S.B. No. 667 introduces Chapter 809A to the Texas Government Code, which prohibits state governmental entities from investing in certain "Chinese-affiliated entities." These entities are defined as publicly traded organizations incorporated or headquartered in the People's Republic of China, or those controlled by the Chinese government and identified as needing to support state intelligence work. The bill mandates that state entities divest from these restricted entities within specified timeframes and report their holdings to the comptroller. It also provides legal protections for these entities and their employees against lawsuits related to compliance with the new law, including indemnification for damages and legal costs.

The bill allows state governmental entities to delay divestment if they believe, in good faith, that it may result in a loss of value or benchmark deviation, requiring them to report justifications to the legislature and attorney general. It exempts indirect holdings in certain investment funds from divestment requirements while mandating that fund managers be requested to remove restricted entities. Additionally, the bill outlines conditions for ceasing divestment, prohibits acquiring securities of restricted entities, and requires annual compliance reporting. The provisions of this act are set to take effect on September 1, 2025.

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