Honorable Dan Patrick, Lieutenant Governor, Senate Honorable Dade Phelan, Speaker of the House, House of Representatives
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB13 by Birdwell (Relating to state contracts with and investments in certain companies that boycott energy companies.), Conference Committee Report
The fiscal impact of provisions that would prohibit certain state governmental entities from investing in financial companies that boycott energy companies and prohibit certain governmental entities from executing contracts with the same companies cannot be determined.
The bill would amend the Government Code to prohibit state agencies from contracting with or investing in financial companies that boycott fossil fuel-based energy firms.
The bill would require the Comptroller of Public Accounts (Comptroller) to prepare and maintain, and provide to each state governmental entity, a list of all financial companies that boycott energy companies. The bill would not apply to governmental entities that determine the requirements are inconsistent with constitutional or statutory duties related to the issuance, incurrence, or management of debt obligations or the deposit, custody, management, borrowing, or investment of funds. Under certain circumstances, the bill would require state pension systems and the Permanent School Fund to sell, redeem, divest, or withdraw publicly traded securities of a company that boycotts fossil fuel-based energy companies. The bill requires reporting and provides that the Attorney General may bring any action necessary to enforce Chapter 809, Government Code.
The fiscal impact of provisions that amend the Government Code by adding Chapters 809 and 2274, which would prohibit certain state governmental entities from investing in companies that boycott energy companies and prohibit certain governmental entities from executing contracts with the same companies, respectively, cannot be determined. According to the Employees Retirement System (ERS) the bill could have a negative indeterminate fiscal impact to the agency's programs and operations and potentially limits the return potential of ERS investments. Additional reporting and monitoring for companies that boycott certain energy companies could result in significant additional administrative resources, since the reporting and monitoring could be extensive. According to the Teachers Retirement System, the fiscal impact on the pension fund related to the provisions of the bill cannot be determined.
The Comptroller indicates that the agency would need to engage in significant effort to identify companies to which the bill's provisions would apply and that, as such, the agency could have significant administrative costs, but the costs cannot be estimated at this time.
The Office of the Attorney General indicates that any legal work resulting from the passage of this bill could be reasonably absorbed with current resources. The Texas Emergency Services Retirement System indicates that the implementation and on-going monitoring of the provisions of the bill would not have a fiscal impact to the agency, however the fiscal impact on the pension fund cannot be determined.
Local Government Impact
The fiscal implications of the bill cannot be determined at this time.
Source Agencies:
302 Office of the Attorney General, 304 Comptroller of Public Accounts, 323 Teacher Retirement System, 326 Tx Emergency Serv Retirement System, 327 Employees Retirement System