Texas House Bill HB 3474

Texas 2025 - 89th Regular

• Filed: 2/27/25
• Out of House Committee: 4/11/25
• Voted on by House: 5/6/25
• Out of Senate Committee: 5/14/25
• Voted on by Senate: 5/19/25
• Governor Action: 5/29/25

Caption

Relating to the evaluation and reporting of investment practices and performance of certain public retirement systems.

Summary

HB 3474 revises the requirements for evaluating and reporting the investment practices and performance of certain Texas public retirement systems. The bill changes how often systems must undergo an independent evaluation based on asset size, replacing the prior fixed timing with a board-prescribed evaluation schedule. Systems with at least $100 million in assets must be evaluated every three years, while systems with at least $30 million but less than $100 million generally must be evaluated every six years, subject to an acceleration rule if pension liabilities rise to $100 million or more. Systems with less than $30 million in assets remain exempt from the evaluation requirement. The bill also updates the reporting process for evaluation firms and retirement system governing bodies. It requires the independent firm to first provide a substantially completed draft report to the retirement system for discussion and clarification, then request the system’s written response and any action taken or expected in response to recommendations. The final report must include the system’s response, and the governing body must submit the report to the State Pension Review Board. The bill defines “evaluation schedule” and adds a definition of “total pension liability” tied to Governmental Accounting Standards Board Statement No. 68. The State Pension Review Board must develop the new deadline schedule by January 1, 2026, and the act takes effect September 1, 2025.

Impact

HB 3474 amends Section 802.109 of the Government Code, affecting oversight rules for public retirement systems in Texas. It changes the statutory evaluation frequency thresholds, adds a liability-based trigger that can shorten the evaluation cycle, clarifies when smaller systems are exempt, and formalizes the draft-review and response process for independent evaluation reports. The bill primarily affects public retirement systems, independent evaluators, and the State Pension Review Board, which must establish the new deadline schedule.

Sentiment

The bill appears to have broad bipartisan support and little visible opposition. It passed the House 147-0 and the Senate 31-0, indicating strong consensus around the measure. The available record shows no committee transcript debate, suggesting the bill was relatively noncontroversial and technical in nature.

Contention

No major points of contention are evident in the available materials. The main policy choices embedded in the bill are the asset and liability thresholds that determine how often retirement systems are reviewed, and the requirement that systems have an opportunity to review and respond to draft findings before the final report is filed. Any potential concern would likely center on the administrative burden for retirement systems and the State Pension Review Board, but the unanimous votes suggest those concerns were not significant in the legislative process.