TX HB5260

Local governments would be restricted to investing public funds only in investment pools managed by the Texas Comptroller or the Texas Treasury Safekeeping Trust Company

Defines "restricted investment pool" as any investment pool not managed by the Comptroller or Texas Treasury Safekeeping Trust Company

Local governments with funds in restricted investment pools must divest at least 50% within 180 days of discovery and 100% within 360 days

Divestment may be delayed only if the local government demonstrates with clear and convincing evidence that divesting would likely result in a loss in value or benchmark deviation, requiring a report to legislative leaders, the attorney general, and comptroller with updates every six months

Applies only to contracts entered into on or after September 1, 2025; existing contracts remain governed by prior law