Legislation banning state contracts and investment in companies that boycott Israel was signed into law by Gov. Greg Abbott on Tuesday at the Jewish Community Center in northwest Austin.

The law is a response to the Boycott, Divestment and Sanctions movement that seeks to change Israeli policy toward Palestinians.

The bill Abbott signed into law — House Bill 89 — prohibits the state from contracting with and investing in companies that boycott Israel.

“The Israeli economy is intertwined with its surrounding economies and is a valuable trade partner to Texas and an essential U.S. ally,” state Rep. Phil King, R-Weatherford, the bill’s author, has said in a statement. “Efforts to isolate the Israeli economy are detrimental to Israel as well its trade partners, allies, and neighboring economies. Texas should not support these efforts by doing business with or investing in companies that boycott Israel.”

The Israeli-Palestinian conflict dates to before the creation of Israel in 1948 and centers on disputed land and holy sites in the Middle East.

Despite stated goals at creating two states — an independent Palestine alongside Israel, as envisioned in a series of accords — Palestinian territory remains under Israeli control, leading to a cascade of claims of rights violations.

The Palestinian BDS National Committee calls for a boycott of all Israeli products, though its major campaigns are against companies that operate in the occupied West Bank. Organizers say they were inspired by the South African anti-apartheid movement to call for boycotts as a form of non-violent pressure on Israel.

Under the new law, the Texas Comptroller’s Office shall prepare a list of “all companies that boycott Israel” and provide the list to all state agencies.

If an agency finds it is doing business with one of the listed companies, it shall warn the company its contract is in jeopardy and offer it the “opportunity to clarify its Israel-related activities.”

Within three months, the company “must cease boycotting Israel in order to avoid qualifying for divestment by state governmental entities.”

“As Israel’s No. 1 trading partner in the United States, Texas is proud to reaffirm its support for the people of Israel and we will continue to build on our historic partnership,” Abbott said. “Anti-Israel policies are anti-Texas policies, and we will not tolerate such actions against an important ally.”

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