A Texas law requiring firms that do business with state entities—including state agencies, counties, municipalities, and school districts—to certify they do not discriminate against the firearm or ammunition industries came into effect on September 1, 2021. Senate Bill 19 (SB 19), which was passed in mid-April and signed into law in June by Republican Governor Greg Abbot, comes on the heels of Texas SB 13, which prevents state investments in companies that restrict business activities with the oil and gas industry. Reaction to SB 19 included three of the state’s top municipal bond underwriters—J.P. Morgan Chase, Citigroup, and Bank of America (BofA)—electing to pull back from competing for new issue business in the state on grounds they could not or would not certify compliance with the law. As the second largest municipal debt market after California, Texas had over $58 billion in bond issuance in 2020. J.P. Morgan, Citigroup, and BofA are among the top five underwriters in the state, accounting for $6.4 billion of issuance in the first half of 2021.
October 28, 2021