HB 104

relating to the creation of the Texas future fund, the Texas future
fund investment review board, and permissible investments by the
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 403 Government Code, is amended by
adding Subchapter U to read as follows:
SUBCHAPTER U.  TEXAS FUTURE FUND
Sec. 403.701.  DEFINITIONS.  In this subchapter:
(1)  "Fund" means the Texas future fund.
(2)  "Board" means the Texas future fund investment
(3)  "Trust company" means the Texas treasury
Sec. 403.702.  ESTABLISHMENT; PURPOSE.  (a)  The Texas
future  fund is established to strengthen the state's proven
leadership in  supporting the advancement of innovative
(b)  The purpose of the fund is to develop and diversify the
economy of Texas by making investments in frontier technology
infrastructure, industry sectors critical to national defense, and
other innovative technologies as recommended by the board.
Sec. 403.703.  TEXAS FUTURE FUND.  (a)  The Texas future fund
is a separately managed account within the Texas economic
stabilization fund to be administered by the comptroller.
(b)  Under guidance of the board, the trust company, or the
trust company's designated investment manager, shall make
investments with money from the fund as authorized by this
subchapter.  The trust company or its investment manager may,
pursuant to the board policy adopted under Sec. 403.708, invest
proceeds, interest earned, or other earnings received from the sale
of stock or other investments in the fund.  The trust company shall
provide separate accounting and reporting for the investments in
the fund and shall credit to the fund all payments, distributions,
interest, and other earnings on the investments in the fund.
(c)  In managing these investments, the trust company may,
under guidance of the board, 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
(d)  Amounts invested pursuant to this subchapter are not
included in the balance of the economic stabilization fund for
purposes of Section 404.0241(b).
(e)  The reasonable expenses of administering and managing
the fund and its assets shall be paid from the fund.
Sec. 403.704.  THIRD-PARTY CONTRACTS; AUDITS.  (a)  The
trust company may enter into contracts 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 subchapter.  An entity that is contracted to administer,
manage, or custody assets of the fund shall be required
contractually to act in a fiduciary capacity with respect to the
(b)  The trust company may contract with a certified public
accountant to perform an independent audit of the fund.
(c)  The trust company may contract with a licensed attorney
to review contracts and other legal documents.
Sec. 403.705.  FUTURE FUND INVESTMENT REVIEW BOARD
COMPOSITION.  (a)  the Texas future fund investment review board is
the governing body of the fund.  The board is composed of the
(1)  two members appointed by the governor;
(2)  two members appointed by the lieutenant governor;
(3)  two members appointed by the speaker of the house
(4)  three members appointed by the comptroller of
public accounts, one of which shall be designated the chair of the
(b)  In making appointments to the board:
(1)  the governor, lieutenant governor, speaker of the
house of representatives, and comptroller must each appoint one
member with experience in either private equity, venture capital,
(2)  the governor, lieutenant governor, speaker of the
house of representatives, and comptroller must each appoint one
member with experience in either frontier technology
infrastructure, industry sectors critical to national defense, or
other innovative technologies; and
(3)  the comptroller must appoint one member with
experience managing, directing, overseeing, or investing public
funds or public pension assets.
(c)  A person may not be a member of the board if the person
(1)  is employed by, or participates in, the management
of a business entity or other organization receiving an investment
(2)  owns or controls, directly or indirectly, an
interest in a business entity, or other organization receiving an
Sec. 403.706.  BOARD MEMBER TERMS; VACANCY.  (a)  board
members appointed by the governor, lieutenant governor, speaker of
the house, and comptroller serve at the pleasure of the appointing
office for 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
(c)  If a vacancy occurs on the board, the appropriate
appointing authority shall appoint a successor, in the same manner
as the original appointment, to serve for the remainder of the
unexpired term.  The appropriate appointing authority shall appoint
the successor not later than the 30th day after the date the vacancy
Sec. 403.707.  CONFLICTS OF INTEREST.  (a)  Subject to the
approval of the comptroller, 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 shall, at a minimum,
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. 403.708.  BOARD POWERS AND DUTIES.  (a)  The board shall
oversee the investment of the fund, including providing guidance on
the investment philosophy that should be pursued in managing the
(b)  The board shall develop and require adherence to
procedures for operational and investment due diligence on
opportunities that meet the requirements of this subchapter.  The
procedures shall be based upon financial industry best practices.
(c)  The board shall develop and maintain a list of target
industries and opportunities that represent sectors critical to
national defense, frontier technologies with the greatest
potential to drive innovation, and the diversification of the
(d)  The board shall establish an investment policy for the
fund.  Subject to the approval of the comptroller, the investment
policy must, at a minimum, include the following requirements,
(1)  limit Texas future fund investment to no more than
twenty percent of the estimated total value of any single project
calculated at the time of investment;
(2)  limit Texas future fund participation to no more
than thirty percent of the total value of any single company
calculated at the time of the investment;
(3)  prioritization of investments in companies with a
(4)  prioritization of investments in companies
expanding employment opportunities in Texas;
(5)  a prohibition on the use of race, color,
ethnicity, sex, gender identity, or sexual orientation in
(6)  compliance with investment restrictions contained
in Chapters 2270, 2271, 2273, 2274, 2275, and 2276 of the Texas
(e)  The board shall biennially set priorities for the fund's
investment program and consider the priorities in making investment
decisions under this subchapter.
(f)  The board may conduct a closed meeting in accordance
with Subchapter E, Chapter 551, Texas Government Code, to discuss
issues related to managing, acquiring, or selling securities.
(g)  The board shall meet at least two times per year to
(h)  The comptroller shall provide administrative support
and resources to the board as necessary for the board to perform its
(j)  Not later than December 31 of each even numbered year,
the board shall submit a report to the legislature with the
(1)  a summary of the investments made as of the most
recent fiscal-year end, including the name of the companies, the
amount of the investments, and brief description of the companies
(2)  a summary of the estimated impact the investments
Sec. 403.709.  PUBLIC INFORMATION.  (a)  The following
information is public information and may be disclosed under
(1)  the name, address, and a summary description of an
entity that has received an investment from the fund;
(2)  the date on which the fund made an investment in
the company and the date of any follow-on investments if
(3)  the dollar amount of capital committed or invested
(4)  the dollar amount of capital returned by the
company 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 the fund
has made and the date on which the return or other investment
performance metric was calculated;
(6)  the names of the principals responsible for
managing any company in which the fund is or has invested;
(7)  each recusal filed by a member of the board in
connection with a deliberation or decision of the board relating to
(8)  the minutes and audio or video recordings of each
open portion of a meeting of the board at which an item described by
(9)  the state's percentage ownership interest in a
company that received an investment from the fund;
(10)  any annual ethics disclosure report submitted to
the board or the trust company from a company that has received an
(11)  any other relevant information concerning a fund
investment with the consent of the receiving company.
(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 a company that has received an investment
from the fund or a company that was considered for an investment
from the fund that is not listed in subsection (a) is confidential
and excepted from the requirements of chapter 552.
Sec. 403.710.  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 program established under this section shall
provide information to the member regarding:
(1)  the role and functions of the board; and
(A)  Chapter 551, Texas Government Code; and
(B)  Chapter 552, Texas Government Code.
Sec. 403.711.  COMPENSATION AND EXPENSES OF APPOINTED BOARD
MEMBERS.  Appointed members of the board shall serve without pay 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 chair of the board.
Sec. 403.712.  INVESTMENT PROCEDURE.  (a)  Subject to the
comptroller's approval, the board shall develop procedures for
making investments under this subchapter.
(b)  For each investment being considered, the trust company
or the trust company's designated investment manager shall:
(i)  present its due diligence findings to the board;
(ii)  provide a written investment memorandum,
summarizing the investment opportunity, along with an assessment
of the expected investment risk and rate of return, and estimated
impact on the state's economy; and
(iii)  provide a summary of how each opportunity being
recommended meets the overall objectives of the board's investment
policy and related investment requirements;
SECTION 2.  Section 404.0241, Government Code, is amended by
adding a new subsection (b-6) to read as follows:
(b-6)  Notwithstanding any other law, the comptroller shall
designate $5 billion of the economic stabilization fund to comprise
a separately managed account within the economic stabilization fund
called the "Texas Future Fund", to be administered by the
comptroller and managed in accordance with Chapter 403, Subchapter
SECTION 3.  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.