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52 | 52 | | |
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53 | 53 | | STATE OF OKLAHOMA |
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54 | 54 | | |
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55 | 55 | | 1st Session of the 59th Legislature (2023) |
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56 | 56 | | |
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57 | 57 | | SENATE BILL 469 By: Paxton |
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58 | 58 | | |
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59 | 59 | | |
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60 | 60 | | |
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61 | 61 | | |
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62 | 62 | | |
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63 | 63 | | AS INTRODUCED |
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64 | 64 | | |
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65 | 65 | | An Act relating to state government; creating the |
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66 | 66 | | Higher Education Energy Discriminati on Elimination |
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67 | 67 | | Act of 2023; providing short title; amending Section |
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68 | 68 | | 3, Chapter 231, O.S.L. 2022 (74 O.S. Supp. 2022, |
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69 | 69 | | Section 12003), which relates to requirements, |
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70 | 70 | | procedures, and limita tions; requiring State |
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71 | 71 | | Treasurer to prepare certain list for higher |
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72 | 72 | | education entities; subjecting hi gher education |
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73 | 73 | | entities to requirements of the Energy Discrimination |
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74 | 74 | | Elimination Act of 2022; defining terms; exempting |
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75 | 75 | | certain entities from provisions of act due to |
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76 | 76 | | statutory obligations; providing indemnification for |
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77 | 77 | | certain entities; prohibiting certai n persons and |
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78 | 78 | | entities from entering into a lawsuit with state or |
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79 | 79 | | state affiliate; providing any person entering a |
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80 | 80 | | lawsuit against state or state affiliate pursuant to |
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81 | 81 | | this act be subject to certain costs and fees; |
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82 | 82 | | requiring report to certain public offici als upon |
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83 | 83 | | decision to cease divestment from certain financial |
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84 | 84 | | company; providing for publishing of report by state |
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85 | 85 | | governmental entities to certain public officials; |
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86 | 86 | | updating statutory language; providing for |
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87 | 87 | | codification; and providing an effective date . |
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88 | 88 | | |
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91 | 91 | | |
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94 | 94 | | |
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95 | 95 | | BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: |
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96 | 96 | | |
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97 | 97 | | |
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146 | 146 | | |
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147 | 147 | | SECTION 1. NEW LAW A new section of law to be codified |
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148 | 148 | | in the Oklahoma Statutes as Section 12011 of Title 74, unless there |
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149 | 149 | | is created a duplication in numbering, reads as follows: |
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150 | 150 | | This act shall be known and may be cited as the “Higher |
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151 | 151 | | Education Energy Discrimination Elimination Act of 2023 ”. |
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152 | 152 | | SECTION 2. AMENDATORY Section 3, Chapter 231, O.S.L. |
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153 | 153 | | 2022 (74 O.S. Supp. 2022, Section 12003), is amended to read as |
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154 | 154 | | follows: |
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155 | 155 | | Section 12003. A. 1. The State Treasurer shall prepare and |
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156 | 156 | | maintain and provide to each state governmental entity and higher |
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157 | 157 | | education entity pursuant to the provisions of the Higher Education |
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158 | 158 | | Energy Discrimination Elimi nation Act of 2023 a list of financial |
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159 | 159 | | companies that boycott energy companies. In maintaining the list, |
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160 | 160 | | the Treasurer may: |
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161 | 161 | | a. review and rely, as a ppropriate in the Treasurer’s |
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162 | 162 | | judgment, on publicly available inform ation regarding |
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163 | 163 | | financial companies inc luding information provided by |
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164 | 164 | | the state, nonprofit organizations, research firms, |
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165 | 165 | | international organizations, and governmental |
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166 | 166 | | entities, and |
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167 | 167 | | b. request written verification from a financial company |
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168 | 168 | | that it does not boycott energy companies and rely, as |
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169 | 169 | | appropriate in the Treasurer’s judgment and without |
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170 | 170 | | conducting further investigation, resear ch, or |
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171 | 171 | | |
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172 | 172 | | |
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221 | 221 | | |
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222 | 222 | | inquiry, on a financial company ’s written response to |
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223 | 223 | | the request. |
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224 | 224 | | 2. A financial company that fails to provide to t he Treasurer a |
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225 | 225 | | written verification under subparagraph b of paragraph 1 of this |
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226 | 226 | | subsection before the sixty-first day after receivin g the request |
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227 | 227 | | from the Treasurer is presumed to be boyco tting energy companies. |
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228 | 228 | | 3. The Treasurer shall update the list ann ually or more often |
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229 | 229 | | as the Treasurer considers necessary, but not more often than |
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230 | 230 | | quarterly, based on information from, among other s ources, those |
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231 | 231 | | listed in subparagraph a of paragraph 1 o f this subsection. |
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232 | 232 | | 4. Not later than the thirtieth day after the date the list of |
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233 | 233 | | financial companies that bo ycott energy companies is first provided |
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234 | 234 | | or updated, the Treasurer shall file the list with the presiding |
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235 | 235 | | officer of each house of the Legislature and the Attorney General |
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236 | 236 | | and post the list on a publicly available Internet website. |
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237 | 237 | | 5. The Treasurer may retain third-party consultants to assist |
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238 | 238 | | in the implementation of the provisions of this act. |
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239 | 239 | | B. Not later than the thirtieth day after the date a state |
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240 | 240 | | governmental or higher education entity receives the list provided |
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241 | 241 | | under paragraph 1 of subsection A of this section, the state |
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242 | 242 | | governmental or higher education entity shall notify the Treasurer |
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243 | 243 | | of the listed financial companies in which the state governmental or |
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244 | 244 | | higher education entity owns direct holdings or indirect holdings. |
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245 | 245 | | |
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246 | 246 | | |
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295 | 295 | | |
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296 | 296 | | C. 1. For each listed financial company identified under |
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297 | 297 | | paragraph 1 of subsection A of this section, the state governmental |
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298 | 298 | | or higher education entity shall send a written notice: |
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299 | 299 | | a. informing the financial company of its status as a |
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300 | 300 | | listed financial company, |
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301 | 301 | | b. warning the financial company that it may become |
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302 | 302 | | subject to divestment by state governmental or higher |
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303 | 303 | | education entities after the expiration of the period |
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304 | 304 | | described by paragraph 2 of this subsection, and |
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305 | 305 | | c. offering the financial company the opportunity to |
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306 | 306 | | clarify its activities related to companies described |
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307 | 307 | | by paragraph 1 of subsection A of this section. |
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308 | 308 | | 2. Not later than the ninetieth day after the date the |
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309 | 309 | | financial company rec eives notice under paragraph 1 of this |
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310 | 310 | | subsection, the financial company shall cease boycotting energy |
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311 | 311 | | companies to avoid qualifying for divestment by state governmental |
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312 | 312 | | or higher education entities. |
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313 | 313 | | 3. If, during the time provided by paragraph 2 of this |
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314 | 314 | | subsection, the financial company ceases boy cotting energy |
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315 | 315 | | companies, the Treasurer shall remove the financial company from the |
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316 | 316 | | list maintained under paragraph 1 of subsection A of this section , |
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317 | 317 | | and this subsection will no longer apply to the financial compa ny |
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318 | 318 | | unless it resumes boycotting energy com panies. |
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319 | 319 | | |
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320 | 320 | | |
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370 | 370 | | 4. If, after the time provided by paragraph 2 of this |
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371 | 371 | | subsection expires, the financial company continues to boycott |
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372 | 372 | | energy companies, the state governmental or higher education entity |
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373 | 373 | | shall sell, redeem, divest, or withdraw all publicly trade d |
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374 | 374 | | securities of the fina ncial company, except securities described by |
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375 | 375 | | subsection E of this section, according to the schedule provided |
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376 | 376 | | under subsection D of this section. |
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377 | 377 | | D. 1. A state governmental or higher education entity required |
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378 | 378 | | to sell, redeem, divest, or withdraw all publicly traded securities |
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379 | 379 | | of a listed financial company shall comply with the following |
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380 | 380 | | schedule: |
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381 | 381 | | a. at least fifty percent (50%) of thos e assets shall be |
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382 | 382 | | removed from the state governmental or higher |
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383 | 383 | | education entity’s assets under management not later |
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384 | 384 | | than the one-hundred-eightieth day after the date the |
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385 | 385 | | financial company receives notice pursuant to |
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386 | 386 | | paragraph 1 of subsection C of this section unless the |
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387 | 387 | | state governmental entity determines, based on a good- |
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388 | 388 | | faith exercise of its fiduciary discretion and subject |
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389 | 389 | | to subparagraph b of this subsection, that a later |
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390 | 390 | | date is more prudent, and |
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391 | 391 | | b. one hundred percent (100%) of those assets shall be |
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392 | 392 | | removed from the state governmental or higher |
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393 | 393 | | education entity’s assets under management not later |
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444 | 444 | | |
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445 | 445 | | than the three-hundred-sixtieth day after the date the |
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446 | 446 | | financial company receives notice pursuant to |
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447 | 447 | | paragraph 1 of subsection C of this section. |
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448 | 448 | | 2. If a financial company that ceased boycottin g energy |
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449 | 449 | | companies after receiving notice pursuant to paragraph 1 of |
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450 | 450 | | subsection C of this section resumes its bo ycott, the state |
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451 | 451 | | governmental or higher education entity shall send a written notice |
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452 | 452 | | to the financial company informing it that the state governmental or |
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453 | 453 | | higher education entity will sell, redeem, divest, or withdraw all |
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454 | 454 | | publicly traded securities of th e financial company according to the |
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455 | 455 | | schedule in paragraph 1 of subsection D of this section. |
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456 | 456 | | 3. Except as provided b y paragraph 1 of subsection D of this |
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457 | 457 | | section, a state governmental or higher education entity may delay |
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458 | 458 | | the schedule for divestment under th at subsection only to the extent |
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459 | 459 | | that the state governmental or higher education entity determines, |
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460 | 460 | | in the state governmental or higher education entity’s good-faith |
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461 | 461 | | judgment, and consistent with the entity’s fiduciary duty, that |
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462 | 462 | | divestment from listed financial companies will likely result in a |
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463 | 463 | | loss in value or a benchmark deviation described by paragraph 1 of |
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464 | 464 | | subsection F of this se ction. |
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465 | 465 | | 4. If a state governmental or higher education entity delays |
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466 | 466 | | the schedule for divestment, the state governmental or higher |
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467 | 467 | | education entity shall submit a report to the Treasurer, the |
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468 | 468 | | presiding officer of each hous e of the Legislature, and the Attorney |
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469 | 469 | | |
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470 | 470 | | |
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519 | 519 | | |
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520 | 520 | | General stating the reasons and justification for the delay in |
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521 | 521 | | divestment by the state governmental or higher education entity from |
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522 | 522 | | listed financial companies. The report shall include documentation |
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523 | 523 | | supporting its determination that the divestment would result in a |
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524 | 524 | | loss in value or a benchmark deviation descri bed by paragraph 1 of |
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525 | 525 | | subsection F of this section including objective numerical |
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526 | 526 | | estimates. The state governmental or higher education entity shall |
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527 | 527 | | update the report every six (6) months. |
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528 | 528 | | E. A state governmental or higher education entity is not |
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529 | 529 | | required to divest from any indirect holdings i n actively or |
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530 | 530 | | passively managed investment funds or private equity funds. The |
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531 | 531 | | state governmental or higher education entity shall submit letters |
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532 | 532 | | to the managers of each investment fund cont aining listed financial |
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533 | 533 | | companies requesting that they remove t hose financial companies from |
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534 | 534 | | the fund or create a similar actively or passively managed fund with |
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535 | 535 | | indirect holdings devoid of listed financial companies. If a |
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536 | 536 | | manager creates a similar fund w ith substantially the same |
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537 | 537 | | management fees and same level of in vestment risk and anticipated |
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538 | 538 | | return, the state governmental or higher education entity may |
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539 | 539 | | replace all applicable investments with investments in the similar |
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540 | 540 | | fund in a time frame consistent wi th prudent fiduciary standards b ut |
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541 | 541 | | not later than the four-hundred-fiftieth day after the date the fund |
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542 | 542 | | is created. |
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543 | 543 | | |
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593 | 593 | | |
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594 | 594 | | F. 1. A state governmental or higher education entity may |
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595 | 595 | | cease divesting from one or more listed financial companies only if |
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596 | 596 | | clear and convincing evidence shows that: |
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597 | 597 | | a. the state governmental or higher education entity has |
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598 | 598 | | suffered or will suffer a loss in the value of assets |
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599 | 599 | | under management by the state governmental or higher |
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600 | 600 | | education entity as a result of having to divest from |
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601 | 601 | | listed financial companies under this subsection, or |
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602 | 602 | | b. an individual portfolio that uses a benchmark-aware |
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603 | 603 | | strategy would be subject to an aggregate expected |
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604 | 604 | | deviation from its benchmark as a result of having to |
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605 | 605 | | divest from listed financial companies under this |
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606 | 606 | | subsection. |
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607 | 607 | | 2. A state governmental or higher education entity may cease |
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608 | 608 | | divesting from a listed financial company as provided by this |
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609 | 609 | | section only to the extent n ecessary to ensure that the state |
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610 | 610 | | governmental or higher education entity does not suffer a loss in |
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611 | 611 | | value or deviate from its benchmark as described by paragraph 1 of |
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612 | 612 | | this subsection. |
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613 | 613 | | 3. Before a state governmental or higher education entity may |
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614 | 614 | | cease divesting from a listed financial company u nder this section, |
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615 | 615 | | the state governmental or higher education entity shall provide a |
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616 | 616 | | written report to the Treasurer, the presiding officer of each house |
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617 | 617 | | of the Legislature, and the Attorney General setting forth the |
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668 | 668 | | |
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669 | 669 | | reason and justification, supported by clear and convincing |
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670 | 670 | | evidence, for deciding to cease divestment or to remain invested in |
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671 | 671 | | a listed financial company. The state governmental or higher |
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672 | 672 | | education entity shall update the report required by this subsection |
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673 | 673 | | semiannually, as applicable. |
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674 | 674 | | 4. This section does not apply to reinvestment in a financial |
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675 | 675 | | company that is no longer a listed financial company. |
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676 | 676 | | G. Except as provided in subsection F of this section, a state |
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677 | 677 | | governmental or higher education entity shall not acquire securities |
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678 | 678 | | of a listed financial company. |
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679 | 679 | | SECTION 3. NEW LAW A new section of law to be codified |
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680 | 680 | | in the Oklahoma Statute s as Section 12012 of Title 74, unless there |
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681 | 681 | | is created a duplication in numbering, reads as follows: |
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682 | 682 | | A. As used in the Higher Education Energy Discrimination |
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683 | 683 | | Elimination Act of 2023: |
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684 | 684 | | 1. “Boycott energy company” means, without an ordinary business |
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685 | 685 | | purpose, refusing to deal with, terminating bus iness activities |
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686 | 686 | | with, or otherwise taking any action that is inte nded to penalize, |
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687 | 687 | | inflict economic harm on, or limit commercial relations with a |
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688 | 688 | | company because the company: |
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689 | 689 | | a. engages in the exploration, producti on, utilization, |
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690 | 690 | | transportation, sale, or manufacturing of fossil-fuel- |
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691 | 691 | | based energy and does not commit or pledge to meet |
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742 | 742 | | |
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743 | 743 | | environmental standards beyond applicable federal and |
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744 | 744 | | state law, or |
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745 | 745 | | b. does business with a company descri bed by subparagraph |
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746 | 746 | | a of this paragraph; |
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747 | 747 | | 2. “Company” means a for-profit sole proprietorship, |
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748 | 748 | | organization, association, corporation, partnership, joint venture, |
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749 | 749 | | limited partnership, limited liability partnership, or limited |
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750 | 750 | | liability company, including a wholly owned subsidiary, ma jority- |
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751 | 751 | | owned subsidiary, parent company, or affiliate of those entities or |
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752 | 752 | | business associations, that exis ts to make a profit; |
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753 | 753 | | 3. “Treasurer” means the State Treasurer or his or her |
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754 | 754 | | designee; |
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755 | 755 | | 4. “Direct holdings” means, with respect to a financial |
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756 | 756 | | company, all securities of that financial company h eld directly by a |
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757 | 757 | | state governmental entity in an account or fund in which a state |
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758 | 758 | | governmental entity owns all shares or interests; |
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759 | 759 | | 5. “Financial company” means a publicly traded fi nancial |
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760 | 760 | | services, banking, or investment company; |
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761 | 761 | | 6. “Higher education entity” means the Oklahoma State Regents |
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762 | 762 | | for Higher Education and any educat ional institution under the |
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763 | 763 | | jurisdiction of the Oklahoma State Regents for Higher Education; |
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764 | 764 | | 7. “Indirect holdings” means, with respect to a financial |
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765 | 765 | | company, all securities of that fi nancial company held in an account |
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766 | 766 | | or fund, such as a mutual fund, managed by o ne or more persons not |
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768 | 768 | | |
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817 | 817 | | |
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818 | 818 | | employed by a state governmental entity, in which the state |
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819 | 819 | | governmental entity owns shares or interest s together with other |
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820 | 820 | | investors not subject to the provisions of this act. The term does |
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821 | 821 | | not include money invested under a plan described by Section 401(k) |
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822 | 822 | | or 457 of the Internal Revenue Code of 1986; and |
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823 | 823 | | 8. “Listed financial company” means a financial company listed |
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824 | 824 | | by the Treasurer. |
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825 | 825 | | B. With respect to actions taken in compliance with the Higher |
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826 | 826 | | Education Energy Discrimination E limination Act of 2023, including |
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827 | 827 | | all good-faith determinations regarding financial compani es as |
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828 | 828 | | required by this act, a highe r education entity and the Treasurer |
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829 | 829 | | are exempt from any conflicting statutory or common law obligations |
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830 | 830 | | including any obligations with respect to making investments, |
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831 | 831 | | divesting from any investment, preparing or maintainin g any list of |
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832 | 832 | | financial companies, or choosing asset managers, investment funds, |
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833 | 833 | | or investments for the higher education entity ’s securities |
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834 | 834 | | portfolios. |
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835 | 835 | | C. In a cause of action based on an action, inaction, decision, |
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836 | 836 | | divestment, investment, financial comp any communication, report, or |
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837 | 837 | | other determination made or taken in connection with the Higher |
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838 | 838 | | Education Energy Discrimination E limination Act of 202 3, the state |
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839 | 839 | | shall indemnify and hold harmless for actual damages, court costs, |
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840 | 840 | | and attorney fees adjudged a gainst, and defend: |
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841 | 841 | | |
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842 | 842 | | |
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891 | 891 | | |
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892 | 892 | | 1. An employee, a member of the governing body, or any other |
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893 | 893 | | officer of a higher education entity; |
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894 | 894 | | 2. A contractor of a higher education entity; |
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895 | 895 | | 3. A former employee, a former member of the governing body, or |
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896 | 896 | | any other former officer o f a higher education entity w ho was an |
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897 | 897 | | employee, member of the governing body, or ot her officer when the |
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898 | 898 | | act or omission on whi ch the damages are based occurred; |
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899 | 899 | | 4. A former contractor of a higher education entity who was a |
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900 | 900 | | contractor when the act or omis sion on which the damages are based |
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901 | 901 | | occurred; and |
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902 | 902 | | 5. A higher education entity. |
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903 | 903 | | D. 1. Any person to which the Higher Education Energy |
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904 | 904 | | Discrimination Elimination Act of 2023 applies, an association, a |
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905 | 905 | | research firm, a financial company, or any other person shall not |
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906 | 906 | | sue or pursue a priv ate cause of action against the state, higher |
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907 | 907 | | education entity, a current or former employee, a member of the |
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908 | 908 | | governing body, or any ot her officer of a higher education entity, |
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909 | 909 | | or a contractor of a higher education entity, for any clai m or cause |
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910 | 910 | | of action, including breach of fiduciary duty, or for v iolation of |
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911 | 911 | | any constitutional, statutory, or regulatory requireme nt in |
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912 | 912 | | connection with any action, inaction, decision, divestment, |
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913 | 913 | | investment, financial company communication, report, or ot her |
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914 | 914 | | determination made or taken in connection with this act. |
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915 | 915 | | |
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916 | 916 | | |
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965 | 965 | | |
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966 | 966 | | 2. A person who files suit again st the state, a higher |
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967 | 967 | | education entity, an employee, a member of the governing body, or |
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968 | 968 | | any other officer of a higher education entity, or a contractor of a |
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969 | 969 | | higher education entity, is liable for paying the costs and attorney |
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970 | 970 | | fees of a person sued in viol ation of this section. |
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971 | 971 | | 3. A higher education entity shall not be subject to any |
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972 | 972 | | requirement of this act if the higher education entity determines |
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973 | 973 | | that such requirement would be incon sistent with its fiduciary |
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974 | 974 | | responsibility with respect to the investment of entity assets or |
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975 | 975 | | other duties imposed by law relating to th e investment of entity |
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976 | 976 | | assets. |
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977 | 977 | | SECTION 4. NEW LAW A new section of law to be codified |
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978 | 978 | | in the Oklahoma Statutes as Section 12013 of Title 74, unless there |
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979 | 979 | | is created a duplication in numbering, reads as follows: |
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980 | 980 | | A. Not later than January 1 of each year, each higher education |
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981 | 981 | | entity shall file a publicly available r eport with the Treasurer, |
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982 | 982 | | the presiding officer of each house of t he Legislature, and the |
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983 | 983 | | Attorney General tha t: |
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984 | 984 | | 1. Identifies securities sold, redeemed, divested, or withdrawn |
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985 | 985 | | in compliance with subsection D of Section 12003 of Title 74 of the |
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986 | 986 | | Oklahoma Statutes; |
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987 | 987 | | 2. Identifies prohibited investments under subsection F of |
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988 | 988 | | Section 12003 of Title 74 of the Oklahoma Statutes ; and |
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989 | 989 | | |
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990 | 990 | | |
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1040 | 1040 | | 3. Summarizes any changes made under subse ction E of Section |
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1041 | 1041 | | 12003 of Title 74 of the Oklaho ma Statutes. |
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1042 | 1042 | | B. The Attorney General may bring any ac tion necessary to |
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1043 | 1043 | | enforce the Higher Education Energy Discrimination E limination Act |
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1044 | 1044 | | of 2023. |
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1045 | 1045 | | SECTION 5. This act shall become effective November 1, 2023. |
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1046 | 1046 | | |
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1047 | 1047 | | 59-1-1500 RD 1/17/2023 1:03:59 PM |
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