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HB 34

Relating to prohibiting the investment of state money in certain countries and in certain private business entities in those countries.

89th Legislature (2025) Introduced by Jeff Barry and 24 co-sponsors

Texas prohibits state investment in terrorism-designated countries and their private businesses, effective September 2025, redirecting pension and endowment funds with potential economic trade-offs.

Effective on 9/1/25
#comptrollerofpublicaccounts(v2608) #governor(i0375) #homelandsecuritycouncil(v0675) #internationalrelations(s0038) #intergovernmentalrelations(i0447) #publicsafety #departmentof(v0251) #retirementsystems--general(i0725) #stateagencies #boards&commissions(i0749) #statefinances--management&control(i0748) #terrorism&internalsecurity(s0574)
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Bill Summary · HB 34

Legislative bill overview

HB 34 prohibits Texas from investing state funds—including pension funds, endowments, and other public money—in countries designated as state sponsors of terrorism or in private businesses operating within those countries. The bill became effective September 1, 2025, and applies to all state entities managing public investments.

Why is this important

This legislation directly impacts Texas's substantial investment portfolio, potentially affecting returns on state pension funds and university endowments while reshaping where public money flows globally. It reflects growing legislative interest in using state investment policy as a foreign policy tool, similar to divestment movements targeting specific regimes or industries.

Potential points of contention

  • Economic impact: Divesting from certain countries may reduce investment returns or increase costs for state pension funds, ultimately affecting teacher and public employee retirement benefits
  • Definition ambiguity: The bill's reliance on "state sponsors of terrorism" designations (likely tied to federal determinations) creates dependency on federal policy changes and may lack clear, consistent criteria
  • Practical enforcement: Identifying all private entities operating in restricted countries proves logistically complex given global supply chains and subsidiary structures, potentially requiring expensive compliance infrastructure

Compiled from official sources — confirm details with the bill’s official record.

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