(Bloomberg) -- Texas borrowers gathered at an industry conference bemoaned two Republican-backed laws in the state that issuers say have restricted which Wall Street banks they can do business with. 

The local officials spoke on a panel Tuesday before a packed room of city representatives, bankers and lawyers at an event hosted by the Bond Buyer in Austin. Several bankers at the conference work at firms that have been ensnared by the laws at various points since they took effect almost three years ago. 

“I look around the room, I’m seeing a bunch of bankers, lawyers, prospect vendors that want to knock on the door of all the municipalities up here to do business,” said Vernon Lewis, director of the Treasury Department for the city of Houston. The “person that really needs to be in the room is the attorney general and the comptroller.”

Lewis said the new rules limited the number of liquidity providers the municipality could work with on its nearly $3 billion commercial-paper program, which it uses for capital-improvement projects.

Texas enacted the laws, which target banks for their firearm and energy policies, in September 2021. The measures roiled the state’s roughly $50-billion-a-year municipal-bond market as firms have faced various hurdles in operating there. Citigroup Inc. was banned from working on muni deals in Texas last year due to its firearm policies, and UBS Group AG was placed on a list of companies that — as the state sees it — “boycott” the fossil fuels industry. 

Texas Attorney General Ken Paxton is in the middle of a months-long probe of banks’ energy policies. Texas’ comptroller, who has published a list of companies that he deems are boycotting the energy industry, speaking at the conference Tuesday, said he wanted banks to be able to do business there to support the state’s economy. 

For Amy Perez, deputy executive director for the Office of Management and Budget for Harris County, the new measures are creating extra work.

Her team now hires two dealers on bond deals, she said, instead of their usual practice of just choosing one, in case either of them gets entangled in the ESG probes.

She said she has yet to notice a pricing differential on bond deals.

“Anytime you lose competition of any kind it is a concern,” she said. “It could possibly get to a point that we see a differential in pricing.”

Meanwhile, Houston has several borrowings planned and faces a deficit.

The decreased competition “drives up costs for taxpayers and it makes the work that we have do to dig our city out of a financial hole even harder,” said Chris Hollins, the city’s controller, said in a speech.

(Updates with comment from Houston official in final paragraph)

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