TEXAS, USA — Senate Bill 13 prohibits state entities in Texas from investing in financial companies that "boycott energy companies." The Act first took effect September 1, 2021.
However, on August 29, 2024, the American Sustainable Business Council (ASBC) filed a lawsuit against Glenn Hegar, the Texas Comptroller of Public Accounts and Texas Attorney General Ken Paxton over SB-13.
The state defines, "boycott energy company," as follows:
"[...] without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company because the company: (A) Engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge to meet environmental standards beyond applicable federal and state law; or (B) does business with a company described by Paragraph (A)." - State of Texas
The ASBC filed the lawsuit against the state accusing SB-13 of violating the First Amendment.
According to the lawsuit, it accuses the Act of infringing the rights of free speech under a "viewpoint discrimination."
It's also challenging SB-13 under the argument it violates the Fourteenth Amendment "because it encourages arbitrary enforcement and fails to give regulated entities fair notice of prohibited conduct."
Under the Act, the Texas Comptroller of Public Accounts created a list of publicly traded investment companies and funds whose policies the state designated as "boycotting" fossil fuels.
As of August 2, 2024, 17 financial companies and more than 350 investment funds are blacklisted.