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Oklahoma House Bill HB2254

Oklahoma 2024 Regular Session

Oklahoma House Bill HB2254 Compare Versions

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28-ENGROSSED HOUSE
29-BILL NO. 2254 By: Burns, Boatman, and Hill of
29+HOUSE OF REPRESENTATIVES - FLOOR VERSION
30+
31+STATE OF OKLAHOMA
32+
33+1st Session of the 59th Legislature (2023)
34+
35+COMMITTEE SUBSTITUTE
36+FOR
37+HOUSE BILL NO. 2254 By: Burns, Boatman, and Hill of
3038 the House
3139
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3442 Stewart of the Senate
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47+COMMITTEE SUBSTITUTE
3948
4049 [ public finance - Tobacco Settlement Endowment Trust
4150 Fund - investments - venture capital - effective
4251 date ]
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4756 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
4857 SECTION 1. AMENDATORY 62 O.S. 2021, Section 2306, is
4958 amended to read as follows:
5059 Section 2306. A. The Board of Investors of the Tobacco
5160 Settlement Endowment Trust Fund s hall discharge their duties as
5261 trustees of the Tobacco Settlement Endowment Trust Fund:
5362 1. With the care, skill, prudence, and diligence, under the
5463 circumstances then prevailing, that a prudent pe rson acting in a
55-like capacity and familiar with such matters would use in the
56-conduct of an enterprise of a like character and with like aims;
57-2. By diversifying the investments in the trust fund so as to
58-minimize the risk of large losses, unless, under the circumstances,
59-it is clearly prudent not to do so; and
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91+like capacity and familiar with such matte rs would use in the
92+conduct of an enterprise of a like character and with like aims;
93+2. By diversifying the investments in the trust fund so as to
94+minimize the risk of large losses, unless, under the circumstances,
95+it is clearly prudent not to do so; and
8696 3. In accordance with the laws, documents, and i nstruments
87-governing the trust fund ;
97+governing the trust fund ; and
8898 4. By investment of at least four percent (4%) of funds in
89-eligible Oklahoma venture c apital companies or eligible Oklahoma
90-venture capital fund of funds;
91-5. As used in this section, "eligible Oklahoma venture capital
92-company" means a business entity that meets the definition of
93-"venture capital fund " set forth in 17 CFR Section 275.203(l)-1 and
94-which:
95-a. has five or more investors, and no investor, including
96-their closely related family members and a ffiliates,
97-may own or have a capital interest in more than forty
98-percent (40%) of the eligible Oklahoma venture capital
99-company's capitalization,
100-b. as used in this subsection, "closely related" means
101-any of the following in relation to the investor or
102-the investor's spouse:
103-(1) parents or grandparents ,
104-(2) children, grandchildren or their spouses , or
105-(3) siblings or their spouses and their c hildren,
106-c. has either:
107-(1) its principal place of business in the Sta te of
108-Oklahoma, or
99+venture capital entities as identified by the Oklahoma Department of
100+Commerce pursuant to subsection D of Section 2401 of this title .
101+B. The Board of Inve stors shall retain qualified inv estment
102+managers to provide for the investment of the monies of the tr ust
103+fund. The investment managers shall be chosen by a solicitation of
104+proposals on a competitive basis pursuant to standards set by the
105+Board of Investors. The investment managers sha ll manage those
106+monies of the trust fund allocated to the investment m anagers in
107+compliance with the overall investment guidelines set by the Board
108+of Investors. The monies of the trust fund allocated to the
109+investment managers shall be managed by the inv estment managers in
110+accordance with the investment guidelines and othe r directions of
111+the Board of Investors. The inves tment managers may sell
112+investments and realize losses if such action is considered
113+advantageous to long er-term return maximization. Be cause of the
114+total return objective, no distinction shall be made for management
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135-(2) has more than fifty percent (50%) of its assets,
136-operations, and employees in the State of
137-Oklahoma, and
138-d. is included on the list maintained by the Oklahoma
139-Department of Commer ce pursuant to subsection D of
140-Section 2401 of this ti tle.
141-Eligible Oklahoma venture capital com pany shall also include any
142-special purpose vehicle created and managed by an eligible Oklahoma
143-venture capital company for the sole purpose of investing in a
144-single eligible Oklahoma business venture ; and
145-6. "Eligible Oklahoma venture capital fund of fu nds" means a
146-business entity that invests more than fifty percent (50%) of its
147-aggregate capital contributions and uncalled committed capital in
148-the equity of "venture capital funds" as defined in 17 CFR Section
149-275.203(l)-1 and that meets the requirements set forth in
150-subparagraphs a through d of paragraph 5 of this subsection.
151-B. The Board of Investors shall retain qualified inv estment
152-managers, eligible Oklahoma venture capital companies, or eligible
153-Oklahoma venture fund of funds, as applicable, to provide for the
154-investment of the monies of the trust fund. The investment
155-managers, eligible Oklahoma venture capital companies, or eligible
156-Oklahoma venture fund of funds shall be chosen by a solicitation of
157-proposals on a competitive basis pursuant to standards set by the
158-Board of Investors. The investment managers , eligible Oklahoma
142+and performance evaluation purposes bet ween realized and unrealized
143+capital gains and losses. The Board of Investors may have the State
144+Treasurer manage those monies not spec ifically allocated to the
145+investment managers.
146+C. The trust fund may be invested in the manner in which a
147+prudent person would invest it and consistent with t he manner that
148+state retirement funds are invested.
149+D. The Board of Investors shall select a cus todial bank to
150+settle transactions involving the investment of funds i n the trust
151+fund and to hold custody of the securi ties in the trust fund
152+portfolio. The custodian shall be a bank or trust company offering
153+pension fund master trustee and master custod ial services. The
154+custodian shall be chosen by a solicitation of prop osals on a
155+competitive basis pursuant to standards set by the Board of
156+Investors. The Board of Investors may also select professional
157+investment consultants, auditors, and actuaries to assist the Board
158+of Investors in carrying out its fiduciary responsibi lities. All
159+these professionals shall be selected by a solicitation of proposals
160+on a competitive basis pursuant to standards set by the Board of
161+Investors.
162+E. The Board of Investors s hall choose the professional
163+custodians and managers of the assets of the trust fund, shall
164+establish investment and fun d management guidelines, and shall adop t
165+an investment policy. The selection of investment managers,
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185-venture capital companies, or eligible Oklahoma venture fund of
186-funds shall manage those monies of the trust fund allocated to the
187-investment managers, eligible Oklahoma venture capital companies, or
188-eligible Oklahoma venture fund of funds in compliance with the
189-overall investment guidelines set by the Board of Investors. The
190-monies of the trust fund allocated to the investment manage rs,
191-eligible Oklahoma venture capital companies, or eligible Oklahoma
192-venture fund of funds shall be managed by the inv estment managers,
193-eligible Oklahoma venture capital companies, or eligible Oklahoma
194-venture fund of funds in accordance with the invest ment guidelines
195-and other directions of the Board of Investors. The investment
196-managers, eligible Oklahoma venture capital companies, or eligible
197-Oklahoma venture fund of funds may sell investments and r ealize
198-losses if such action is considered advantage ous to longer-term
199-return maximization. Because of the total return objective, no
200-distinction shall be made for management and performance evaluation
201-purposes between realized and unrealized capital gain s and losses.
202-The Board of Investors may have the S tate Treasurer manage those
203-monies not specifically allocated to the investment managers ,
204-eligible Oklahoma venture capital companies, or eligible Oklahoma
205-venture fund of funds .
206-C. The trust fund may be invested in the manner in which a
207-prudent person would invest it and consistent w ith the manner that
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234-state retirement funds are invested. Investment as required by
235-paragraph 4 of subsection A of this section is deemed to be prudent.
236-D. The Board of Inve stors shall select a cus todial bank to
237-settle transactions involving the investment of funds in the trust
238-fund and to hold custody of the securities in the trust fund
239-portfolio. The custodian shall be a bank or trust company offering
240-pension fund master t rustee and master custod ial services. The
241-custodian shall be chosen by a solicitat ion of proposals on a
242-competitive basis pursuant to standards set by the Board of
243-Investors. The Board of Investors may also select professional
244-investment consultants, attorneys, auditors, and actuaries to assist
245-the Board of Investors in carrying out it s fiduciary
246-responsibilities. All these professionals shall be selected by a
247-solicitation of proposals on a competitive basis pursuant to
248-standards set by the Board of Inve stors.
249-E. The Board of Investors s hall choose the professional
250-custodians and managers of the assets of the trust fund, eligible
251-Oklahoma venture capital companies, or eligible Oklahoma venture
252-fund of funds, shall establish investment and fund management
253-guidelines, and shall adopt an investment policy. The selection of
254-investment managers, eligible Oklahoma venture capital companies, or
255-eligible Oklahoma venture fund of funds, investment consultants,
256-auditors, and actuaries, and a custodian bank shall b e exempt from
257-the provisions of the Oklahoma Central Purchasing Act.
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193+investment consultants, auditors, and actuaries, and a custodian
194+bank shall be exempt from the provision s of the Oklahoma Central
195+Purchasing Act.
284196 F. The Board of Investors shall set aside cash reserves from
285197 the earnings of the Tobacco Settlement Endowment T rust Fund if
286198 requested by the Board of Directors of the Tobacco Settlement
287199 Endowment Trust Fund pursua nt to subsection B of Section 10 2310 of
288200 this act title.
289201 G. The State Treasurer shall provide any n ecessary staff
290202 support to the Board of Investors. The co st of up to two full-time-
291203 equivalent employees for the Office of the State Treasurer may be
292204 considered as an administrative expense of the trust fund. However,
293205 the amount provided to the State Treas urer for this purpose shall be
294206 determined by the Board of Directors of the Tobacco Settlement
295207 Endowment Trust Fund.
296208 SECTION 2. This act shall become effective November 1, 2023.
297-Passed the House of Repre sentatives the 23rd day of March, 2023.
298209
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302- Presiding Officer of the House
303- of Representatives
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307-Passed the Senate the ___ day of __________, 2023.
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312- Presiding Officer of the Senate
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210+COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
211+03/02/2023 - DO PASS, As Amended and Coauthored.