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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2254 By: Burns
COMMITTEE SUBSTITUTE
[ public finance - Tobacco Settlement Endowment Trust
Fund - investments - venture capital - effective
date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 2306, is
amended to read as follows:
Section 2306. A. The Board of Investors of the Tobacco
Settlement Endowment Trust Fund s hall discharge their duties as
trustees of the Tobacco Settlement Endowment Trust Fund:
1. With the care, skill, prudence, and diligence, under the
circumstances then prevailing, that a prudent pe rson acting in a
like capacity and familiar with such matte rs would use in the
conduct of an enterprise of a like character and with like aims;
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2. By diversifying the investments in the trust fund so as to
minimize the risk of large losses, unless, under the circumstances,
it is clearly prudent not to do so; and
3. In accordance with the laws, documents, and i nstruments
governing the trust fund ; and
4. By investment of at least four percent (4%) of funds in
venture capital entities as identified by the Oklahoma Department of
Commerce pursuant to subsection D of Section 2401 of this title .
B. The Board of Inve stors shall retain qualified inv estment
managers to provide for the investment of the monies of the trust
fund. The investment managers shall be chosen by a solicitation of
proposals on a competitive basis pursuant to standards set by the
Board of Investors. The investment managers sha ll manage those
monies of the trust fund allocated to the investment managers in
compliance with the overall investment guidelines set by the Board
of Investors. The monies of the trust fund allocated to the
investment managers shall be managed by the inv estment managers in
accordance with the investment guidelines and other directions of
the Board of Investors. The inves tment managers may sell
investments and realize losses if such action is considered
advantageous to long er-term return maximization. Be cause of the
total return objective, no distinction shall be made for management
and performance evaluation purposes bet ween realized and unrealized
capital gains and losses. The Board of Investors may have the State
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Treasurer manage those monies not spec ifically allocated to the
investment managers.
C. The trust fund may be invested in the manner in which a
prudent person would invest it and consistent with t he manner that
state retirement funds are invested.
D. The Board of Investors shall select a cus todial bank to
settle transactions involving the investment of funds in the trust
fund and to hold custody of the securi ties in the trust fund
portfolio. The custodian shall be a bank or trust company offering
pension fund master trustee and master custod ial services. The
custodian shall be chosen by a solicitation of proposals on a
competitive basis pursuant to standards set by the Board of
Investors. The Board of Investors may also select professional
investment consultants, auditors, and actuaries to assist the Board
of Investors in carrying out its fiduciary responsibilities. All
these professionals shall be selected by a solicitation of proposals
on a competitive basis pursuant to standards set by the Board of
Investors.
E. The Board of Investors s hall choose the professional
custodians and managers of the assets of the trust fund, shall
establish investment and fun d management guidelines, and shall adop t
an investment policy. The selection of investment managers,
investment consultants, auditors, and actuaries, and a custodian
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bank shall be exempt from the provisions of the Oklahoma Central
Purchasing Act.
F. The Board of Investors shall set aside cash reserves from
the earnings of the Tobacco Settlement Endowment T rust Fund if
requested by the Board of Directors of the Tobacco Settlement
Endowment Trust Fund pursuant to subsection B of Section 10 2310 of
this act title.
G. The State Treasurer shall provide any n ecessary staff
support to the Board of Investors. The co st of up to two full-time-
equivalent employees for the Office of the State Treasurer may be
considered as an administrative expense of the trust fund. However,
the amount provided to the State Treas urer for this purpose shall be
determined by the Board of Directors of the Tobacco Settlement
Endowment Trust Fund.
SECTION 2. This act shall become effective November 1, 2023.
59-1-7903 JM 03/02/23