Texas Senate Bill SB 2138

Texas 2025 - 89th Regular

• Filed: 3/10/25
• Out of Senate Committee: 4/24/25
• Voted on by Senate: 5/8/25
• Out of House Committee: 5/22/25

Caption

Relating to prohibiting the investment of the permanent university fund, the Texas University Fund, or money held by a public institution of higher education in financial companies that boycott certain energy companies.

Summary

SB 2138 would extend Texas’s anti-boycott investment restrictions to higher education endowments and related public funds. Specifically, it makes Chapter 809, Government Code, apply to the governing boards of public institutions of higher education, the Texas University Fund, and the permanent university fund, treating them as state governmental entities for purposes of that chapter. The practical effect is to prohibit these funds from investing in financial companies that boycott certain energy companies. The bill amends the Education Code to incorporate Chapter 809’s framework into the management of the permanent university fund, the Texas University Fund, and public higher education governing boards. It does not create a new standalone investment regime so much as it expands the reach of an existing state policy against doing business with or investing in companies that boycott the energy sector. The bill takes effect September 1, 2025. The voting history suggests the bill had majority support but was not unanimous, with repeated 23-8 votes in the Senate on procedural and passage motions and a 22-9 vote on third reading. That pattern indicates the measure was generally favored by the majority party or supporters of Texas’s energy-sector investment policies, while drawing consistent opposition from a smaller bloc. The main point of contention is the policy choice to tie university-related funds to the state’s anti-boycott rules. Supporters likely view the bill as protecting Texas energy interests and aligning public investments with state policy, while opponents may see it as limiting investment flexibility and using public higher education funds to advance political or ideological objectives. No committee transcript was provided, so the recorded votes are the primary indicator of sentiment and disagreement.

Impact

The bill would amend the Education Code to subject the permanent university fund, the Texas University Fund, and public higher education governing boards to Chapter 809, Government Code, as if they were state governmental entities. This expands existing state anti-boycott investment restrictions to additional public education-related funds and boards, affecting how those entities may invest and which financial companies they may use or hold through their portfolios. The affected parties include public universities, their governing boards, fund managers, and financial firms that boycott certain energy companies.

Sentiment

Overall sentiment appears supportive but divided. The bill advanced through the Senate with clear majority votes, indicating substantial backing for the policy, but the consistent 8-9 votes against show meaningful opposition. The available record suggests the measure was treated as a priority for supporters of Texas energy policy and state investment restrictions, while critics remained concerned about the scope of the mandate.

Contention

The central controversy is whether public higher education funds should be bound by Texas’s anti-boycott rules for financial companies. Supporters likely argue that the state should not invest public money with firms that boycott oil and gas companies, especially given Texas’s energy economy. Opponents likely object that the bill constrains fiduciary discretion, could reduce investment options or returns, and extends politically charged investment screening into university endowments and funds. The absence of committee testimony limits the detail available, but the vote margins show the issue was politically contested.