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AUSTIN, Texas (Reuters) - Powerful business interests helped to scuttle proposed immigration restrictions in Texas on Wednesday, further evidence that Republicans in some states are facing resistance among their own supporters to an immigration clampdown.
A so-called "sanctuary cities" bill that would have allowed a crackdown on cities providing sanctuary to illegal immigrants died when the Texas legislature adjourned for another two years without passing it.
Since Arizona last year enacted sweeping restrictions on immigration and blamed the federal government for failing to pass national reforms, civil rights activists have feared that the crackdown would spread across the country.
Many watched Texas closely because it is the nation's second most populous state, shares a long border with Mexico, has a rapidly-growing Hispanic population, and like Arizona, is dominated by Republicans.
What's more, the sanctuary cities bill was far less restrictive than the measure passed in Arizona, and it was championed by Texas Republican Governor Rick Perry, who is considering running for president.
Political analysts expected it to sail through the Republican-dominated legislature.
While Republican party infighting and rivalry between the two chambers of the legislature were factors in its demise, shocked conservatives and Tea Party supporters blamed so-called "Country Club" Republicans with close ties to business.
"I don't, for one minute, blame the Democrats for this one," an angry Mike Openshaw, Texas Tea Party activist, told Reuters on Wednesday. "The chubbing was done by the Republican Austin machine establishment this time, which is just absolutely stunning considering the election of 2010."
In that election, Texas voters, much like the rest of the country, swept Republicans into office in historic numbers. For the first time in well over a century, Republicans enjoy a supermajority in the Texas House and just one seat shy of that in the Senate. Among those swept into office in Texas were several Hispanic Republicans.
Two powerful Texas businessmen joined the lobbying against the bill, legislative sources told Reuters.
Houston homebuilder Bob Perry and grocery chain magnate Charles E. Butt hired one of Austin's most powerful lobbyists to oppose the legislation.
Bob Perry has long been known as the top Republican donor in Texas. Last year alone, he gave some $7 million to political candidates, mainly Republicans, according to the Texas Ethics Commission. Some $2.5 million of that went to Governor Rick Perry. Bob Perry is not related to the governor.
Butt, who owns the H-E-B grocery store chain, donated close to $1 million to political candidates on both sides of the aisle last year, according to the commission.
"They had real reservations about it," Bill Miller, the lobbyist hired by the influential businessmen, told Reuters. "They wanted some changes made, and we expressed the reservations they had about it to members, which kind of slowed it down,"
Miller would not say what those concerns were, and calls to homebuilder Perry for comment were not returned late Wednesday. But lawmakers said business interests worried that the law would allow police to harass their workers. The construction and retail industries employ thousands of immigrants in Texas and across the nation.
The Texas Association of Business, historically skeptical of immigration bills and their potential to unjustly punish honest businesses, took no formal position on it, but did nothing to help it pass either.
Another factor in the bill's demise may have been opposition from Texas law enforcement groups.
"Our desire is that our legislators listen to and consider the thoughts and recommendations of our local law enforcement officials before enacting any laws that will impact them," Winell Herron, chief of public affairs for H-E-B, said in a written statement.
Texas is not the only state where powerful business interests have expressed reservations. After Georgia's Republican-led legislature passed a tough new anti-immigration law, farm groups expressed concern that the measure would staunch the flow of workers to help with harvesting crops. And in Utah, business interests helped to moderate proposals there. The package passed by the Utah legislature included a guest worker program as well as restrictions on immigration.
Besides Arizona, Georgia and Utah, several other states have passed immigration restrictions including Alabama, South Carolina and Indiana. But courts across the country have blocked immigration laws passed by the states, saying it is a matter for the federal government to resolve.
Editing by Greg McCune