Bill Text: TX HB104 | 2025-2026 | 89th Legislature | Comm Sub

---

Bill Title: Relating to the creation of the Texas future fund and the Texas future fund investment review board and to the permissible uses of money in the Texas future fund.

Sponsorship: Partisan Bill (Republican 2)

Status: (Engrossed - Dead) 2025-05-25 - Committee report printed and distributed [HB104 Detail]

Download: Texas-2025-HB104-Comm_Sub.html

---

By: Bonnen (Senate Sponsor - Schwertner) H.B. No. 104
(In the Senate - Received from the House May 6, 2025;
May 6, 2025, read first time and referred to Committee on Finance;
May 25, 2025, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 12, Nays 3; May 25, 2025,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR H.B. No. 104 By: Schwertner

A BILL TO BE ENTITLED
AN ACT
relating to the creation of the Texas future fund and the Texas
future fund investment review board and to the permissible uses of
money in the Texas future fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 4, Government Code, is amended
by adding Chapter 483 to read as follows:
CHAPTER 483. TEXAS FUTURE FUND
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 483.0001. PURPOSES. The purposes of this chapter are
to:
(1) strengthen this state's proven leadership in
supporting the advancement of innovative technologies; and
(2) develop and diversify this state's economy by
authorizing investments in frontier technology infrastructure,
industry sectors critical to national defense, and other innovative
technologies.
Sec. 483.0002. DEFINITIONS. In this chapter:
(1) "Board" means the Texas future fund investment
review board.
(2) "Fund" means the Texas future fund.
(3) "Trust company" means the Texas treasury
safekeeping trust company.
Sec. 483.0003. PUBLIC INFORMATION. (a) The following is
public information and may be disclosed under Chapter 552:
(1) the name, the address, and a summary description
of an entity that has received an investment of money from the fund;
(2) the date on which the fund made an investment in an
entity and, if applicable, the date of any additional investments
in the entity;
(3) the dollar amount of capital committed or invested
in an entity or project;
(4) the dollar amount of capital returned by an entity
in connection with an investment from the fund;
(5) the internal rate of return or another investment
performance metric used in connection with each investment of money
from the fund and the date on which the rate of return or other
investment performance metric was calculated;
(6) the names of the principals responsible for
managing any entity in which money from the fund is or has been
invested;
(7) each recusal filed by a member of the board in
connection with a deliberation or decision of the board relating to
an investment of money from the fund;
(8) the minutes and audio or video recordings of each
open portion of a board meeting at which an item described by
another provision of this subsection was discussed;
(9) the state's percentage ownership interest in an
entity that received an investment of money from the fund;
(10) any annual ethics disclosure report submitted to
the board or the trust company from an entity that has received an
investment of money from the fund; and
(11) any other relevant information concerning an
investment of money from the fund with the consent of the receiving
entity.
(b) All information received by the board, the comptroller,
the trust company, or a contractor of the comptroller or the trust
company from or about an entity that has received an investment of
money from the fund or an entity that was considered for an
investment of money from the fund that is not listed in Subsection
(a) is confidential and excepted from disclosure under Chapter 552.
SUBCHAPTER B. CREATION AND OPERATION OF TEXAS FUTURE FUND
Sec. 483.0051. CREATION OF FUND. The Texas future fund is
created as a separately managed account in the economic
stabilization fund. The comptroller shall administer the fund.
Sec. 483.0052. INVESTMENT OF MONEY IN FUND; ACCOUNTING.
(a) The trust company, or the trust company's designated
investment manager, in consultation with the board, shall invest
money in the fund in the manner authorized by this chapter.
(b) The trust company or its investment manager, as provided
by the investment policy adopted by the board under Section
483.0109, may invest the proceeds and other earnings received from
the sale of stock or other investments made using money in the fund
and any interest earned on amounts in the fund.
(c) The trust company shall:
(1) credit to the fund all payments, distributions,
interest, and other earnings attributable to the investment of
money in the fund; and
(2) provide separate accounting for, and reporting on,
the investments made using money in the fund.
Sec. 483.0053. INVESTMENT STANDARD. In managing the
investments made using money in the fund, the trust company, in the
manner authorized by the board, may acquire, exchange, sell,
supervise, manage, or retain any kind of investment that a prudent
investor, exercising reasonable care, skill, and caution, would
acquire or retain in light of the purposes, terms, distribution
requirements, and other circumstances then prevailing for the fund,
taking into consideration the investment of all the assets of the
fund rather than a single investment.
Sec. 483.0054. PAYMENT OF FUND EXPENSES. The reasonable
expenses of administering and managing the fund and its assets
shall be paid from the fund.
Sec. 483.0055. EXCLUSION OF INVESTED AMOUNTS FROM
CALCULATION OF CERTAIN OTHER FUND BALANCES. The amount of money
invested under this chapter is not included in the balance of the
economic stabilization fund for purposes of Section 404.0241(b).
Sec. 483.0056. THIRD-PARTY CONTRACTS. (a) The trust
company may enter into a contract with one or more qualified third
parties for the administration, management, and custody of the
assets of the fund and any other responsibilities authorized under
this chapter. A contract described by this subsection must require
the third party to act in a fiduciary capacity with respect to the
assets of the fund.
(b) The trust company shall contract with a certified public
accountant to perform an annual independent audit of the fund and to
evaluate and report on compliance with Section 483.0105.
(c) The trust company may contract with a licensed attorney
to review contracts and other legal documents.
SUBCHAPTER C. TEXAS FUTURE FUND INVESTMENT REVIEW BOARD
Sec. 483.0101. CREATION OF BOARD; COMPTROLLER SUPPORT. (a)
The Texas future fund investment review board is established to
serve as the governing body of the fund.
(b) The comptroller shall provide administrative support
and resources to the board as necessary for the board to perform its
duties under this chapter.
Sec. 483.0102. BOARD COMPOSITION. (a) The board is
composed of the following nine members:
(1) three members appointed by the comptroller;
(2) two members appointed by the governor;
(3) two members appointed by the lieutenant governor;
and
(4) two members appointed by the governor from a list
of candidates for appointment provided by the speaker of the house
of representatives.
(b) In making appointments to the board:
(1) under Subsections (a)(1)-(3), the comptroller,
governor, and lieutenant governor must each appoint:
(A) one member with experience in private equity,
venture capital, or a similar field; and
(B) one member with experience in frontier
technology infrastructure, an industry sector that is critical to
national defense, or another innovative technology;
(2) under Subsection (a)(4), the governor must
appoint:
(A) one candidate for appointment with
experience in private equity, venture capital, or a similar field;
and
(B) one candidate for appointment with
experience in frontier technology infrastructure, an industry
sector that is critical to national defense, or another innovative
technology; and
(3) the comptroller must appoint at least one member
with experience managing, directing, overseeing, or investing
public funds or public pension assets.
(c) The governor may reject one or more of the candidates on
a list submitted by the speaker of the house of representatives
under Subsection (a)(4) and request a list of additional candidates
for appointment.
(d) The comptroller shall designate one member appointed
under Subsection (a)(1) as the presiding officer of the board.
Sec. 483.0103. BOARD MEMBER TERMS; VACANCY. (a) Board
members serve staggered six-year terms, with the terms of three
members expiring on January 31 of each odd-numbered year.
(b) Not later than the 30th day after the date a board
member's term expires, the appropriate appointing authority shall
appoint a replacement as provided by Section 483.0102.
(c) A vacancy on the board shall be filled in the same manner
and is subject to the same qualifications as the original
appointment. A board member appointed to fill a vacancy on the
board shall serve the remainder of the unexpired term.
Sec. 483.0104. ELIGIBILITY FOR APPOINTMENT TO BOARD. A
person is not eligible for appointment to the board if the person or
the person's spouse:
(1) is employed by, or participates in, the management
of a business entity or other organization receiving an investment
from the fund; or
(2) owns or controls, directly or indirectly, an
interest in a business entity or other organization receiving an
investment from the fund.
Sec. 483.0105. CONFLICTS OF INTEREST. (a) Subject to the
comptroller's approval, the board shall adopt a code of ethics,
including conflict of interest standards, based on standards of
professional conduct and ethics common in the financial industry
for conduct governing members of the board and the investment
decision-making process. Each member of the board shall affirm in
writing the member's compliance with the code of ethics and the
corresponding conflict of interest standards.
(b) The conflict of interest standards, at a minimum, must
define conflicts of interest and address appropriate standards for
recusal, required disclosure of conflicts, waivers of conflicts,
and actions required to address undisclosed conflicts.
Sec. 483.0106. BOARD MEMBER TRAINING. (a) Before a member
of the board may assume the member's duties, the member must
complete a training course provided by the comptroller.
(b) A training course required under this section must
provide information to the board member regarding:
(1) the role and functions of the board; and
(2) the requirements of Chapters 551 and 552.
Sec. 483.0107. COMPENSATION AND EXPENSES OF BOARD MEMBERS.
Members of the board shall serve without compensation but shall be
reimbursed for their actual expenses incurred in attending meetings
of the board or in performing other work of the board when that work
is approved by the presiding officer of the board.
Sec. 483.0108. BOARD MEETINGS. (a) The board shall meet at
least twice each year to review the fund's investments.
(b) The board may conduct a closed meeting in accordance
with Subchapter E, Chapter 551, to discuss issues related to
managing, acquiring, or selling securities.
Sec. 483.0109. GENERAL POWERS AND DUTIES OF BOARD. (a) The
board shall:
(1) oversee the investment of the assets of the fund;
and
(2) provide guidance on the investment strategy to be
used to manage the assets of the fund.
(b) The board shall develop and require adherence to
procedures for operational and investment due diligence on
investment opportunities that meet the requirements of this
chapter. The procedures must be based upon financial industry best
practices.
(c) The board shall develop and maintain a list of target
industries and investment opportunities that represent sectors
critical to national defense, frontier technologies with the
greatest potential to drive innovation, and the diversification of
this state's economy.
(d) The board shall establish an investment policy for the
fund. Subject to the comptroller's approval, the investment
policy, at a minimum, must:
(1) limit fund investment to no more than 20 percent of
the estimated total value of any single project calculated at the
time of investment;
(2) limit fund participation to no more than 30
percent of the total value of any single entity calculated at the
time of the investment;
(3) prioritize investments in entities with a physical
presence in this state;
(4) prioritize investments in entities expanding
employment opportunities in this state;
(5) prohibit the use of race, color, ethnicity, sex,
gender identity, or sexual orientation in investment decisions; and
(6) require compliance with the investment
restrictions contained in Chapters 2270, 2271, 2273, 2274, 2275,
and 2276.
(e) The board shall establish priorities for the fund's
investment program biennially. The board shall consider those
priorities when making investment decisions under this chapter.
Sec. 483.0110. INVESTMENT PROCEDURES. (a) Subject to the
comptroller's approval, the board shall develop procedures for
making investments under this chapter.
(b) For each investment being considered, the trust company
or the trust company's designated investment manager shall:
(1) present its due diligence findings to the board;
(2) provide a written investment memorandum
summarizing the investment opportunity, along with an assessment
of the expected investment risk and rate of return and estimated
effect on this state's economy; and
(3) provide a summary of how each investment
opportunity being recommended meets the overall objectives of the
board's investment policy and related investment requirements.
Sec. 483.0111. BOARD REPORT. Not later than December 31 of
each even-numbered year, the board shall submit a report to the
legislature with the following information:
(1) a summary of the investments made using money in
the fund during the preceding state fiscal year, including, for
each investment, the name of the entity receiving the investment,
the amount of the investment, and a brief description of the
activities of the entity receiving the investment; and
(2) a summary of the estimated effect of the
investments made using money in the fund on this state's economy.
SECTION 2. Section 404.0241, Government Code, is amended by
adding Subsection (b-6) to read as follows:
(b-6) Notwithstanding any other law, the comptroller shall
designate $500 million of the economic stabilization fund balance
as the initial balance of a separately managed account in the
economic stabilization fund. The account shall be known as the
Texas future fund, administered by the comptroller, and managed in
accordance with Chapter 483.
SECTION 3. As soon as practicable after the effective date
of this Act but not later than October 1, 2025, the comptroller of
public accounts, governor, and lieutenant governor shall appoint
the initial members of the Texas future fund investment review
board as required by Section 483.0102, Government Code, as added by
this Act. The initial members appointed to the board, other than
the member designated as the presiding officer of the board, shall
draw lots to determine which three members serve a term that expires
January 31, 2027, which three members serve a term that expires
January 31, 2029, and which two members serve a term that expires
January 31, 2031. The member designated as the presiding officer of
the board serves a term that expires January 31, 2031.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.
* * * * *