House OKs cutting ties with firms that boycott Israel

North Carolina wouldn't invest in or award government contracts to companies that boycott Israel under a proposal approved Thursday by House lawmakers.

Some churches and firms have initiated a boycott in response to Israel's growing presence in the West Bank. House Bill 161 targets companies that try to "penalize, inflict economic harm, or otherwise limit commercial relations specifically with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories."

The State Treasurer's Office would have to create a list of such companies based on data collected from government agencies, research firms and nonprofits, and companies would have the chance to prove they don't belong on the list. Once the list was published, state pension funds would have about six months to divest holdings in any firms on the list and would be barred from investing in them in the future.

The legislation ensures North Carolina "will not unknowingly become a party to discriminatory business practices or boycotts against the state of Israel," said sponsor Rep. Jon Hardister, R-Guilford, reading from a letter to lawmakers from the Jewish Federations of North Carolina.

Companies on the list also wouldn't be allowed to bid on state contracts larger than $1,000, and existing contracts with those firms would be allowed to expire.

Rep. Yvonne Holley, D-Wake, questioned the logistics of the restrictions, noting some firms are having a hard time working with an Iran divestment law the General Assembly passed two years ago because they have to check whether subcontractors and vendors have any ties to Iran.

"We feel this is easy to do, but it's not," Holley said.

Rep. Phil Lehman, D-Durham, said the isn't necessary because no U.S. companies would be on the list. Only about a dozen worldwide would qualify, he said, and even some of them are merely choosing not to do business in the West Bank and aren't really boycotting Israel.

"We are wading into foreign relations here. This is not something that the North Carolina General Assembly needs to get into," Lehman said, adding that the measure also could penalize church-run childcare or foster care programs if they are part of a denomination that is participating in the boycott.

Twenty religious groups and other organizations, including Jewish Voice for Peace, called on lawmakers to defeat the bill, saying it is a "repressive tactic of silencing free speech and prohibiting protest."

But Rep. Larry Pittman, R-Cabarrus, said North Carolina needs to stand up for Israel and in solidarity with that country against its enemies.

"There's an old saying, I believe it comes from the Lord, if you're not with me, you're against me," Pittman said. "This is a good opportunity for us to say to Israel, 'We are with you.'"

Sponsor Stephen Ross, R-Alamance, said 16 other states already have laws on the books related to boycotts of Israel, and eight more aside from North Carolina have them under consideration.

House Bill 161 passed 88-21 and heads to the Senate.