Oklahoma 2024 Regular Session

Oklahoma House Bill HB1617 Compare Versions

Version 1 (Old)

Version 2 (New)

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3		-	SENATE FLOOR VERSION - HB1617 SFLR Page 1
4		-	(Bold face denotes Committee Amendments) 1
	3	+	ENGR. H. B. NO. 1617 Page 1 1
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29		-	SENATE FLOOR VERSION
30		-	April 8, 2024
31		-
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33	28		ENGROSSED HOUSE
34	29		BILL NO. 1617 By: Lepak, O'Donnell, McDugle,
35	30		and Echols of the House
36	31
37	32		and
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39		-	Jett and Rader of the
40		-	Senate
	34	+	Jett of the Senate
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45	42		An Act relating to public finance; enacting the
46	43		Oklahoma Public Finance Protection Act ; defining
47	44		terms; providing fiduciary's standard of care;
48	45		prohibiting consideration of non -pecuniary factors;
49	46		providing who has authority to vot e on certain
50	47		shares; providing for delegation of authority;
51	48		providing that proxy votes be reported annual ly;
52	49		authorizing Attorney General to enforce act and
53	50		examine certain persons and reco rds; providing
54	51		immunity for the State of Oklahoma and certain
55	52		individuals; providing for indemnification; providing
56	53		for severability; providing for codification;
57	54		providing an effective date ; and declaring an
58	55		emergency.
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63	60		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
64	61		SECTION 1. NEW LAW A new section of law to be codified
65	62		in the Oklahoma Statutes as Section 9101 of Title 62, unless there
66	63		is created a duplication in numbering, reads as follows:
67	64		This act shall be known and may be cited as the "Oklahoma Public
68	65		Finance Protection Act".
69	66
70		-	SENATE FLOOR VERSION - HB1617 SFLR Page 2
71		-	(Bold face denotes Committee Amendments) 1
	67	+	ENGR. H. B. NO. 1617 Page 2 1
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96	92		SECTION 2. NEW LAW A new s ection of law to be codified
97	93		in the Oklahoma Statutes as Section 9102 of Title 62, unless there
98	94		is created a duplication in numbering, reads as follows:
99	95		As used in the Oklahoma Public Finance Protection Act:
100	96		1. "Fiduciary" means a person who, with respect to a pension
101	97		benefit plan:
102	98		a. exercises any discretionary authority or discretionary
103	99		control respecting management of such plan or
104	100		exercises any authority or control respecti ng
105	101		management or disposition of its assets,
106	102		b. renders investment advice for a fee or other
107	103		compensation, direct or indirect, with respect to any
108	104		monies or other property of such plan, or has any
109	105		authority or responsibility to do so, or
110	106		c. has any discretionary authority or discretionary
111	107		responsibility in the administration of such plan,
112	108		including making recommendations or voting a plan 's
113	109		shares or proxies;
114	110		2. "Material", when used to qualify a risk or return:
115	111		a. means a risk or return regarding which ther e is a
116	112		substantial likelihood that a reasonable investor
117	113		would attach importance when :
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119		-	SENATE FLOOR VERSION - HB1617 SFLR Page 3
120		-	(Bold face denotes Committee Amendments) 1
	115	+	ENGR. H. B. NO. 1617 Page 3 1
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145	140		(1) evaluating the potential financial return and
146	141		financial risks of an existing or prospective
147	142		investment, or
148	143		(2) exercising, or declining to exercise, any rights
149	144		appurtenant to securities , and
150	145		b. does not include:
151	146		(1) furthering non-pecuniary, environmental, social,
152	147		political, ideological, or other goals or
153	148		objectives, or
154	149		(2) any portion of a risk or return that primarily
155	150		relates to events that are not investment-
156	151		specific in nature;
157	152		3. "Non-pecuniary" includes any action taken or factor
158	153		considered by a fiduciary with any purpose to further environmental,
159	154		social, political, ideological, or other goals or objectives. A
160	155		fiduciary purpose with respect to plan assets , including any right
161	156		appurtenant to plan assets, may be reasonably determined by
162	157		evidence, including, but not limited to, a fiduciary 's statements or
163	158		commitments that include or would include plan assets and indicate
164	159		its purpose in selecting investments, engagin g with portfolio
165	160		companies, or voting shares or proxies, including such statements or
166	161		commitments made by a fiduciary pursuant to its parti cipation in, or
167	162		status as a signatory to, any coalition, initiative, or organization
168	163
169		-	SENATE FLOOR VERSION - HB1617 SFLR Page 4
170		-	(Bold face denotes Committee Amendments) 1
	164	+	ENGR. H. B. NO. 1617 Page 4 1
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195	189		that has a purpose of using investment activity to further non -
196	190		pecuniary goals;
197	191		4. "Pecuniary factor" means a factor that has a material effect
198	192		on the financial risk or financial return of an investm ent based on
199	193		appropriate investment horizons consistent with the plan 's
200	194		investment objectives and the funding policy. The term excludes
201	195		non-pecuniary factors; and
202	196		5. "Pension benefit plan" or "plan" shall mean any plan, fund,
203	197		or program which was hereto fore or is hereafter established,
204	198		maintained, or offered by the State of Oklahoma or any subdivision,
205	199		county, municipality, agency , or instrumentality thereof, or any
206	200		school, college, university, administration, a uthority, or other
207	201		enterprise operated by th e State of Oklahoma, to the extent that by
208	202		its terms or as a result of surrounding circu mstances:
209	203		a. provides retirement income or other retirement
210	204		benefits to employees or former employees, or
211	205		b. results in a deferral of income by such employees for
212	206		a period extending to the termination of covered
213	207		employment or beyond , and
214	208		c. the term does not include a defined contribution plan
215	209		under the Retirement Freedom Act, established pursuant
216	210		to Section 935.1 et seq. of Title 74 of the Oklahoma
217	211		Statutes, except that investment options selected as
218	212		default investment options for participating e mployees
219	213
220		-	SENATE FLOOR VERSION - HB1617 SFLR Page 5
221		-	(Bold face denotes Committee Amendments) 1
	214	+	ENGR. H. B. NO. 1617 Page 5 1
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246	239		shall be selected in adherence to the requirements of
247	240		this act.
248	241		SECTION 3. NEW LAW A new section of law to be codified
249	242		in the Oklahoma Statutes as Section 9103 of Title 62, unless there
250	243		is created a duplication in numbering, reads as follows:
251	244		A fiduciary shall dischar ge his duties with respect to a plan
252	245		solely in the pecuniary interest of the par ticipants and
253	246		beneficiaries:
254	247		1. For the exclusive purpose of providing pecuniary benefits to
255	248		participants and their beneficiaries and defraying reasonable
256	249		expenses of administ ering the plan;
257	250		2. With the care, skill, prudence, and diligence under the
258	251		circumstances then prevailing that a pr udent man acting in a like
259	252		capacity and familiar with such matters would use in the conduct of
260	253		an enterprise of a like character and with lik e aims;
261	254		3. By diversifying the investments of the plan so as to
262	255		minimize the risk of large losses, unless under th e circumstances it
263	256		is clearly prudent not to do so; and
264	257		4. In accordance with the documents and instruments governing
265	258		the plan and insofar as such documents and instruments are
266	259		consistent with the fiduciary responsibilities provided by law,
267	260		including the provisions of this act.
268	261
269		-	SENATE FLOOR VERSION - HB1617 SFLR Page 6
270		-	(Bold face denotes Committee Amendments) 1
	262	+	ENGR. H. B. NO. 1617 Page 6 1
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295	287		SECTION 4. NEW LAW A new section of law to be codified
296	288		in the Oklahoma Statutes as Section 9104 of Title 62, unless there
297	289		is created a duplication in numbe ring, reads as follows:
298	290		A fiduciary's evaluation of an investment, or evaluation or
299	291		exercise of any right appurtenant to an investment, must take into
300	292		account only pecuniary factors. Plan fiduciaries are not permitted
301	293		to promote non-pecuniary benefits or any other non-pecuniary goals.
302	294		Environmental, social , ideological, corporate governance, or other
303	295		goals, objectives, or similarly oriented considerations are
304	296		pecuniary factors only if they present economic risks or
305	297		opportunities that qualified investment professionals would treat as
306	298		material economic considerations under generally accepted investment
307	299		theories. The weight given to those factors should solely re flect a
308	300		prudent assessment of their impact on risk and return.
309	301		SECTION 5. NEW LAW A new section of law to be codified
310	302		in the Oklahoma Statutes as Section 9105 of Title 62, unless there
311	303		is created a duplication in numbering, reads as follows:
312	304		A. All proxies held by or on behalf of a pension b enefit plan
313	305		or the beneficiaries thereof shall be voted solely in the pecuniary
314	306		interest of plan participants. Voting to further non-pecuniary,
315	307		environmental, social, political, ideological or o ther benefits or
316	308		goals is prohibited.
317	309		B. Unless no economically practicable alternative is available,
318	310		a fiduciary may not adopt a practice of followi ng the
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320		-	SENATE FLOOR VERSION - HB1617 SFLR Page 7
321		-	(Bold face denotes Committee Amendments) 1
	312	+	ENGR. H. B. NO. 1617 Page 7 1
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346	337		recommendations of a proxy advisory firm or other service provider
347	338		unless such firm or service prov ider has a practice of, and in
348	339		writing commits to, follow ing proxy voting guidelines that are
349	340		consistent with the plan's fiduciary obligation to act based only on
350	341		pecuniary factors.
351	342		C. Unless no economically practicable alternative is available,
352	343		plan assets shall not be entrusted to a fiduciary unless that
353	344		fiduciary has a practice of, and in writing commits to, follow ing
354	345		guidelines, when using plan assets to engage with portfolio
355	346		companies and vote shares or proxies that match the plan's
356	347		obligation to act based only on pecuniary factors.
357	348		D. With respect to the pension benefit plans, a ll such proxy
358	349		voting authority shall reside with the respective Board of Trustees,
359	350		except that the Board of Trustees may delegate such author ity to a
360	351		person who has a practice of, and in writing commits to, f ollowing
361	352		guidelines that match the plan's obligation to act based only on
362	353		pecuniary factors.
363	354		E. All proxy votes shall be tabulated and reported annually to
364	355		the respective Board of Trustees . For each vote, the report shall
365	356		contain a vote caption, the plan 's vote, the recommendation of
366	357		company management, and, if applicable, the proxy advisor 's
367	358		recommendation. These reports shall be posted on a publicly
368	359		available webpage.
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370		-	SENATE FLOOR VERSION - HB1617 SFLR Page 8
371		-	(Bold face denotes Committee Amendments) 1
	361	+	ENGR. H. B. NO. 1617 Page 8 1
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396	386		SECTION 6. NEW LAW A new sec tion of law to be codified
397	387		in the Oklahoma Statutes as Section 9106 of Title 62, unless there
398	388		is created a duplication in numbering, re ads as follows:
399	389		A. This act may be enforced by the Attorney General.
400	390		B. If the Attorney General has reasonable cause to believe that
401	391		a person has engaged in, is engaging in, or is about to engage in a
402	392		violation of this act, he or she may:
403	393		1. Require such person to file on such forms as he or she
404	394		prescribes a statement or report in writing, under oath, as to all
405	395		the facts and circumstances concerning the violation, and such other
406	396		data and information as he or she may deem necessary;
407	397		2. Examine under oath any person in connection with the
408	398		violation;
409	399		3. Examine any record, book, document, or paper as he or she
410	400		may deem necessary; and
411	401		4. Pursuant to an order of the Supreme Court of Oklahoma,
412	402		impound any record, book, document, paper, or sample or material
413	403		relating to such practice and retain the same in his or her
414	404		possession until the completion of all proceedings undertaken under
415	405		this act or in the courts.
416	406		SECTION 7. NEW LAW A new section of law to be codified
417	407		in the Oklahoma Statutes as Section 9107 of Title 62, unless there
418	408		is created a duplication in numbering, reads as follows:
419	409
420		-	SENATE FLOOR VERSION - HB1617 SFLR Page 9
421		-	(Bold face denotes Committee Amendments) 1
	410	+	ENGR. H. B. NO. 1617 Page 9 1
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446	435		A. The State of Oklahoma, pension benefit plans as defined in
447	436		this act, as well as officers, board members, and employees of the
448	437		state or the pension benefit p lans are immune from civil liability
449	438		for any act or omission related to any provision under this act.
450	439		B. In addition to the immunity provided under subsection A of
451	440		this section, officers, board members, and employees of the state or
452	441		the pension benefit plans are entitled to indemnif ication from the
453	442		pension benefit plan for all losses, costs a nd expenses, including
454	443		reasonable attorney fees, associated with defending a gainst any
455	444		claim or suit related to any provision of this act.
456	445		SECTION 8. NEW LAW A new section of law to be codified
457	446		in the Oklahoma Statutes as Section 9108 of Title 62, unless there
458	447		is created a duplication in numbering, reads as follows:
459	448		Should a court of competent jurisdiction hold any provision(s)
460	449		of this chapter to be invalid, such action will not affect any other
461	450		provision of this act.
462	451		SECTION 9. This act shall become effective July 1, 2024.
463	452		SECTION 10. It being immediately necessary for the preservation
464	453		of the public peace, hea lth or safety, an emergency is h ereby
465	454		declared to exist, by reason whereof this act shall take effect and
466	455		be in full force from and after its passage an d approval.
467		-	COMMITTEE REPORT BY: COMMITTEE ON FINANCE
468		-	April 8, 2024 - DO PASS
	456	+
	457	+	ENGR. H. B. NO. 1617 Page 10 1
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	482	+	Passed the House of Representatives the 13th day of March, 2024.
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	485	+
	486	+
	487	+	Presiding Officer of the House
	488	+	of Representatives
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	490	+
	491	+
	492	+	Passed the Senate the ___ day of __________, 2024.
	493	+
	494	+
	495	+
	496	+
	497	+	Presiding Officer of the Senate