This anti-boycott bill prohibits state contracts with and state investment in entities, including sole proprietorships and non-profits, that boycott Israel or territories occupied by Israel. The bill requires contractors to sign a written certification that they do not and will not engage in boycotts of Israel. It excludes contracts worth less than $1,000 or contractors who bid at least 20% less than other bidders. The bill calls for the creation of a blacklist of companies that boycott Israel and prohibits public retirement systems from investing in these companies. It also prohibits Arizona public entities from boycotting Israel, a provision aimed at discouraging divestment campaigns at public universities.
A federal court blocked enforcement of the law in September 2018, finding the plaintiff was likely to succeed in showing that the law violates his First Amendment rights and that the state’s continued enforcement of it would cause him irreparable harm. In 2019, Arizona amended the law (SB 1167) so it no longer applied to individuals like the plaintiff. The amendments altered the prohibitions related to state contracts, leaving in place those related to state investments.