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53	53	STATE OF OKLAHOMA
54	54
55	55	1st Session of the 60th Legislature (2025)
56	56
57	57	SENATE BILL 919 By: Green
58	58
59	59
60	60
61	61
62	62
63	63	AS INTRODUCED
64	64
65	65	An Act relating to the Commissioners of the Land
66	66	Office; defining term; establishing restrictio ns on
67	67	certain agricultural leases; amending 18 O.S. 2021,
68	68	Section 955, which relates to limitations on
69	69	ownership of farming and ranc hing business
70	70	corporations; providing exception for qualification
71	71	of certain limited liability company; modifying fine
72	72	amount; updating statutory language; updating
73	73	statutory reference; amending 64 O.S. 2021, Section
74	74	1013, as amended by Section 40, Chapter 228, O.S.L.
75	75	2022 (64 O.S. Supp. 2024, Section 1013), which
76	76	relates to investment of funds; removing certain
77	77	investment exemption; providing for codification; and
78	78	providing an effective date .
79	79
80	80
81	81
82	82
83	83	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
84	84	SECTION 1. NEW LAW A new section of law to be codified
85	85	in the Oklahoma Statutes as Section 1023a o f Title 64, unless there
86	86	is created a duplication in numbering, reads as follo ws:
87	87	A. For the purposes of leases entered into by the Commissioners
88	88	of the Land Office, “commercial lease” shall mean a lease for those
89	89	trust lands which may have a greater valu e or use which enables it
90	90	to earn more income per year than if used strictly for agricultural
91	91	purposes. Any lease entered into for the purpose of renewable
92	92
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143	143	energy generation on and after the effective date of this act shall
144	144	be considered a commercial leas e.
145	145	B. No agricultural lease shall be executed in favor of any
146	146	corporation or its agent, or a third party for the use and benefit
147	147	of a corporation, except as provided in Section 951 et seq. of Title
148	148	18 of the Oklahoma Statutes.
149	149	SECTION 2. AMENDATORY 18 O.S. 2021, Section 955, is
150	150	amended to read as follows:
151	151	Section 955. A. No person, corporation, association , or any
152	152	other entity shall engage in farming or ranching, or own or lease
153	153	any interest in land to be used in the business of farming or
154	154	ranching, except the following:
155	155	1. Natural persons and the estate s of such persons;
156	156	2. Trustees of trusts; provided that:
157	157	a. each beneficiary shall be a person or entity
158	158	enumerated in paragraphs 1 through 5 of this
159	159	subsection, and
160	160	b. there shall not be more than ten beneficiaries unless
161	161	the beneficiaries in excess of ten are related as
162	162	lineal descendants or are or have been related by
163	163	marriage or adoption to lineal descendants, and
164	164	c. at least sixty-five percent (65%) of the trust ’s
165	165	annual gross receipts shall be derived from farming or
166	166	ranching, or from allowing others to extract minerals
167	167
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218	218	underlying lands held by the trust. If the trust
219	219	cannot comply with the annual gross receipts test, the
220	220	trust may furnish records of its gross receipts for
221	221	each of the previous five (5) years, or for each year
222	222	that it has been in existence if less than five (5)
223	223	years, and the average of such annual gross receipts
224	224	may be used for purposes of complying with this
225	225	section;
226	226	3. Corporations, as provided for in Sec tions 951 through 954 of
227	227	this title, or as otherwise permitted by law;
228	228	4. Partnerships and limited partnerships; provided that:
229	229	a. each partner shall be a person or entity enumerated in
230	230	paragraphs 1 through 5 of this subsection, and
231	231	b. there shall not be more than ten partners unless said
232	232	the partners in excess of ten are related as lineal
233	233	descendants or are or have been related by marriage or
234	234	adoption to lineal descendants, and
235	235	c. at least sixty-five percent (65%) of the partnership ’s
236	236	annual gross receipt s shall be derived from farming or
237	237	ranching, or from allowing others to extrac t minerals
238	238	underlying lands held by the partnership. If the
239	239	partnership cannot comply with the annual gross
240	240	receipts test, the partnership may furnish records of
241	241	its gross receipts for each of the previous five (5)
242	242
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293	293	years, or for each year that it has been in existence
294	294	if less than five (5) years, and the average of such
295	295	annual gross receipts may be used for purposes of
296	296	complying with this section; and
297	297	5. Limited liability compan ies formed pursuant to the Oklahoma
298	298	Limited Liability Company Act; provided th at:
299	299	a. each member shall be a person or entity enumerated in
300	300	paragraphs 1 through 5 of this subsection, and
301	301	b. there shall not be more than thirty members unless
302	302	said the members in excess of thirty are related as
303	303	lineal descendants or are or have been related by
304	304	marriage or adoption to lineal descendants, and
305	305	c. at least sixty-five percent (65%) of the limited
306	306	liability company’s annual gross receipts shall be
307	307	derived from farming or ranching, or from allowing
308	308	others to extract minerals underlying lands he ld by
309	309	the limited liability company. If the limited
310	310	liability company cannot comply with the annual gross
311	311	receipts test, the limited liability company may
312	312	furnish records of its gross receipts for each of the
313	313	previous five (5) years, or for each year that it has
314	314	been in existence if less than five (5) years, and the
315	315	average of such annual gross receipts may be used for
316	316	purposes of complying with this section , and
317	317
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368	368	d. the limited liability company is not engaged in
369	369	renewable energy generation .
370	370	B. Any farming or ranching corporation, trust, partnership,
371	371	limited partnership, limited liability company or other entity which
372	372	violates any provisions of this section shall be fined an amou nt not
373	373	to exceed Five Hundred Dollars ($500.00) per day until the violation
374	374	ceases. Any other person or entity who knowingly violates this
375	375	section shall be deemed guilty of a misdemeanor.
376	376	C. The provisions of this act Section 951 et seq. of this title
377	377	shall not apply to interests in land acquired prior to June 1, 1978.
378	378	SECTION 3. AMENDATORY 64 O.S. 2021, Section 1013, as
379	379	amended by Section 40, Chapter 228, O.S.L. 2022 (64 O.S. Supp. 2024,
380	380	Section 1013), is amended to read as foll ows:
381	381	Section 1013. A. The Commissioners of the Land Office shall be
382	382	responsible for the investment of the permanent school funds, other
383	383	educational funds and public building funds solely in the best
384	384	interests of the current and future beneficiaries. The
385	385	Commissioners of the Land Office shall make investments:
386	386	1. For the exclusiv e purpose of:
387	387	a. providing maximum benefits to current and future
388	388	beneficiaries, and
389	389	b. defraying reasonable expenses of administering the
390	390	trust funds;
391	391
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442	442	2. With the care, skill, prudence and diligence under the
443	443	circumstances then prevailing that a prudent person acting in a like
444	444	enterprise of a like character and with like aims would use; and
445	445	3. By diversifying the investments of the trust funds so as to
446	446	minimize the risk of larg e losses.
447	447	B. The permanent school fund and other educational funds may
448	448	only be invested in bonds issued in the United States, United States
449	449	dollar denominated or other investments settled in United States
450	450	dollars or traded on the United States exchange ma rkets and real
451	451	property to be owned or acquired by the Commissioners of the Land
452	452	Office. The Commissioners of the Land Office shall not invest more
453	453	than sixty percent (60%) of the trust fund investments in equity
454	454	securities. The Commissioners of the Land Office are further
455	455	authorized to acquire, purchase, exchange and grant any re al
456	456	property under its jurisdiction as is necessary to carry out the
457	457	investment in the real property. The Commissioners of the Land
458	458	Office shall not invest more than five percent (5%) of the total
459	459	value of the assets of the permanent school funds in connection with
460	460	investments in real property. The calculation of investments in
461	461	real property within the five percent (5%) cap shall not include the
462	462	value of real property under long -term lease to the State of
463	463	Oklahoma, agencies of the state or subdivisions the reof. In no case
464	464	shall the Commissioners of the Land Office bid against private -
465	465
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516	516	sector bidders above the appraised value of any property to be
517	517	acquired.
518	518	C. The Commissioners sh all establish an investment committee.
519	519	The investment committee shall be composed of not more than three
520	520	members of the Commissioners of the Land Office or their designees.
521	521	The committee shall make recommendations to the Commissioners of the
522	522	Land Office on all matters related to the choice of managers of the
523	523	assets of the funds, o n the establishment of investment and fund
524	524	management guidelines, and in planning future investment policy.
525	525	The committee shall have no authority to act on behalf of the
526	526	Commissioners of the Land Office in any circumstances whatsoever.
527	527	No recommendations of the committee shall have effect as an action
528	528	of the Commissioners of the Land Office or take effect without the
529	529	approval of the Commissioners as provided by law. The Commiss ioners
530	530	shall promulgate and adopt on an annual basis an investment plan.
531	531	The investment plan shall state the criteria for selecting
532	532	investment managers, the allocation of assets among investment
533	533	managers, and established standards of investment and fund
534	534	management.
535	535	D. The Commissioners shall retain qualified investment managers
536	536	to provide for investment of the fund monies and for the management
537	537	of investment real property pursuant to the investment plan.
538	538	Investment managers shall be chosen by a solicitat ion of proposals
539	539	on a competitive bid basis pursuant to standards set by the
540	540
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591	591	Commissioners. Subject to the investment plan, each investment
592	592	manager shall have full discretion in the management of the funds or
593	593	investment real property allocated to the inve stment managers. The
594	594	funds allocated to investment managers shall be actively managed by
595	595	them, which may include selling investments and realizing losses if
596	596	the action is considered advantageous to longer term return
597	597	maximization. Because of the total re turn objective, no distinction
598	598	shall be made for management and performance ev aluation purposes
599	599	between realized and unrealized capital gains and losses.
600	600	E. The Commissioners shall take any measures they deem
601	601	appropriate to safeguard custody of securities and other assets of
602	602	the trusts.
603	603	F. By September 1 of each year, the Commissioners shall develop
604	604	a written investment plan for the trust funds.
605	605	G. The Commissioners shall compile a quarterly financial report
606	606	showing the performance of all the combined fu nds under their
607	607	control on a fiscal year basis. The report shall contain a li st of
608	608	all investments made by the Commissioners and a list of any
609	609	commissions, fees or payments made for services regarding the
610	610	investments for that reporting period. The report shall be based on
611	611	market values and shall be compiled pursuant to uniform reporting
612	612	standards prescribed by the Oklahoma State Pension Commission for
613	613	all state retirement systems. The report shall be distributed to
614	614
615	615
616	616	Req. No. 183 Page 9 1
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664	664
665	665	the Oklahoma State Pension Commission, the Cash Management and
666	666	Investment Oversight Commission, and the Legislative S ervice Bureau.
667	667	H. Before January 1 of each year, the Commissioners shall
668	668	publish an annual report of all Trust operations, presented in a
669	669	simple and easily understood manner to the extent possible. The
670	670	report shall be submitted to the Governor, the Speaker of the House
671	671	of Representatives, the President Pro Tempore of the Senate, the
672	672	State Department of Education and each higher education beneficiary.
673	673	The annual report shall cov er the operation of the Trusts during the
674	674	past fiscal year including income, d isbursements and the financial
675	675	condition of the Trusts at the end of each fiscal year on a cash
676	676	basis. The annual report shall also contain a summary of the assets
677	677	of each trust and current market value as of the report date.
678	678	I. The Cash Management and Investment Oversight Commission
679	679	shall review reports prepared by the Commissioners of the Land
680	680	Office pursuant to this subsection and shall make recommendations
681	681	regarding the investment strategies and practices, the development
682	682	of internal auditing procedur es and practices and any other matters
683	683	as determined necessary and applicable.
684	684	J. The Commissioners of the Land Office shall select one or
685	685	more custodial banks to settle transac tions involving the investment
686	686	of the funds under the control of the Commissioners of the Land
687	687	Office. The Commissioners of the Land Office shall review the
688	688	performance of each custodial bank at least once every year. The
689	689
690	690
691	691	Req. No. 183 Page 10 1
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740	740	Commissioners of the Land Office shall require a written competitive
741	741	bid every ten (10) years. The custodial bank shall have a minimum
742	742	of Five Hundred Million Dollars ($500,000,000.00) in assets to be
743	743	eligible for selection. Any out -of-state custodial bank shall have
744	744	a service agent in the State of Oklahoma so that service of summons
745	745	or legal notice may be had on the designated agent, and the bank
746	746	shall submit to the jurisdiction of Oklahoma state courts for
747	747	resolution of any and all disputes. In order to be eligible for
748	748	selection, the custodial bank shall allow electronic access to all
749	749	transaction and portfolio reports maintained by the custodial bank
750	750	involving the investment of state funds under control of the
751	751	Commissioners of the Land Office and to the Cash Management and
752	752	Investment Oversight Commission. The requirement for electronic
753	753	access shall be incorporated into any contract between the
754	754	Commissioners of the Land Office and the custodial bank. Neither
755	755	the Commissioners of the Land Office nor the custodial bank shall
756	756	permit any of the funds under the control of the Commissioners of
757	757	the Land Office or any of the documents, instruments, securities or
758	758	other evidence of a right to be paid money to be located in any
759	759	place other than within a jurisdiction or territory under the
760	760	control or regulatory power of the United States government.
761	761	SECTION 4. This act shall become effective November 1, 2025.
762	762
763	763	60-1-183 RD 1/16/2025 11:16:25 AM

Oklahoma 2025 Regular Session

Oklahoma Senate Bill SB919 Compare Versions