Bill > SB404

This bill modifies Texas state law regarding local government investments in investment pools by establishing new restrictions and requirements. Specifically, local governments will now only be allowed to invest funds in investment pools managed by the Texas comptroller or the Texas Treasury Safekeeping Trust Company. For any existing investments in "restricted investment pools" (those not managed by these two entities), local governments must develop a mandatory divestment schedule, removing at least 50% of funds within 180 days of discovering the investment and 100% of funds within 360 days. The bill allows some flexibility in this divestment timeline if a local government can provide clear and convincing evidence that immediate divestment would result in significant financial losses or substantial deviation from investment benchmarks. In such cases, the local government must submit detailed reports to legislative leaders, the attorney general, and the comptroller explaining the reasons for delaying divestment, including objective numerical evidence supporting their position. These new requirements will apply only to contracts entered into on or after the bill's effective date of September 1, 2025, ensuring existing contracts are not immediately disrupted.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB404