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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
ENGROSSED SENATE
BILL NO. 527 By: Montgomery and Thompson of
the Senate
and
McEntire and Pae of the
House
[ public finance - Oklahoma Prosperity Act -
codification - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new sec tion of law to be codified
in the Oklahoma Statutes as Section 3600 of Title 62, unless there
is created a duplication in numbering, reads as follows:
This act shall be known and may be cited as the “Oklahoma
Prosperity Act”.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 3601 of Titl e 62, unless there
is created a duplication in numberi ng, reads as follows:
A. Implementation of this act shall be subject to the receipt
of appropriations su fficient to establish the Oklahoma Prosperity
Act Program, as defined in this section.
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B. As used in this act:
1. “Administrative fund” shall mean the Oklahoma Prosperity Act
administrative fund established under this act;
2. “Contribution rate” means the percentage of the wages of a
covered employee that is withheld from his or her wages and paid to
the individual retirement account or individual ret irement annuity
established for the cove red employee under the Program;
3. “Covered employee” means any individual who is eighteen (18)
years of age or older, who is employed by a participating employer
and who has wages that ar e allocable to the state. For pu rposes of
the investment, withdrawal, transfer, rollover, or other
distribution of an individual retirement account or individual
retirement annuity, the term covered employee also includes the
beneficiary of a deceased cove red employee;
4. “Participating employer” means an employer electing to
participate in the Oklahoma Prosperity Act Program that has not been
a participating or contributing employer in a retirement plan, an
automatic enrollment payroll deduction IRA, or a qualified
retirement plan in compliance with federal law for its employees
including plans qualified under Section 401(a), 401(k), 40 3(a),
403(b), 408(k), 408(p), 457(b), or 457(f) of Title 26 of the
Internal Revenue Code or any deferred compensation plan offered by
any employer at any time during the preceding two (2) calendar
years;
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5. “Employer” means a person or entity engaged in a business,
profession, trade, or other enterprise in the state, whether for
profit or not-for-profit, that employs one or more individuals in
the state; provided, that a federal or state e ntity, agency, or
instrumentality or any political subdivision thereof, shall not be
an employer;
6. “Enrollee” means any covered employee enrolle d in the
Oklahoma Prosperity Act Program;
7. “Internal Revenue Code” means the federal Internal Revenue
Code of 1986, as amended;
8. “Investment adviser” means either:
a. an investment adviser registered as such under the
U.S. Investment Advisers Act of 1940, or
b. a bank or other institution exempt from registration
under the U.S. Inves tment Advisers Act of 19 40;
9. “Investment fund” means each investment portfolio
established within the trust for investment purposes;
10. “IRA” means either an individu al retirement account or
individual retirement annuity established under Section 408 or 408A
of Title 26 of the Internal Revenue Code;
11. “Program” means the Oklahoma Prosperity Act Program
established under this act;
12. “State” means the State of Okla homa;
13. “State Treasurer” means the Oklahoma State Treasurer;
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14. “Trust” means the IRA retirement trust or annuity contract
established under Section 7 of this act;
15. “Trustee” means the trustee of the trust including an
insurance company issuing an annuity contract, selected under
Section 4 of this act; and
16. “Wages” means compensation within the mean ing of Section
219(f)(1) of Title 26 of the Internal Revenue Code that is received
by a covered employee from a participating employer.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes a s Section 3602 of Title 62, unless there
is created a duplication in numbering, reads as follows:
The State Treasurer shall have the following powers and duties
in implementing the provisions of this act:
1. To design, establish, and operate the Oklahoma P rosperity
Act Program in accordance with the requirements established in this
act;
2. To collect fees to defray the costs of administering th e
Program;
3. To enter into contracts necessary or desirable f or the
establishment and administration of the Prog ram;
4. To hire, retain, and terminate third-party service providers
for the Program including, but not limited to, consultants,
investment managers or advisors, trustee s, custodians, insurance
companies, record keepers, administrators, actuaries, counsel ,
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auditors, and other professionals; provided, that each service
provider shall be authorized to do business in this state. For
purposes of selecting a third-party service provider, the Office of
the State Treasurer shall be exempt from the Oklahoma Centra l
Purchasing Act; provided, that a competitive process shall be
developed and utilized to select service providers;
5. To determine the type or types of IRAs to be offer ed;
6. To employ a program administ rator and any other individuals
necessary to administer the Program and the administrative fund;
7. To develop and implement an outreach plan and disseminate
information regarding the Progra m and retirement and financial
education in general, to employees , employers, and other
constituents in the state;
8. To adopt rules and procedures for the establishment and
operation of the Program and to take such other actions as necessary
to operate the Program in accordance with the provisions of this
act. Any guidelines or procedure s affecting the Program may be
implemented after reasonable notice to the public and a public
comment period, in a manner similar to the requirements of the
Administrative Procedures Act. However, the Ad ministrative
Procedures Act shall not apply for purp oses of this section; and
9. If applicable, to establish and maintain the Program by
contracting with ano ther state, partnering with one or more states
to create a joint auto-IRA Program, allowing states to participate
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in the Program, or forming a consort ium with one or more other
states in which certain aspects of the Program of each state are
combined for administrative convenience and efficiency.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as S ection 3603 of Title 62, unless there
is created a duplication in numbering, reads as follows:
A. The trustee and each investment adviser shall be a fiduciary
with respect to the trust and IRAs establish ed and maintained under
the Oklahoma Prosperity Act Program.
B. Each participating employer shall be required to provide
covered employees with the information as required by the Program.
No employer acting pursuant to this act shall be considered a
fiduciary with respect to the trust o r an IRA or have fiduciary
responsibilities under the act.
C. Each fiduciary shall discharge its duties with respect to
the Program solely in the best interests of covered employees and
with the care, skill, prudence , and diligence under the prevailing
circumstances that a prudent person acti ng in a similar capacit y and
familiar with those matters would use in the conduct of an
enterprise of like character and aims.
SECTION 5. NEW LAW A new section o f law to be codified
in the Oklahoma Statutes as Section 3604 of Title 62, unless there
is created a duplication in numbering, reads as follows:
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The Oklahoma Prosperity Act Program shall be designed,
established, and operated in accordance with the followi ng
provisions:
1. Each participating employer may offer to each covered
employee an opportuni ty to contribute to an IRA established under
the Program for the benefit of the covered employee through
withholding from his or her wages. No employer shall be permitted
to contribute to the Program;
2. Unless the covered employee elects not to particip ate in the
Program, he or she may be automatically enrol led in the Program and
contributions shall be withheld from the wage s of the covered
employee;
3. The minimum contribution rate of each enrollee shall be
three percent (3%); the minimum contributio n rate shall be the
default contribution rate;
4. The IRAs shall qualify for favorable federal income tax
treatment under Sections 408 and 408A of Title 26, as app ropriate,
of the Internal Revenue Code;
5. Each participating employer shall deposit withheld
contributions of the enrollee under the Program with the trustee in
such manner as is determined by the State Treasurer ; provided, that
the employer shall delive r the amounts withheld to the trustee
within thirty (30) business days after the date the a mounts
otherwise would have been paid to the enrollee;
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6. Additional rules and procedures may be adopted in
conjunction with established IRS regulations for withdra wals,
distributions, transfers , and rollovers of IRAs and for the
designation of IRA beneficiaries;
7. Information regarding the Program shall be made available to
the public on a website maintained for the Program;
8. Audited financial reports shall be submitted to the Governor
and Legislature within two (2) years after the Program is
established and annually thereafter at the end of each fiscal year;
9. Each participating employer shall be provided information
regarding the Program and disclosures incl uding:
a. a description of the benefits and risk s associated
with investments offered in t he Program,
b. instructions about how to obtain addit ional
information about the Program,
c. a description of the federal and sta te income tax
consequences of an IRA, which may consist of or
include the disclosure statement required to be
distributed under the Internal Revenue Code and the
Treasury Regulations thereunder,
d. a statement that covered employees seeking financial
advice should contact their own financial advisors,
that participating employers shall not provi de
financial advice, and that participating employers are
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not liable for decisions covered employees m ake under
the act,
e. a statement that the Program is not an emp loyer-
sponsored retirement plan,
f. a statement that neither the Program nor the IRA of
the enrollee established under the Progra m is
guaranteed by the state,
g. a statement that neit her a participating employer nor
the state will monitor or has an obliga tion to monitor
the eligibility of t he covered employee under the
Internal Revenue Code to make contributions to an IRA
or to monitor whether the contribution of the enrollee
to the IRA established for the enrollee under the
Program exceeds the maximum pe rmissible IRA
contribution; it shall be the responsibility of the
covered employee, and
h. a statement that neither the state nor the
participating employer will have any liability with
respect to any failure of the covered employee to be
eligible to make IRA contributions or any contribution
in excess of the maximum IRA contribution;
10. Any information, forms , or instructions to be furnished to
covered employees that provide the c overed employee with the
procedures for:
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a. making contributions to the IRA of the covered
employee established under the Program including a
description of the minimum contribution rate and the
right to elect to make no contribution or to change
the contribution rate under the Program,
b. making an investment election with respe ct to the IRA
of the covered employee established under the Program
including a description of the default investment
fund, and
c. making transfers, rollovers, withdrawals, and other
distributions from the IRA of the covered employee;
11. Each participating employer shall deliver or facilita te the
delivery of the information about the Program t o each covered
employee at the time and in the manner as established by Program
guidelines; and
12. The Program shall be designed and operated in a manner that
will cause it not to be an employee benef it plan within the meaning
of Section 3(3) of the Empl oyee Retirement Income Security Act of
1974.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 3605 of Title 62, unless there
is created a duplication in numbering, reads as follows:
There is hereby created in the Office of the Sta te Treasurer a
fund to be designated as the “Oklahoma Prosperity Act Administrative
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Fund”. The fund shall be a continuing fu nd, not subject to fiscal
year limitations, and shall consist of monies appropriated for th e
administration of the Oklahoma Prosper ity Act Program, all
administrative fees collected, and any other monies designated to
the fund by law. All monies accruing t o the credit of the fund are
hereby appropriated and may be budgeted and expended by the St ate
Treasurer for expenses related to t he administration and support of
the Program. Expenditu res from the fund shall be made upon warrants
issued by the State Trea surer against claims filed as prescr ibed by
law with the Director of the Office of Manageme nt and Enterprise
Services for approval and payment.
SECTION 7. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Sectio n 3606 of Title 62, unless there
is created a duplication in numbering, reads as follows:
A. There is hereby created as an instr umentality of the state a
trust to be known as the “Oklahoma Prosperity Act Trust ”.
B. The State Treasurer may appoint qualifi ed financial
institutions to act as trustee or custodian of the IRA accounts.
C. The assets of IRAs established for covered empl oyees shall
be allocated to the trust and combined for in vestment purposes.
Trust assets shall be managed and administered for the purposes of
providing services to enrollees and defraying reasonable
administrative expenses of the Oklahoma Prosperity Ac t Program.
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D. There shall be established within th e trust one or more
investment funds. The first One Thousand Dollars ($1,000. 00) in
contributions made by, or on behalf of, an enrollee may be deposited
into a default capital preservation investment fund and the enrollee
may be provided an account revoca tion period during which, if the
enrollee chooses to end participation in the Program, the enrollee
may withdraw the deposited amounts from the default investmen t
without penalty.
E. Enrollees may allocate assets of their IRAs among investment
funds and a default investment fund may be designated for the IRAs
of enrollees who do not select an investment fund.
F. The State Treasurer may retain inv estment advisers to select
and manage the investments of investment funds on a discretionary
basis, subject to ongoing review and oversight.
G. The assets of the trust shall be maintained, invested, and
expended solely for the purposes of the trust and no property rights
therein shall exist in favor of the state or any participating
employer. Trust asset s shall not be transferred or used by the
state for any purposes other than the purpose s of the trust or
funding the expenses of operating the Program.
H. The assets of the trust shall be held separate an d apart
from the assets of the state.
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I. There shall be no liability for the state, the Program, the
State Treasurer, or any employer for investment losses incurred by
any covered employee as a result of partici pating in the Program.
J. The trust and each investment fund shall not be subject to
income tax of this state.
K. If the Program is established by using the IRA Program of
another state, a joint Program , or a consortium with one or more
other states, then the trust may be established by adoptin g the
trust established under the Program of the other state or states or
as a master trust or similar arrangement with the other state or
states; provided, that the trust, mas ter trust, or similar
arrangement satisfies the requirements of this section.
SECTION 8. NEW LAW A new sect ion of law to be codified
in the Oklahoma Statutes as Section 3607 of Title 62, unless ther e
is created a duplication in numb ering, reads as follows:
The Oklahoma Prosperity Act Program shall be established so that
enrollees may begin making contributions within twenty-four (24)
months of the effective date of this act; provided, that the State
Treasurer may extend the period within which the Program is
implemented by twelve (12) months. The St ate Treasurer may
establish a pilot program for certain participating employers, may
provide for a staggered rollout of the Program so that participating
employers may offer the Program to covered employees in stages based
on employee headcount o r other criteria, or both.
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SECTION 9. AMENDATORY 75 O.S. 2021, Section 250.4, is
amended to read as follows:
Section 250.4. A. 1. Except as is otherwise specifically
provided in this subsection, each agency is required to comply with
Article I of the Administrati ve Procedures Act.
2. The Corporation Commission shall be required to comply with
the provisions of Articl e I of the Administrative Procedures Act
except for subsections A, B, C, and E of Section 303 of this title
and Section 306 of this title. To the ex tent of any conflict or
inconsistency with Article I of the Administr ative Procedures Act,
pursuant to Section 35 of Article IX of the Oklahoma Constitution,
it is expressly declared that Article I of the Administrative
Procedures Act is an amendment to an d alteration of Sections 18
through 34 of Article IX of the Oklahoma Constitution.
3. The Oklahoma Military Department of the State of Oklahoma
shall be exempt from the provisions of Article I of the
Administrative Procedures Act to the extent it exercise s its
responsibility for military affairs. Military publications, as
defined in Section 801 o f Title 44 of the Oklahoma Statutes, sh all
be exempt from the provisions of Article I and Article II o f the
Administrative Procedures Act, except as provided in S ection 251 of
this title.
4. The Oklahoma Ordnance Works Authority, the Northeast
Oklahoma Public Facilities Authority, the Oklahoma Office of
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Homeland Security, and the Board of Trustees of the Oklahoma College
Savings Plan shall be exempt from Article I of the Administrative
Procedures Act.
5. The Transportation Commission and the Department of
Transportation shall be exempt from Art icle I of the Administrative
Procedures Act to the extent they exercise their authority in
adopting standard specification s, special provisions, plans, design
standards, testing procedures, federally imposed requireme nts and
generally recognized standards, project planning and programming,
and the operation and contr ol of the State Highway System.
6. The Oklahoma State Regen ts for Higher Education shall be
exempt from Article I of the Administrative Procedures Act wit h
respect to:
a. prescribing standards of higher education,
b. prescribing functions and courses of s tudy in each
institution to conform to the standards,
c. granting of degrees and other forms of academic
recognition for completion of the prescribed cours es,
d. allocation of state-appropriated funds, and
e. fees within the limits prescribed by the Legisl ature.
7. Institutional governing boards within The Oklahom a State
System of Higher Education shall be exempt from Article I of the
Administrative Procedu res Act.
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8. a. The Commissioner of Publ ic Safety shall be exempt from
Sections 303.1, 304, 307.1, 308 , and 308.1 of this
title insofar as it is necessary to prom ulgate rules
pursuant to the Oklahoma Motor Carrier Safety and
Hazardous Materials Transportatio n Act, to maintain a
current incorporation of federal motor carrier safety
and hazardous material re gulations, or pursuant to
Chapter 6 of Title 47 of the Oklah oma Statutes, to
maintain a current incorporation of federal commercial
driver license regulatio ns, for which the Commissioner
has no discretion when the state is mandated to
promulgate rules iden tical to federal rules and
regulations.
b. Such rules may be adopted by the Commissioner and
shall be deemed promulgated twenty (20) days after
notice of adoption is published in “The Oklahoma
Register”. Such publication need not set forth the
full text of the rule but may incorporate the federal
rules and regulations by reference.
c. Such copies of promulgated rules shall be filed with
the Secretary as requ ired by Section 251 of this
title.
d. For any rules for which the Commissioner has
discretion to allow variances, tolerances, or
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modifications from the federal rules and regulations,
the Commissioner shall fully comply with Article I of
the Administrative P rocedures Act.
9. The Council on Judic ial Complaints shall be exempt from
Section 306 of Article I of the Administrative Procedures Act, with
respect to review of the validity or applicability of a rule by an
action for declaratory judgment, or any other relief based upon the
validity or applicability of a rule, in the district court or by an
appellate court. A party aggrieved by the validity or applicability
of a rule made by the Council on Judicial Complaints may petition
the Court on the Judiciary to r eview the rules and issue opinions
based upon them.
10. The Department of Corrections, State Board of Corrections,
county sheriffs, and managers of city jails shall be exempt from
Article I of the Administrative Procedures Act with respect to:
a. prescribing internal management procedures for t he
management of the state prisons, county jails, and
city jails and for the management, supervision , and
control of all incarcerated prisoners, and
b. prescribing internal management procedures for the
management of the probation and parole unit of the
Department of Corrections and for the supervision of
probationers and parolees.
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11. The State Board of Education shall b e exempt from Article I
of the Administrative Procedures Act with respect to prescribing
subject matter standards as provided for in Sectio n 11-103.6a of
Title 70 of the Oklahoma Statutes.
B. As specified, the following agencies or classes of agency
activities are not required to comply with the provisions of Article
II of the Administrative Procedures Act:
1. The Oklahoma Tax Commission , except as provided in
subsection G of Section 1140 of Title 47 of the Oklahoma Statutes;
2. The Commission for Human Services;
3. The Oklahoma Ordnance Works Authority;
4. The Corporation Commission;
5. The Pardon and Parole Board;
6. The Midwestern Oklahoma Development Auth ority;
7. The Grand River Dam Authority;
8. The Northeast Oklaho ma Public Facilities Authority;
9. The Council on Judicial Complaint s;
10. The Board of Trustees of the Oklahoma College Savings Plan;
11. The supervisory or administrative agency of any penal,
mental, medical, or eleemosynary institution, only with resp ect to
the institutional supervision, custody, control, care, or treatment
of inmates, prisoners , or patients therein; provided, that the
provisions of Article II shall apply to and govern all
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administrative actions of the Oklahoma Alcohol Prevention, Traini ng,
Treatment and Rehabilitation Authority;
12. The Board of Regents or employees of any university,
college, or other institution of higher learning;
13. The Oklahoma Horse Racing Comm ission, its employees, or
agents only with respect to hearing and noti ce requirements on the
following classes of violations which are an i mminent peril to the
public health, safety , and welfare:
a. any rule regarding the running of a race,
b. any violation of medication laws and rules,
c. any suspension or revocation of an o ccupation license
by any racing jurisdiction recognized by the
Commission,
d. any assault or other destructive acts within
Commission-licensed premises,
e. any violation of prohibited d evices, laws, and rules,
or
f. any filing of false information;
14. The Commissioner of Public Safety only with respect to
driver license hearings and hearings conducted pursuant to the
provisions of Section 2 -115 of Title 47 of the Oklahoma Statutes;
15. The Administrator of the Depart ment of Securities only with
respect to hearings conducted pursuant to provisions of the Oklahoma
Take-over Disclosure Act of 1985;
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16. Hearings conducted by a public agency pursuant to Section
962 of Title 47 of the Oklah oma Statutes;
17. The Oklahoma Military Department of the State of Oklahoma ;
18. The University Hospitals Authority, including all hospitals
or other institutions o perated by the University Hospitals
Authority;
19. The Oklahoma Health Care Authority Boa rd and the
Administrator of the Oklahoma Health Care Autho rity; and
20. The Oklahoma Office o f Homeland Security; and
21. The State Treasurer with respect to the ad option of rules
and procedures for the implementation and operation of the Oklahoma
Prosperity Act pursuant to Section 1 of this act .
SECTION 10. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON BANKING, FINANCIAL SERVICES AND
PENSIONS, dated 04/12/2022 - DO PASS, As Amended.