(Reuters) - Arizona Governor Jan Brewer vetoed a bill on Wednesday that has been derided by critics as a license to discriminate against gays in the name of religion, saying the controversial measure could "create more problems than it purports to solve."
The measure, passed by the Republican-controlled state legislature last week, would have allowed business owners to cite their religious beliefs as legal grounds for refusing to serve same-sex couples or any other prospective customer.
Brewer had come under mounting pressure to veto the measure after a number of major business organizations and some fellow Republican politicians, including the state's two U.S. senators, came out against the legislation, dubbed Senate Bill 1062.
"Senate Bill 1062 does not address a specific or present concern related to religious liberty in Arizona," Brewer said in a brief statement from her office in announcing her decision, to cheers from gay-rights activists rallying outside the capitol.
"I have not heard one example in Arizona where a business owner's religious liberty has been violated," she said, going on to critique the bill as a broadly worded proposal that "could result in unintended and negative consequences."
Brewer's rejection of the bill coincided with another high-profile victory on Wednesday for gay rights activists, who won a federal court decision in Texas striking down that state's ban on same-sex marriage as unconstitutional, although it was immediately stayed pending appeal.
In a nod to conservative supporters of the Arizona bill who have expressed concerns over how such court rulings could encroach on the religious convictions of those opposed to gay marriage, Brewer said, "I understand that long-held norms about marriage and family are being challenged as never before."
However, she added, "I sincerely believe that Senate Bill 1062 has the potential to create more problems than it purports to solve. It could divide Arizona in ways we cannot even imagine."
WIDELY OPPOSED BY BIG BUSINESS
In her formal veto message transmitted by letter to the president of Arizona's Senate, Brewer also pointed to broad opposition the bill faced from the very business community that supporters said the measure was designed to protect.
Her veto announcement came hours after Major League Baseball and the National Football League joined a growing chorus of business organizations denouncing or expressing strong reservations about the legislation.
Echoing calls for Arizona boycotts previously stirred by Brewer's support for tough measures to clamp down on illegal immigration, the Hispanic National Bar Association said on Wednesday its board had voted unanimously to pull its annual convention from Phoenix in light of last week's passage of 1062.
The measure gained final approval from the Republican-controlled state legislature last Thursday, putting Brewer at the center of a contentious political debate at a time when she has sought to ease partisan discord while focusing on efforts to revive Arizona's economy.
Many in the political right hailed the bill as a necessary defense of religious freedom while the left denounced it as a form of state-sanctioned discrimination.
Under the measure, a business would have been immune to a discrimination lawsuit if a decision to deny service was motivated by "sincerely held" religious beliefs and if providing service would burden exercising of those beliefs.
But many critics, some from her own party, have said the bill undermined Arizona's image and would damage its economy.
The measure surfaced following a string of federal court victories by gay rights activists seeking to strike down restrictions on same-sex marriage in several states, including New Mexico, Utah, Kentucky, Virginia and, now, Texas.
Seventeen U.S. states and the District of Columbia recognize gay marriage in a trend that has gained momentum since the U.S. Supreme Court ruled in June that legally married same-sex couples nationwide are eligible for federal benefits.
Arizona is among more than 30 states that still ban gay or lesbian couples from marrying.