INDIANAPOLIS (AP) — Indiana corporate leaders say the failure of the Republican-controlled Legislature to enact a law this year protecting gay, lesbian and bisexual people from discrimination could rebound on business, making it harder to sell the state as an attractive place to work and live.

Majority Republicans abandoned efforts to strengthen gay rights Tuesday, saying a compromise proposal had satisfied neither gay rights organizations nor religious conservatives.

State chamber President Kevin Brinegar says he is frustrated the Indiana Senate wasn’t able to move forward on what he called a “critical issue.”

The debate over the gay-rights protection bill had split many state business leaders and religious conservatives who are among key Republican Party supporters.

Brinegar says the Legislature’s inaction on the issue leaves Indiana at a disadvantage in the recruitment, attraction and retention of talented people following last spring’s national backlash over the state’s religious objection law.

He says state leaders must work together to reach a solution.

Indiana faced a backlash last year after it passed a law allowing those who oppose gay rights for religious reasons to withhold services such as providing flowers or cakes for same sex weddings. The law was later revised, although the Legislature wanted to revisit the issue this year.