Texas Legislature Wants To Reward Companies That Deny Employees Contraception

By Annie-Rose Strasser on Jan 28, 2013 at 1:00 pm

A bill recently introduced in the Texas state house aims to reward employees who violate Obamacare, offering subsidies to any company that uses religious objection as an excuse for denying its employees copay-free contraception.

House Bill 649, introduced by state Rep. Jonathan Stickland (R), was apparently inspired by the controversy over craft chain store Hobby Lobby. That store sued to deny its employees contraception coverage, citing its male president’s religious objections. But since Hobby Lobby, and companies like it, will be forced to pay a fine for violating the law, Strickland wants to compensate them with tax breaks:

The tax credit would be limited to the amount of a federal fine that the company pays or the amount of state tax the company owes.

“When a business is being stressed nearly to the point of bankruptcy by punitive federal taxes, of course the state should give them relief,” Stickland said in the news release.[...]

“The Obama administration’s mandate and their threats to bury Hobby Lobby with $1.3 million per day in tax penalties aren’t just unconstitutional, they’re unconscionable,” he said. “It is simply appalling that any business owner should have to choose between violating their religious convictions and watching their business be strangled by the strong arm of Federal mandates and taxation.”

By offering to help compensate these companies, Strickland is accepting a drastic cut in funding to the Texas government. His plan proposes letting organizations like Hobby Lobby off the hook for state taxes up to the amount they owe in federal penalties. Since Hobby Lobby is estimated to owe a fine of $1.3 million a day (more, in a year, than it would be paying in state taxes), Hobby Lobby would get a pass on giving a single cent to the state of Texas.

But more importantly, it’s unlikely that this bill would survive if it went to the courts. Federal law does not simply supersede conflicting state law, it also invalidates state laws that “stand… as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” — a doctrine known as “obstacle preemption.” Since the entire point of this Texas bill is to thwart a federal law, it would likely run afoul of this obstacle preemption.