‑3." Committee members said the measure was well‑intentioned but risked significant procurement, legal and investment consequences for the state and its political subdivisions.

Representative Christie, who participated in previous industry discussions, cautioned that major technology companies evaluating North Dakota for data centers might not be driven solely by “green‑energy” policies and that the state should weigh how the measure would affect recruitment.

With the committee recommendation to report the bill as do‑not‑pass, the measure will not advance from the committee under a favorable report without further action by the sponsor or the full chamber.