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Texas SB 13 — Anti-Energy Boycott Law (2021)

  • Law: Texas Senate Bill 13, codified at Texas Government Code Chapter 809
  • Passed: June 2021
  • Vote: Texas Senate 21–10; Texas House 83–61
  • Signed by: Governor Greg Abbott
  • Status: Parts of related provisions faced legal challenge through 2026; core statute in effect

What It Does​

SB 13 prohibits Texas state governmental entities — including the $200+ billion Teacher Retirement System of Texas (TRS), the Employees Retirement System (ERS), and other state investment funds — from contracting with or investing in financial companies that "boycott" fossil fuel energy companies. Specifically:

  • The Texas Comptroller maintains a list of financial companies determined to be boycotting energy companies.
  • State pension funds and governmental entities must divest from listed companies within 180 days and cannot enter new contracts with them.
  • "Boycott" is defined as refusing to deal with, terminating business with, or taking adverse action against a fossil fuel company based on environmental, social, or governance (ESG) criteria.

BlackRock, BNY Mellon, Credit Suisse, Goldman Sachs, and others were placed on the initial blacklist. Several removed themselves by certifying they do not boycott fossil fuels.

Why Critics Oppose It​

  • Government punishing political and economic speech — Deciding not to invest in an industry for ESG reasons is a form of expressive conduct and economic association protected under the First Amendment. The law penalizes companies for exercising judgment about how to allocate capital.
  • Mirror image of anti-BDS laws — Texas simultaneously passed anti-BDS laws (penalizing boycotts of Israel) and this law (penalizing boycotts of fossil fuels). The principle in both cases is the same: government using public contracts to coerce private actors not to boycott politically favored industries or countries.
  • Fiduciary duty inversion — The law forces state pension fund managers to make investment decisions based on political loyalty to the fossil fuel industry rather than on risk-adjusted return for retirees. Studies found Texas pension funds lost hundreds of millions of dollars in bond market access costs as a result.
  • Viewpoint discrimination — The law penalizes one political/economic viewpoint (reducing fossil fuel investment) while not penalizing the opposite viewpoint (increasing fossil fuel investment). That is textbook viewpoint discrimination.
  • Chilling effect on markets — Several major banks withdrew from Texas municipal bond business rather than certify compliance, raising borrowing costs for Texas cities and school districts.

Constitutional Concerns​

  • 1st Amendment — penalizing private entities for engaging in expressive economic conduct (boycotts) based on viewpoint.
  • Contracts Clause — retroactive application to existing investment relationships.
  • Dormant Commerce Clause — state law distorting national capital markets by penalizing out-of-state investment decisions.

Key Votes to Screen​

Texas state legislature. Senate: 21–10. House: 83–61. This is a state-level vote — relevant for screening Texas state legislators and for identifying the template that other states (West Virginia, Kentucky, Louisiana, Oklahoma, and others) have copied.

For federal legislators, track their statements on ESG legislation and anti-boycott frameworks more broadly.

Why This Matters for We The Citizens​

Texas SB 13 is the flip side of anti-BDS laws: both use state contracting power to punish boycotts of politically favored entities. A politician who supported anti-BDS laws but opposed SB 13 (or vice versa) has an inconsistent position on whether boycotts are protected speech. This inconsistency is itself a useful screening signal.

See also: Bad Laws Overview | Anti-Boycott Israel Laws

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