Oklahoma 2023 Regular Session

Oklahoma Senate Bill SB582 Latest Draft

Bill / Introduced Version Filed 01/17/2023

                             
 
 
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STATE OF OKLAHOMA 
 
1st Session of the 59th Legislature (2023) 
 
SENATE BILL 582 	By: Montgomery 
 
 
 
 
 
AS INTRODUCED 
 
An Act relating to public finance; creati ng the 
Oklahoma Prosperity Act; providing short title; 
making act contingent on certain appropriation; 
defining terms; requiring State Treasurer to develop 
and operate the Oklahoma Prosperity Act Program in 
accordance with stated requirements; establishing 
certain persons as fiduciary for accounts established 
under Program; exempting certain pers ons from 
fiduciary duty; providing standard of fiduciary duty; 
establishing mandates for designing and operating 
program; authorizing adoption of certain rules; 
creating the Oklahoma Prosperity Act Administrative 
Fund; specifying terms of the fund; creatin g the 
Oklahoma Prosperity Act Trust; authorizing Treasurer 
to appoint certain persons as trustee or custodian; 
requiring assets of certain IRAs be allocated to 
trust and managed for certain purpose; requiring 
establishment of at least one investment fund w ithin 
the trust; establishing terms of investment funds; 
authorizing Treasurer to hire investment advisers for 
certain purpose; specifying terms of trust 
maintenance and invest ments; requiring trust assets 
be held separate from state assets; prohibiting 
liability of state for trust; exempting trust monies 
from state income tax; authorizing trust to be 
established by adoption of f und of other state in 
certain circumstances; requi ring program be 
established in certain time frame; a uthorizing 
Treasurer to extend time frame; authorizing Treasurer 
to establish pilot program or rollouts for 
implementing act; amending 75 O.S. 2021, Section 
250.4, which relates to the Administrative Proc edures 
Act; providing exemption for certain activiti es; 
updating statutory langu age; providing for   
 
 
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noncodification; providing for codification; and 
providing an effective d ate. 
 
 
 
 
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: 
SECTION 1.     NEW LAW     A new section of law not to be 
codified in the Oklahoma Statutes 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 3600 of Title 62, unless there 
is created a duplication in numb ering, reads as follows: 
A.  Implementation of this act shall be subject to the receipt 
of appropriations sufficient to establi sh the Oklahoma Prosperity 
Act Program, as defin ed in this section. 
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 th e wages of a 
covered employee that is withheld f rom his or her wages and paid to 
the individual retirement account or individual re tirement annuity 
established for the covered employee under the Program; 
3.  "Covered employee" means any individual who is e ighteen (18) 
years of age or older, who is emplo yed by a participating employ er 
and who has wages that are allocable to the state. For purposes of   
 
 
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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 deceas ed covered employee; 
4.  "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 indiv iduals in 
the state; provided, that a federal or st ate entity, agency, or 
instrumentality or any political subdivision thereof, shall not be 
an employer; 
5.  "Enrollee" means any covered employee enrolled in the 
Oklahoma Prosperity Act Program; 
6.  "Internal Revenue Code" means the federal Internal Revenue 
Code of 1986, as amended; 
7.  "Investment adviser" means either: 
a. an investment advise r registered under the U.S. 
Investment Advisers Act of 1940, or 
b. a bank or other institution ex empt from registration 
under the U.S. Investment Advisers Act of 1940; 
8.  "Investment fund" means each investment portfolio 
established within the tru st for investment purposes; 
9.  "IRA" means either an individual retirement account or 
individual retirement annuity establi shed under Section 408 or 408A 
of Title 26 of the I nternal Revenue Code;   
 
 
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10.  "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 retireme nt 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), 403(a), 
403(b), 408(k), 408(p), 457(b), or 457(f) of Title 26 of the 
Internal Revenue Code or any deferred compensa tion plan offered by 
any employer at any time during the preceding two (2) calendar 
years; 
11.  "Program" means the Oklahoma Prosperity Act Program 
established under this act; 
12.  "State" means the State of Oklahoma; 
13.  "State Treasurer" means the Oklahoma State Treasurer; 
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 is suing an annuity contract selected under Section 
4 of this act; and 
16.  "Wages" means compensation within the meaning of Section 
219(f)(1) of Title 26 of the Internal Revenue Code that is received 
by a covered employee from a participating employer.   
 
 
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SECTION 3.     NEW LAW     A new section of law to be codified 
in the Oklahoma Statutes as Section 3601 of Title 62, unless there 
is created a duplication in numb ering, reads as follows: 
The State Treasurer shall have the following powers and du ties 
in implementing the prov isions of this act: 
1. To design, establish, and oper ate the Oklahoma Prosperity 
Act Program in accordance with the requirements established in this 
act; 
2.  To collect fees to defray the costs of a dministering the 
Program; 
3. To enter into contracts nec essary or desirable fo r the 
establishment and administ ration of the Program; 
4.  To hire, retain, and termin ate third-party service providers 
for the Program including, but not limited to, consultant s, 
investment managers or ad visors, trustees, custodians, insurance 
companies, record keepers, administrators, actuaries, counsel, 
auditors, and other professionals; provided, that each service 
provider shall be authorized to do business in this state.  Fo r 
purposes of selecting a th ird-party service provider, t he Office of 
the State Treasurer shall be exempt from the Oklahoma Central 
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 offered;   
 
 
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6.  To employ a program adminis trator and any other individuals 
necessary to administer the Progr am and the administr ative fund; 
7.  To develop and implement an outreach plan and disseminate 
information regarding the Program and retirem ent and financial 
education in general, to employee s, employers, and other 
constituents in the state; 
8.  To adopt rules and procedures f or 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 procedures affectin g the Program may be 
implemented after reasonable noti ce to the public and a public 
comment period, in a manner similar to the requirements of the 
Administrative Procedures Act.  However, the A dministrative 
Procedures Act shall not apply for purposes of th is section; and 
9.  If applicable, to establish and maintain the Program by 
contracting with another state, partnering with one or more states 
to create a joint auto -IRA program, allowing state s to participate 
in the Program, or forming a consortium with o ne or more other 
states in which certain aspects of th e 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 Section 3602 of Title 62, unless there 
is created a duplication in numb ering, reads as follows:   
 
 
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A.  The trustee and each investment adviser shall be a fiduciary 
with respect to the tru st and IRAs established and m aintained under 
the Oklahoma Prosperity Act Program. 
B.  Each participating employer shall be required to provide 
covered employees with the in formation as required by the Program.  
No employer acting pursuant to this act shall be considered a 
fiduciary with respect to the trust or 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 diligenc e under the prevailing 
circumstances that a prudent pe rson acting in a similar capacity and 
familiar with those matters would use in the conduc t of an 
enterprise of like character and aims. 
SECTION 5.     NEW LAW     A new section of law to be codified 
in the Oklahoma Statutes as Section 3603 of Title 62, unless there 
is created a duplication in numb ering, reads as follows: 
The Oklahoma Prosperity Act Program shall b e 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 employ ee through   
 
 
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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 fro m the wages 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 Reve nue Code; 
5.  Each participating employer shall deposit withheld 
contributions of the enrollee under the Program with the trustee in 
such manner as is determi ned by the State Tre asurer; 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; 
6.  Additional rules and procedures may be adopted in 
conjunction with established Internal Revenue Service (I RS) 
regulations for withdrawals, 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;   
 
 
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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 inform ation 
regarding the Program and disclosures including: 
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 fede ral and state 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 em ployees seeking fina ncial 
advice should contact their own financial advisors, 
that participating employers shall not provi de 
financial advice, and that participating employers are 
not liable for decisions covered employees m ake under 
the act, 
e. a statement that the Program i s not an employer- 
sponsored retirement plan,   
 
 
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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 h as an obligation to monitor 
the eligibility of the 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 permissible 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 e mployee 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: 
a. making contributions to the IRA of the covered 
employee established under the Program including a 
description of the minimum contribution rate and the   
 
 
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right to elect to make no contribution or to change 
the contribution rate under the Program, 
b. making an investment election with respect 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 facilitate 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 benefit 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 Se ction 3604 of Title 62, unless there 
is created a duplication in numbering, reads as follows: 
There is hereby created in the Office of the State Treasurer a 
fund to be designated as the "Oklahoma Prosperity Act Administrative 
Fund".  The fund shall be a co ntinuing fund, not subject to fiscal 
year limitations, and shall consist of monies appropriated for the 
administration of the Oklahoma Prosperity Act Prog ram, all   
 
 
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administrative fees collected, and any other monies designated to 
the fund by law.  All monie s accruing to the credit of t he fund are 
hereby appropriated and may be budgeted and expended by the State 
Treasurer for expenses related to the administr ation and support of 
the Program.  Expenditures from the fund shall be made upon warrants 
issued by the State Treasurer against cla ims filed as prescribed by 
law with the Director of the Office of Management and Enterprise 
Services for approval and payment . 
SECTION 7.     NEW LAW     A new section of law to be codified 
in the Oklahoma Statu tes as Section 3605 of Title 62, unless there 
is created a duplication in numbering, reads as follows: 
A.  There is hereby created as an instrumentality of the state a 
trust to be known as the "Oklahoma Prosperity Act Trust". 
B.  The State Treasurer may ap point qualified financial 
institutions to act as tr ustee or custodian of the IRA accounts. 
C.  The assets of IRAs established for covered employees shall 
be allocated to the Trust and combined for investment purpos es.  
Trust assets shall be managed and adm inistered for the purposes of 
providing services to enrollees and defraying reasonable 
administrative expenses of the Oklahoma Prosperity Act Program. 
D.  There shall be established within the Trust one or more 
investment funds.  The first One Thousand Dol lars ($1,000.00) in 
contributions made by, or on be half of, an enrollee may be deposited 
into a default capital preservation investment fund and the enrollee   
 
 
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may be provided an account revocation period during whic h, if the 
enrollee chooses to end particip ation in the Program, the enr ollee 
may withdraw the deposited amounts from the default inves tment 
without penalty. 
E.  Enrollees may allocate assets of their IRAs among investment 
funds and a default investment fun d may be designated for the IRAs 
of enrollees who do not select an inve stment fund. 
F.  The State Treasurer may retain investment advi sers to select 
and manage the investments of investment funds on a discretionary 
basis, subject to ongoing review and over sight. 
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 assets shall not be transferred or us ed by the 
state for any purposes other tha n the purposes of the Trust or 
funding the expenses of operating the Program. 
H.  The assets of the Trust shall be held separate and apart 
from the assets of the state. 
I.  There shall be no liability for the state , the Program, the 
State Treasurer, or any employer for investment loss es incurred by 
any covered employee as a result of participatin g in the Program. 
J.  The Trust and each investment fund shall not be subject to 
income tax of this state.   
 
 
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K.  If the Program is established by using the IRA program of 
another state, a joint program, or a consortiu m with one or more 
other states, then the Trust may be established by adopting the 
trust established under the program of the other state or states or 
as a master trust or similar arrangement with the othe r state or 
states; provided, that the trust, master trust, or similar 
arrangement satisfies the requirements of this section. 
SECTION 8.     NEW LAW     A new section of law to be codified 
in the Oklahoma Statutes as Section 3606 of Title 62, unless there 
is created a duplication in numbering, reads as follows: 
The Oklahoma Prosperity Act P rogram shall be established so that 
enrollees may begin making contributions within twenty -four (24) 
months of the effective date of this act; p rovided, that the State 
Treasurer may extend the period withi n which the Program is 
implemented by twelve (12) m onths.  The State Treasurer may 
establish a pilot program for certain participating employers, may 
provide for a staggered rollout of the Progra m so that participating 
employers may offer the Program to co vered employees in stages based 
on employee headcount or other criteria, or both. 
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 Administrative Procedures Act.   
 
 
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2.  The Corporation Commission sh all be required to comply with 
the provisions of Article 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 extent of any conflict or 
inconsistency with Article I of the Administrative 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 and 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 th e 
Administrative Procedures Act to the extent it exercises its 
responsibility for military affairs.  Military publications, as 
defined in Section 801 of Title 44 of the Oklahoma Statutes, shall 
be exempt from the provision s of Article I and Article II of t he 
Administrative Procedures Act, except as provided in Sec tion 251 of 
this title. 
4.  The Oklahoma Ordnance Works Authority, the Nor theast 
Oklahoma Public Facilities Authority, the Oklahoma Office of 
Homeland Security, and the Board of Trustees of the Okl ahoma College 
Savings Plan shall be exempt from Article I o f the Administrative 
Procedures Act. 
5.  The Transportation Commission and the Department of 
Transportation shall be exempt from Article I of the Administrative   
 
 
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Procedures Act to the extent they e xercise their authority in 
adopting standard specifications , special provisions, plans, design 
standards, testing procedures, federall y imposed requirements and 
generally recognized standards, project planning and programmi ng, 
and the operation and control of the State Highway System. 
6.  The Oklahoma State Regen ts for Higher Education shall be 
exempt from Article I of the Administrativ e Procedures Act wit h 
respect to: 
a. prescribing standards of higher education, 
b. prescribing functions and courses of study 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 Le gislature. 
7.  Institutional governing boards within The O klahoma State 
System of Higher Education shall be exempt from Article I of the 
Administrative Procedu res Act. 
8. a. The Commissioner of Public Safety shall be exempt from 
Sections 303.1, 304, 307. 1, 308, and 308.1 of this 
title insofar as it is necessary t o promulgate rules 
pursuant to the Oklahoma Motor Carrier Safety and 
Hazardous Materials Transportatio n Act, to maintain a 
current incorporation of federal motor carrier s afety   
 
 
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and hazardous materi al regulations, or pursuant to 
Chapter 6 of Title 47 of the Oklahoma Statutes, to 
maintain a current incorporation of federal commerci al 
driver license regulatio ns, for which the Commissioner 
has no discretion when the state is ma ndated to 
promulgate rules identical 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 nee d 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 fil ed with 
the Secretary as requ ired by Section 251 of this 
title. 
d. For any rules for which the Com missioner has 
discretion to allow variances, tolerances, or 
modifications from the federal rules and regulations, 
the Commissioner shall fully comply with Art icle I of 
the Administrative P rocedures Act. 
9. The Council on Judicial Complaints shall be exemp t 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   
 
 
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action for declaratory judgment, or any other relief based upon the 
validity or applicability of a rule, in the di strict 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 A ct with respect to: 
a. prescribing internal management procedures for the 
management of the state p risons, county jails, and 
city jails and for the management, supervision, and 
control of all incarcerated prisoners, and 
b. prescribing internal management p rocedures for the 
management of the probation and parole unit of the 
Department of Corrections and for the supervision of 
probationers and parolees. 
11.  The State Board of Education shall be exempt from Article I 
of the Administrative Procedures Act with respect to prescribing 
subject matter standards as provided for in Section 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:   
 
 
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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 Authori ty; 
7.  The Grand River Dam Authority; 
8.  The Northeast Oklahoma Public Facilities Authority; 
9.  The Council on Judicial Complaints; 
10.  The Board of Trustees of the Oklahoma College Savin gs Plan; 
11.  The supervisory or administrative agency of any pen al, 
mental, medical or eleemosynary institution, only with respect to 
the institutional supervision, custody, control, care , or treatment 
of inmates, prisoners, or patients therein; provided, t hat the 
provisions of Article II shall apply to and govern all 
administrative actions of the Oklahoma Alcohol Prevention, Training, 
Treatment and Rehabilitation Authority; 
12.  The Board of Regents or employe es of any university, 
college, or other institut ion of higher learning; 
13.  The Oklahoma Horse Racing Commissi on, its employees, or 
agents only with respect to hearing and notice requirements on the 
following classes of violations which are an imminent pe ril to the 
public health, safety , and welfare:   
 
 
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a. any rule regarding the running of a race, 
b. any violation of medication laws and rules, 
c. any suspension or revocation of an occupation 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 devic es, laws, and rules, 
or 
f. any filing of false information; 
14.  The Commissioner of Public Safety only with respect to 
driver license heari ngs and hearings conducted pursuant to the 
provisions of Section 2-115 of Title 47 of the Oklahoma Statutes; 
15.  The Administrator of the Department of Securities only with 
respect to hearings conducted pursuant to provisions of the Oklahoma 
Take-over Disclosure Act of 1985; 
16.  Hearings conducted by a publi c agency pursuant to Section 
962 of Title 47 of the Oklahoma Statutes; 
17.  The Oklahoma Military Department of the State of Oklahoma; 
18.  The University Hospitals Authority, including all hospitals 
or other institutions operated by the University Hospita ls 
Authority; 
19.  The Oklahoma Health Care Authority Board and the 
Administrator of the Oklahoma Health Care Authority; and   
 
 
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20.  The Oklahoma Of fice of Homeland Security; and 
21.  The State Treasurer with respect to the adoption 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, 2023. 
 
59-1-494 QD 1/17/2023 6:21:24 PM