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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 469 By: Paxton
AS INTRODUCED
An Act relating to state government; creating the
Higher Education Energy Discriminati on Elimination
Act of 2023; providing short title; amending Section
3, Chapter 231, O.S.L. 2022 (74 O.S. Supp. 2022,
Section 12003), which relates to requirements,
procedures, and limita tions; requiring State
Treasurer to prepare certain list for higher
education entities; subjecting hi gher education
entities to requirements of the Energy Discrimination
Elimination Act of 2022; defining terms; exempting
certain entities from provisions of act due to
statutory obligations; providing indemnification for
certain entities; prohibiting certai n persons and
entities from entering into a lawsuit with state or
state affiliate; providing any person entering a
lawsuit against state or state affiliate pursuant to
this act be subject to certain costs and fees;
requiring report to certain public offici als upon
decision to cease divestment from certain financial
company; providing for publishing of report by state
governmental entities to certain public officials;
updating statutory language; providing for
codification; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12011 of Title 74, unless there
is created a duplication in numbering, reads as follows:
This act shall be known and may be cited as the “Higher
Education Energy Discrimination Elimination Act of 2023 ”.
SECTION 2. AMENDATORY Section 3, Chapter 231, O.S.L.
2022 (74 O.S. Supp. 2022, Section 12003), is amended to read as
follows:
Section 12003. A. 1. The State Treasurer shall prepare and
maintain and provide to each state governmental entity and higher
education entity pursuant to the provisions of the Higher Education
Energy Discrimination Elimi nation Act of 2023 a list of financial
companies that boycott energy companies. In maintaining the list,
the Treasurer may:
a. review and rely, as a ppropriate in the Treasurer’s
judgment, on publicly available inform ation regarding
financial companies inc luding information provided by
the state, nonprofit organizations, research firms,
international organizations, and governmental
entities, and
b. request written verification from a financial company
that it does not boycott energy companies and rely, as
appropriate in the Treasurer’s judgment and without
conducting further investigation, resear ch, or
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inquiry, on a financial company ’s written response to
the request.
2. A financial company that fails to provide to t he Treasurer a
written verification under subparagraph b of paragraph 1 of this
subsection before the sixty-first day after receivin g the request
from the Treasurer is presumed to be boyco tting energy companies.
3. The Treasurer shall update the list ann ually or more often
as the Treasurer considers necessary, but not more often than
quarterly, based on information from, among other s ources, those
listed in subparagraph a of paragraph 1 o f this subsection.
4. Not later than the thirtieth day after the date the list of
financial companies that bo ycott energy companies is first provided
or updated, the Treasurer shall file the list with the presiding
officer of each house of the Legislature and the Attorney General
and post the list on a publicly available Internet website.
5. The Treasurer may retain third-party consultants to assist
in the implementation of the provisions of this act.
B. Not later than the thirtieth day after the date a state
governmental or higher education entity receives the list provided
under paragraph 1 of subsection A of this section, the state
governmental or higher education entity shall notify the Treasurer
of the listed financial companies in which the state governmental or
higher education entity owns direct holdings or indirect holdings.
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C. 1. For each listed financial company identified under
paragraph 1 of subsection A of this section, the state governmental
or higher education entity shall send a written notice:
a. informing the financial company of its status as a
listed financial company,
b. warning the financial company that it may become
subject to divestment by state governmental or higher
education entities after the expiration of the period
described by paragraph 2 of this subsection, and
c. offering the financial company the opportunity to
clarify its activities related to companies described
by paragraph 1 of subsection A of this section.
2. Not later than the ninetieth day after the date the
financial company rec eives notice under paragraph 1 of this
subsection, the financial company shall cease boycotting energy
companies to avoid qualifying for divestment by state governmental
or higher education entities.
3. If, during the time provided by paragraph 2 of this
subsection, the financial company ceases boy cotting energy
companies, the Treasurer shall remove the financial company from the
list maintained under paragraph 1 of subsection A of this section ,
and this subsection will no longer apply to the financial compa ny
unless it resumes boycotting energy com panies.
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4. If, after the time provided by paragraph 2 of this
subsection expires, the financial company continues to boycott
energy companies, the state governmental or higher education entity
shall sell, redeem, divest, or withdraw all publicly trade d
securities of the fina ncial company, except securities described by
subsection E of this section, according to the schedule provided
under subsection D of this section.
D. 1. A state governmental or higher education entity required
to sell, redeem, divest, or withdraw all publicly traded securities
of a listed financial company shall comply with the following
schedule:
a. at least fifty percent (50%) of thos e assets shall be
removed from the state governmental or higher
education entity’s assets under management not later
than the one-hundred-eightieth day after the date the
financial company receives notice pursuant to
paragraph 1 of subsection C of this section unless the
state governmental entity determines, based on a good-
faith exercise of its fiduciary discretion and subject
to subparagraph b of this subsection, that a later
date is more prudent, and
b. one hundred percent (100%) of those assets shall be
removed from the state governmental or higher
education entity’s assets under management not later
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than the three-hundred-sixtieth day after the date the
financial company receives notice pursuant to
paragraph 1 of subsection C of this section.
2. If a financial company that ceased boycottin g energy
companies after receiving notice pursuant to paragraph 1 of
subsection C of this section resumes its bo ycott, the state
governmental or higher education entity shall send a written notice
to the financial company informing it that the state governmental or
higher education entity will sell, redeem, divest, or withdraw all
publicly traded securities of th e financial company according to the
schedule in paragraph 1 of subsection D of this section.
3. Except as provided b y paragraph 1 of subsection D of this
section, a state governmental or higher education entity may delay
the schedule for divestment under th at subsection only to the extent
that the state governmental or higher education entity determines,
in the state governmental or higher education entity’s good-faith
judgment, and consistent with the entity’s fiduciary duty, that
divestment from listed financial companies will likely result in a
loss in value or a benchmark deviation described by paragraph 1 of
subsection F of this se ction.
4. If a state governmental or higher education entity delays
the schedule for divestment, the state governmental or higher
education entity shall submit a report to the Treasurer, the
presiding officer of each hous e of the Legislature, and the Attorney
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General stating the reasons and justification for the delay in
divestment by the state governmental or higher education entity from
listed financial companies. The report shall include documentation
supporting its determination that the divestment would result in a
loss in value or a benchmark deviation descri bed by paragraph 1 of
subsection F of this section including objective numerical
estimates. The state governmental or higher education entity shall
update the report every six (6) months.
E. A state governmental or higher education entity is not
required to divest from any indirect holdings i n actively or
passively managed investment funds or private equity funds. The
state governmental or higher education entity shall submit letters
to the managers of each investment fund cont aining listed financial
companies requesting that they remove t hose financial companies from
the fund or create a similar actively or passively managed fund with
indirect holdings devoid of listed financial companies. If a
manager creates a similar fund w ith substantially the same
management fees and same level of in vestment risk and anticipated
return, the state governmental or higher education entity may
replace all applicable investments with investments in the similar
fund in a time frame consistent wi th prudent fiduciary standards b ut
not later than the four-hundred-fiftieth day after the date the fund
is created.
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F. 1. A state governmental or higher education entity may
cease divesting from one or more listed financial companies only if
clear and convincing evidence shows that:
a. the state governmental or higher education entity has
suffered or will suffer a loss in the value of assets
under management by the state governmental or higher
education entity as a result of having to divest from
listed financial companies under this subsection, or
b. an individual portfolio that uses a benchmark-aware
strategy would be subject to an aggregate expected
deviation from its benchmark as a result of having to
divest from listed financial companies under this
subsection.
2. A state governmental or higher education entity may cease
divesting from a listed financial company as provided by this
section only to the extent n ecessary to ensure that the state
governmental or higher education entity does not suffer a loss in
value or deviate from its benchmark as described by paragraph 1 of
this subsection.
3. Before a state governmental or higher education entity may
cease divesting from a listed financial company u nder this section,
the state governmental or higher education entity shall provide a
written report to the Treasurer, the presiding officer of each house
of the Legislature, and the Attorney General setting forth the
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reason and justification, supported by clear and convincing
evidence, for deciding to cease divestment or to remain invested in
a listed financial company. The state governmental or higher
education entity shall update the report required by this subsection
semiannually, as applicable.
4. This section does not apply to reinvestment in a financial
company that is no longer a listed financial company.
G. Except as provided in subsection F of this section, a state
governmental or higher education entity shall not acquire securities
of a listed financial company.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statute s as Section 12012 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. As used in the Higher Education Energy Discrimination
Elimination Act of 2023:
1. “Boycott energy company” means, without an ordinary business
purpose, refusing to deal with, terminating bus iness activities
with, or otherwise taking any action that is inte nded to penalize,
inflict economic harm on, or limit commercial relations with a
company because the company:
a. engages in the exploration, producti on, utilization,
transportation, sale, or manufacturing of fossil-fuel-
based energy and does not commit or pledge to meet
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environmental standards beyond applicable federal and
state law, or
b. does business with a company descri bed by subparagraph
a of this paragraph;
2. “Company” means a for-profit sole proprietorship,
organization, association, corporation, partnership, joint venture,
limited partnership, limited liability partnership, or limited
liability company, including a wholly owned subsidiary, ma jority-
owned subsidiary, parent company, or affiliate of those entities or
business associations, that exis ts to make a profit;
3. “Treasurer” means the State Treasurer or his or her
designee;
4. “Direct holdings” means, with respect to a financial
company, all securities of that financial company h eld directly by a
state governmental entity in an account or fund in which a state
governmental entity owns all shares or interests;
5. “Financial company” means a publicly traded fi nancial
services, banking, or investment company;
6. “Higher education entity” means the Oklahoma State Regents
for Higher Education and any educat ional institution under the
jurisdiction of the Oklahoma State Regents for Higher Education;
7. “Indirect holdings” means, with respect to a financial
company, all securities of that fi nancial company held in an account
or fund, such as a mutual fund, managed by o ne or more persons not
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employed by a state governmental entity, in which the state
governmental entity owns shares or interest s together with other
investors not subject to the provisions of this act. The term does
not include money invested under a plan described by Section 401(k)
or 457 of the Internal Revenue Code of 1986; and
8. “Listed financial company” means a financial company listed
by the Treasurer.
B. With respect to actions taken in compliance with the Higher
Education Energy Discrimination E limination Act of 2023, including
all good-faith determinations regarding financial compani es as
required by this act, a highe r education entity and the Treasurer
are exempt from any conflicting statutory or common law obligations
including any obligations with respect to making investments,
divesting from any investment, preparing or maintainin g any list of
financial companies, or choosing asset managers, investment funds,
or investments for the higher education entity ’s securities
portfolios.
C. In a cause of action based on an action, inaction, decision,
divestment, investment, financial comp any communication, report, or
other determination made or taken in connection with the Higher
Education Energy Discrimination E limination Act of 202 3, the state
shall indemnify and hold harmless for actual damages, court costs,
and attorney fees adjudged a gainst, and defend:
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1. An employee, a member of the governing body, or any other
officer of a higher education entity;
2. A contractor of a higher education entity;
3. A former employee, a former member of the governing body, or
any other former officer o f a higher education entity w ho was an
employee, member of the governing body, or ot her officer when the
act or omission on whi ch the damages are based occurred;
4. A former contractor of a higher education entity who was a
contractor when the act or omis sion on which the damages are based
occurred; and
5. A higher education entity.
D. 1. Any person to which the Higher Education Energy
Discrimination Elimination Act of 2023 applies, an association, a
research firm, a financial company, or any other person shall not
sue or pursue a priv ate cause of action against the state, higher
education entity, a current or former employee, a member of the
governing body, or any ot her officer of a higher education entity,
or a contractor of a higher education entity, for any clai m or cause
of action, including breach of fiduciary duty, or for v iolation of
any constitutional, statutory, or regulatory requireme nt in
connection with any action, inaction, decision, divestment,
investment, financial company communication, report, or ot her
determination made or taken in connection with this act.
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2. A person who files suit again st the state, a higher
education entity, an employee, a member of the governing body, or
any other officer of a higher education entity, or a contractor of a
higher education entity, is liable for paying the costs and attorney
fees of a person sued in viol ation of this section.
3. A higher education entity shall not be subject to any
requirement of this act if the higher education entity determines
that such requirement would be incon sistent with its fiduciary
responsibility with respect to the investment of entity assets or
other duties imposed by law relating to th e investment of entity
assets.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 12013 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. Not later than January 1 of each year, each higher education
entity shall file a publicly available r eport with the Treasurer,
the presiding officer of each house of t he Legislature, and the
Attorney General tha t:
1. Identifies securities sold, redeemed, divested, or withdrawn
in compliance with subsection D of Section 12003 of Title 74 of the
Oklahoma Statutes;
2. Identifies prohibited investments under subsection F of
Section 12003 of Title 74 of the Oklahoma Statutes ; and
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3. Summarizes any changes made under subse ction E of Section
12003 of Title 74 of the Oklaho ma Statutes.
B. The Attorney General may bring any ac tion necessary to
enforce the Higher Education Energy Discrimination E limination Act
of 2023.
SECTION 5. This act shall become effective November 1, 2023.
59-1-1500 RD 1/17/2023 1:03:59 PM