Oklahoma 2025 Regular Session

Oklahoma House Bill HB1561 Compare Versions

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3		-	~~ENGR~~. ~~H. B. NO. 1561 Page 1~~ 1
	2	+	HB1561 HFLR Page 1
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28		-	ENGROSSED HOUSE
29		-	BILL NO. 1561 By: Duel, Lepak, Manger, and
30		-	Archer of the House
	28	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	29	+
	30	+	STATE OF OKLAHOMA
	31	+
	32	+	1st Session of the 60th Legislature (2025)
	33	+
	34	+	COMMITTEE SUBSTITUTE
	35	+	FOR
	36	+	HOUSE BILL NO. 1561 By: Duel of the House
31	37
32	38		and
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34	40		Hines of the Senate
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40		-	An Act relating to public finance; enacting the Foreign
41		-	Adversary Divestment Act of 2025; making findings; defining
42		-	terms; prohibiting certa in entities from owning certain
43		-	investments; prescribing procedures for divestment;
44		-	prescribing duties for the State Treasurer; providing
45		-	immunity from certain liability for specific pension systems;
46		-	providing for affirmative defense; providing for
47		-	indemnification; providing for codification; and providing an
48		-	effective date.
	46	+	COMMITTEE SUBSTITUTE
	47	+
	48	+	An Act relating to public finance; enacting the
	49	+	Foreign Adversary Divestment Act of 2025; making
	50	+	findings; defining terms; prohibiting certain
	51	+	entities from owning certain investments; prescribing
	52	+	procedures for divestment; prescribing duties for the
	53	+	State Treasurer; prov iding for construction of act;
	54	+	providing immunity from certain liability for
	55	+	specific pension systems; providing for affirmative
	56	+	defense; providing for indemnification; providing for
	57	+	codification; and providing an effective date.
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53	62		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
54	63		SECTION 1. NEW LAW A new section of law to be codified
55	64		in the Oklahoma Statutes as Section 11001 of Title 62, unless there
56	65		is created a duplication in numbering, reads as follows:
57	66		This act shall be known and may be cited as the “Foreign
58	67		Adversary Divestment Act of 2025”.
59		-	SECTION 2. NEW LAW A new section of law to be codified
60		-	in the Oklahoma Statutes as Section 11002 of Title 62, unless there
61		-	is created a duplication in numbering, reads as follows:
62		-	The Foreign Adversary Divestment Act of 2025 will ensure that
63		-	Oklahoma public investment dollars are not put at risk in countries
64		-
65		-	ENGR. H. B. NO. 1561 Page 2 1
	68	+	HB1561 HFLR Page 2
	69	+	BOLD FACE denotes Committee Amendments. 1
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	94	+	SECTION 2. NEW LAW A new section of law to be codified
	95	+	in the Oklahoma Statutes as Section 11002 of Title 62, unless there
	96	+	is created a duplication in n umbering, reads as follows:
	97	+	The Foreign Adversary Divestment Act of 2025 will ensure that
	98	+	Oklahoma public investment dollars are not put at risk in countries
90	99		of concern and do not fund the development of the military
91	100		technologies and surveillance tools of foreign adversaries that
92	101		impede the furthering of Oklahoma’s interests and the interests of
93	102		the United States of America, by requiring the divestment of public
94	103		pension dollars and university endowment funds from countries of
95	104		concern.
96	105		SECTION 3. NEW LAW A new section of law to be codified
97	106		in the Oklahoma Statutes as Section 11003 of Title 62, unless there
98	107		is created a duplication in numbering, reads as follows:
99	108		As used in this act:
100	109		1. “Company” shall mean any sole proprietorship, or ganization,
101	110		association, corporation, partnership, joint venture, limited
102	111		partnership, limited liability partnership, limited liability
103	112		company, or other entity or business association, including wholly
104	113		owned subsidiaries, majority -owned subsidiaries, pare nt companies,
105	114		or affiliates of those entities or business associations, that exist
106	115		for the purpose of making profit;
107	116		2. “Divestment” shall mean the sale or otherwise contractual
108	117		end of any current or planned investments;
109		-	3. “Domicile” shall mean either the country in which a company
110		-	is registered, where the company’s affairs are primarily completed,
111		-	or where the majority of ownership share is held;
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113		-	ENGR. H. B. NO. 1561 Page 3 1
	118	+	HB1561 HFLR Page 3
	119	+	BOLD FACE denotes Committee Amendments. 1
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	144	+	3. “Domicile” shall mean either the country in which a company
	145	+	is registered, where the company’s affairs are primarily completed,
	146	+	or where the majority of ownership share is held;
138	147		4. “Foreign adversary” shall mean any country designated by the
139	148		United States Secretary of State as hostile or a Country of
140	149		Particular Concern (CPC) ;
141	150		5. “Investment” shall mean any transfer of funds in any active
142	151		or passive, direct or indirect structure which seeks to generate
143	152		revenue or accomplish any other gain, including nonmonetary;
144	153		6. “Official governmen t capacity” shall mean any role, elected
145	154		or appointed, in a government or its subsidiaries;
146	155		7. “State-managed fund” shall mean any short - or long-term
147	156		investment structure which is state -managed, state-run, state-
148	157		controlled, or otherwise overseen by Oklah oma, a state agency, or
149	158		any political subdivision within Oklahoma or agency controlled by
150	159		the same, in which the state or subdivision has primary discretion
151	160		over or vested interest in. Nothing in this definition shall be
152	161		construed so as to not apply to an y fund which is subject to the
153	162		purview or direction of Oklahoma or applicable subdivision, and
154	163		populated, wholly or in part, with state funds, but managed by a
155	164		third-party entity, such as a fiduciary. This shall include, but is
156	165		not limited to:
157	166		a. public pension funds, public retirement funds, or
158	167		other state-sponsored funds, that is sponsored,
159		-	maintained, or contributed to or required to be
160		-	contributed to by Oklahoma or any locality within
161		-	Oklahoma, or any subsidiaries of such ,
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163		-	ENGR. H. B. NO. 1561 Page 4 1
	168	+	HB1561 HFLR Page 4
	169	+	BOLD FACE denotes Committee Amendments. 1
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	194	+	maintained, or contributed to or required to be
	195	+	contributed to by Oklahoma or any locality within
	196	+	Oklahoma, or any subsidiaries of such,
188	197		b. city, county, or other loc al or municipal entity
189	198		investment funds, “rainy day funds”, or other
190	199		political-subdivision-controlled investment
191	200		structures, and
192	201		c. university or college endowments, trusts, or other
193	202		structure which constitutes, wholly or in part, a
194	203		public institution of h igher education’s investable
195	204		assets; and
196	205		8. “State-owned enterprise” shall mean any company owned or
197	206		controlled, in whole or in part, by a government or by individuals
198	207		acting in official government capacities in any form.
199	208		SECTION 4. NEW LAW A new section of law to be codified
200	209		in the Oklahoma Statutes as Section 11004 of Title 62, unless there
201	210		is created a duplication in numbering, reads as follows:
202	211		A. All state and local managed funds are prohibited from
203	212		holding investments in any :
204	213		1. Foreign adversary;
205	214		2. Company owned or controlled by a foreign adversary;
206	215		3. State-owned enterprise of a foreign adversary;
207	216		4. Company domiciled within a foreign adversary; or
208	217		5. Other entity within a foreign adversary.
209		-	B. All state and local managed funds are prohibited from
210		-	investing or depositing public funds in any bank that is domiciled
211		-	or has its principal place of business in a foreign adversary.
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213		-	ENGR. H. B. NO. 1561 Page 5 1
	218	+	HB1561 HFLR Page 5
	219	+	BOLD FACE denotes Committee Amendments. 1
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	244	+	B. All state and local m anaged funds are prohibited from
	245	+	investing or depositing public funds in any bank that is domiciled
	246	+	or has its principal place of business in a foreign adversary.
238	247		SECTION 5. NEW LAW A new section of law to be codified
239	248		in the Oklahoma Statutes as Section 11005 of Title 62, unless there
240	249		is created a duplication in numbering, reads as follows:
241		-	A. All state-managed funds are required to divest of any
242		-	holdings prohibited in this act by January 1, 2036, or ten (10)
243		-	years after the effective date of this act, whichever is earliest.
244		-	B. For purposes of this section, “divest” shall mean reducing
245		-	the value of prohibited investments to no more than five -hundredths
246		-	of one percent (0.0005) of the market value of all assets unde r
247		-	management by a state or locally managed fund.
248		-	C. For the purposes of this section, any time a new country is
249		-	designated as a foreign adversary, all state -mandated funds are
250		-	required to divest of any holdings in the newly designated foreign
251		-	adversary within ten (10) years after the designation of the country
252		-	as a foreign adversary. If a country is re -designated as a foreign
253		-	adversary after previously being removed from this list, the ten-
254		-	year divestment period shall be from the last time the country is
255		-	designated as a foreign adversary.
	250	+	A. All state-managed funds are required to immediately in good
	251	+	faith begin divestment of any holdings prohibited in this act, with
	252	+	total divestment achieved by January 1, 2028, or two (2) years after
	253	+	the effective date of this act, whichever is earliest.
	254	+	B. For purposes of this section, “total divestment” shall mean
	255	+	reducing the value of prohibited investments to no more than five -
	256	+	hundredths of one percent (0.0005) of the market value of all assets
	257	+	under management by a state or locally managed fund.
256	258		SECTION 6. NEW LAW A new section of law to be codified
257	259		in the Oklahoma Statutes as Section 11006 of Title 62, unless there
258	260		is created a duplication in numbering, reads as follows:
259	261		A. The State Treasurer shall develop a notification system to
260	262		be able to identify foreign adversaries and countries of particular
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262		-	ENGR. H. B. NO. 1561 Page 6 1
	263	+	concern. Such information shall be available to the entities
	264	+	subject to the provisions of this act.
	265	+	B. No later than six (6) months after the effective date of
	266	+	this act, the entities subject to the provisions of this act shall
	267	+	identify all companies that are state -owned enterprises of, are
	268	+	HB1561 HFLR Page 6
	269	+	BOLD FACE denotes Committee Amendments. 1
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287		-	Concern. Such information shall be available to the entities
288		-	subject to the provisions of this act.
289		-	B. No later than six (6) months after th e effective date of
290		-	this act, the entities subject to the provisions of this act shall
291		-	identify all companies that are state -owned enterprises of, are
292	294		domiciled within, whose primary a ffairs are conducted within, or
293	295		whose majority ownership is held within a foreign adversary, and
294	296		companies owned or controlled by a foreign adversary. The
295		-	identification process shall include , but are not limited to , the
	297	+	identification process shall include, but are not limited to the
296	298		following:
297	299		1. Reviewing and relyin g on publicly available information
298	300		regarding companies that are state -owned enterprises of, are
299	301		domiciled within, whose primary affairs are conducted within, or
300	302		whose majority ownership share is held within a foreign adversary,
301	303		including information provi ded by nonprofit organizations, research
302	304		firms, and government entities;
303	305		2. Contacting asset managers and fund managers contracted by a
304	306		state-managed fund that invest in companies and in funds that are
305	307		state-owned enterprises of, are domiciled within, who se primary
306	308		affairs are conducted within, or whose majority or plurality
307		-	ownership share is held within a foreign adversary; ~~and~~
	309	+	ownership share is held within a foreign adversary;
308	310		3. Contacting other institutional investors that have divested
309	311		from or engaged with companies that are state -owned enterprises of,
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311		-	ENGR. H. B. NO. 1561 Page 7 1
	312	+	are domiciled within, whose primary affairs are conducted within, or
	313	+	whose majority ownership share is held within a foreign adversary;
	314	+	and
	315	+	4. Retaining an independent research firm to identify companies
	316	+	that are directly or indirectly investment holdings of a state or
	317	+	local fund that are state -owned enterprises of, are domiciled
	318	+	HB1561 HFLR Page 7
	319	+	BOLD FACE denotes Committee Amendments. 1
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336		-	are domiciled within, whose primary affairs are conducted within, or
337		-	whose majority ownership share is held within a foreign adversary .
	344	+	within, whose primary affairs are conducted within, or whose
	345	+	majority or plurality ownership share is held within a foreign
	346	+	adversary.
338	347		SECTION 7. NEW LAW A new section of law to be codified
339	348		in the Oklahoma Statutes as Section 11007 of Title 62, unless there
	349	+	is created a duplication in numbering, reads as follows:
	350	+	Nothing in this act shall be construed so as to inhibit,
	351	+	conflict, impede, or otherwise interfer e with any required financial
	352	+	safeguards, fiduciary requirements, and other sound investment
	353	+	criteria which any state -managed fund is subject to, nor any
	354	+	applicable state or federal law.
	355	+	SECTION 8. NEW LAW A new section of law to b e codified
	356	+	in the Oklahoma Statutes as Section 11008 of Title 62, unless there
340	357		is created a duplication in numbering, reads as follows:
341	358		A. As used in this section, "public pension system" means the:
342	359		1. Oklahoma Firefighters Pension and Retirement System;
343	360		2. Oklahoma Police Pension and Retirement System;
344	361		3. Uniform Retirement System for Justices and Judges;
345	362		4. Oklahoma Law Enforcement Retirement System;
346	363		5. Teachers' Retirement System of Oklahoma; and
347	364		6. Oklahoma Public Employees Retirement System.
348	365		B. No public pension system shall be liable in any action for
349	366		damages based upon the loss or alleged loss of value in pension
350	367		system assets based upon the provisions of this act. The provisions
351		-	of this subsection shall also be applicable to any action filed
352		-	naming the governing board of a public pension s ystem, one or more
353		-	members of the governing board of a public pension system, or any of
354		-	its employees as defendants.
355		-	C. In any action filed naming a public pension system or any
356		-	other person described in subsection B of this section as
357		-	defendants, it shall be a defense to the action that the value of
358		-	pension system assets i ncreased at any time after the date of the
359		-	alleged decrease in the value of pension system assets resulting
360		-
361		-	ENGR. H. B. NO. 1561 Page 8 1
	368	+	HB1561 HFLR Page 8
	369	+	BOLD FACE denotes Committee Amendments. 1
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	394	+	of this subsection shall also be applicable to any action filed
	395	+	naming the governing board of a public pension system, one or more
	396	+	members of the governing board of a public pension system, or any of
	397	+	its employees as defendants.
	398	+	C. In any action filed naming a public pension system or any
	399	+	other person described in su bsection B of this section as
	400	+	defendants, it shall be a defense to the action that the value of
	401	+	pension system assets increased at any time after the date of the
	402	+	alleged decrease in the value of pension system assets resulting
386	403		from failure to comply with t he provisions of this act. The
387	404		provisions of this subsection shall be applicable with regard to an
388	405		increase in the value of pension system assets occurring at any time
389		-	after such date, including the date as of which the action is filed.
	406	+	after such date including the date as of which the action is filed.
390	407		For purposes of this section, any increase in the value of pension
391	408		system assets occurring during the pendency of an appeal from a
392	409		final judgment or other order establishing liability for damages may
393	410		also be used in defense of the claim for damages and the time period
394	411		shall be inclusive of any period during which a case is remanded
395	412		from an appellate court to a district court.
396		-	SECTION 8. NEW LAW A new section of law to be codified
397		-	in the Oklahoma Statutes as Section ~~11008~~ of Title 62, unless there
	413	+	SECTION 9. NEW LAW A new section of law to be codified
	414	+	in the Oklahoma Statutes as Section 11009 of Title 62, unless there
398	415		is created a duplica tion in numbering, reads as follows:
399	416		A. The State of Oklahoma, public pension system plans as
400	417		defined in this act, as well as officers, board members, and
401		-	employees of the state or the public pension systems are immune from
402		-	civil liability for any act or omission related to any provisio n
403		-	under this act.
404		-	B. In addition to the immunity provided under subsection A of
405		-	this section, officers, board members, and employees of the state or
406		-	the public pension system plans are entitled to indemnification from
407		-	the public pension system for all losses, costs and expenses,
408		-	including reasonable attorney fees, associate d with defending
409		-	against any claim or suit related to any provision of this act.
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411		-	ENGR. H. B. NO. 1561 Page 9 1
	418	+	HB1561 HFLR Page 9
	419	+	BOLD FACE denotes Committee Amendments. 1
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436		-	SECTION 9. This act shall become effective November 1, 2025.
437		-	Passed the House of Represe ntatives the 26th day of March, 2025.
	444	+	employees of the state or the public pension systems are immune from
	445	+	civil liability for any act or omission related to any provision
	446	+	under this act.
	447	+	B. In addition to the immunity provided under subsection A of
	448	+	this section, officers, board members, and employees of the state or
	449	+	the public pension system plans are entitled to indemnification from
	450	+	the public pension system for all losses, costs and expenses,
	451	+	including reasonable attorney fees, associated with defending
	452	+	against any claim or suit related to any provision of this act.
	453	+	SECTION 10. This act shall become effective November 1, 2025.
438	454
439		-
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441		-
442		-	Presiding Officer of the House
443		-	of Representatives
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447		-	Passed the Senate the ___ day of __________, 2025.
448		-
449		-
450		-
451		-
452		-	Presiding Officer of the Senate
	455	+	COMMITTEE REPORT BY: COMMITTEE ON GOVERNMENT OVERSIGHT, dated
	456	+	03/05/2025 - DO PASS, As Amended and Coauthored.
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