Not long after Russia invaded Ukraine, the U.S. federal government and various state governments began taking myriad action against Russia and in support of Ukraine. Since our last update, states started taking more pointed actions, particularly with legislation prohibiting government dealings with Russia and Belarus.
The Missouri state House recently held a public hearing on legislation, HB 2913, that would prohibit state entities and private businesses from contracting with Russia, Russian entities, or any other country currently occupying or attacking a NATO ally.
Specifically under the bill, no public or private entity that receives public funds are able to enter into a contract with Russia, Russian entities, or any other country occupying or attacking a NATO member, Ukraine, Finland, Sweden, or Georgia. The bill defines a private entity as any for-profit or non-profit organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, sole proprietorship, or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of those entities or business associations that receives any public funding.
In early March, the New Jersey legislature passed legislation prohibiting government dealings with businesses associated with Russia or Belarus.
S1889 was signed into law by Governor Phil Murphy and states that a person who engages in investment activity with the Russian or Belarusian government will be placed on a list by the state Treasury and will not be allowed to contract with state agencies, file or renew a Public Works Contractor Registration, receive an economic development subsidy from the Economic Development Authority, be awarded a municipal property tax abatement, or make or enter into a payment in-lieu of property tax agreement, apply for or receive a tax clearance certificate from the Division of Taxation, be certified as an urban renewal entity for purposes of the “Long Term Tax Exemption Law,” or be designated as a redeveloper by a public agency for the purposes of the “Local Redevelopment and Housing Law.”
The legislation further prohibits New Jersey from investing pension or annuity funds in a company owned or controlled by either the Russian or Belarusian government and requires any such current investments to be divested within two years.
The legislation expires four years after its effective date.
Governor Kathy Hochul recently signed an Executive Order that directs all “affected state entities” to refrain from entering into a new contract or renew an existing contract with an entity conducting its business operations in Russia.
The Order defines “affected state entities” as all agencies and departments the governor has executive authority over and all public-benefit corporations, public authorities, boards, and commissions for which the governor appoints the chair, chief executive, or the majority of board members, except for the Port Authority of New York and New Jersey.
The Order further defines an “entity conducting business operations in Russia” as an institution or company, wherever located, conducting any commercial activity in Russia or transacting business with the Russian government or with commercial entities headquartered in Russia or with their principal place of business in Russia in the form of contracting, sales, purchasing, investment, or any business partnership.
On February 28th, a Pennsylvania lawmaker released a cosponsor memo for legislation prohibiting government dealings with businesses associated with Russia and Belarus. Specifically, the bill would prevent companies from receiving state contracts, grants, or state tax credits if they meet the following criteria:
- Have any direct equity share with the Governments of Russia or Belarus;
- Have any business operations that involve contracts with or the provision of goods or services to the Governments of Russia or Belarus;
- Are either headquartered or have a principal place of business in Russia or Belarus; or
- Support, assist, or facilitate the Governments of Russia or Belarus in their shared campaign to invade the sovereignty of Ukraine, either through in-kind support or for-profit.
The legislation has not been formally introduced yet and exact language is not available at the time of this writing.