LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 14, 2025 TO: Honorable Greg Bonnen, Chair, House Committee on Appropriations FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB104 by Bonnen (Relating to the creation of the Texas future fund, the Texas future fund investment review board, and permissible investments by the economic stabilization fund.), As Introduced The fiscal implications of the bill cannot be determined due to unknown future investment returns of the fund. The bill would establish the Texas Future Fund as an account within the Economic Stabilization Fund (ESF). The account would be created to invest in frontier technology, industries critical to national defense, and other innovative technologies.The account would be administered by the Comptroller and investments would be managed based on prudent investor principles.The bill would allow the Texas Treasury Safekeeping Trust Company (TTSTC) to contract third parties to manage the fund, including auditing and legal review functions.The bill would establish a nine-member board appointed by the Governor, Lieutenant Governor, Speaker of the House, and Comptroller, with specific expertise requirements. The board members would serve staggered six-year terms, with replacements appointed within 30 days of a vacancy. The bill would require a code of ethics and conflict-of-interest standards for board members.The bill would provide investment oversight responsibilities, investment, prioritization of Texas-based investments, and prohibited factors in investment decisions. The bill would specify which account-related information would be considered public and what would be confidential. The board members would not be compensated for their service, but they would be reimbursed for expenses. The bill would establish due diligence requirements, including written investment memoranda and risk assessments.The bill would require the Comptroller to allocate $5 billion in the ESF to the account.The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2025.The bill would require the allocation of $5 billion from the ESF into the newly established account within ESF. However, the future investment returns of the fund are unknown, thus, the fiscal impact on the state cannot be estimated.The bill could impact the state's ability to maintain sufficient liquidity. Specifically, Article III, Section 49-g(j) of the Texas Constitution authorizes the Comptroller to transfer money from the ESF to General Revenue Fund to prevent or eliminate a temporary cash deficiency in general revenue. The investments authorized under this bill would be less liquid than current authorizations and could limit the funds available to manage the state's cash flow. Local Government ImpactNo fiscal implication to units of local government is anticipated. Source Agencies: b > td > 304 Comptroller of Public Accounts LBB Staff: b > td > JMc, KK, SD
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 14, 2025
TO: Honorable Greg Bonnen, Chair, House Committee on Appropriations FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB104 by Bonnen (Relating to the creation of the Texas future fund, the Texas future fund investment review board, and permissible investments by the economic stabilization fund.), As Introduced
TO: Honorable Greg Bonnen, Chair, House Committee on Appropriations
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB104 by Bonnen (Relating to the creation of the Texas future fund, the Texas future fund investment review board, and permissible investments by the economic stabilization fund.), As Introduced
Honorable Greg Bonnen, Chair, House Committee on Appropriations
Honorable Greg Bonnen, Chair, House Committee on Appropriations
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB104 by Bonnen (Relating to the creation of the Texas future fund, the Texas future fund investment review board, and permissible investments by the economic stabilization fund.), As Introduced
HB104 by Bonnen (Relating to the creation of the Texas future fund, the Texas future fund investment review board, and permissible investments by the economic stabilization fund.), As Introduced
The fiscal implications of the bill cannot be determined due to unknown future investment returns of the fund.
The fiscal implications of the bill cannot be determined due to unknown future investment returns of the fund.
The bill would establish the Texas Future Fund as an account within the Economic Stabilization Fund (ESF). The account would be created to invest in frontier technology, industries critical to national defense, and other innovative technologies.The account would be administered by the Comptroller and investments would be managed based on prudent investor principles.The bill would allow the Texas Treasury Safekeeping Trust Company (TTSTC) to contract third parties to manage the fund, including auditing and legal review functions.The bill would establish a nine-member board appointed by the Governor, Lieutenant Governor, Speaker of the House, and Comptroller, with specific expertise requirements. The board members would serve staggered six-year terms, with replacements appointed within 30 days of a vacancy. The bill would require a code of ethics and conflict-of-interest standards for board members.The bill would provide investment oversight responsibilities, investment, prioritization of Texas-based investments, and prohibited factors in investment decisions. The bill would specify which account-related information would be considered public and what would be confidential. The board members would not be compensated for their service, but they would be reimbursed for expenses. The bill would establish due diligence requirements, including written investment memoranda and risk assessments.The bill would require the Comptroller to allocate $5 billion in the ESF to the account.The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2025.The bill would require the allocation of $5 billion from the ESF into the newly established account within ESF. However, the future investment returns of the fund are unknown, thus, the fiscal impact on the state cannot be estimated.The bill could impact the state's ability to maintain sufficient liquidity. Specifically, Article III, Section 49-g(j) of the Texas Constitution authorizes the Comptroller to transfer money from the ESF to General Revenue Fund to prevent or eliminate a temporary cash deficiency in general revenue. The investments authorized under this bill would be less liquid than current authorizations and could limit the funds available to manage the state's cash flow.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD
JMc, KK, SD