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1 STATE OF OKLAHOMA
1
2 1st Session of the 60th Legislature (2025)
2
3 SENATE BILL 714 By: Rader
3
4
4
5
5
6 AS INTRODUCED
6
7 An Act relating to state government; amending
7 Sections 2, 3, 4, and 5, Chapter 231, O.S.L. 2022 (74
8 O.S. Supp. 2024, Sections 12002, 12003, 12004, and
8 12005), which relate to the Energy Discrimination
9 Elimination Act of 2022; modifying and defining
9 terms; removing restrictions on certain legal
10 proceedings; transferring authority for enforcement
10 of act; modifying process for determination of listed
11 financial companies; requiring reporting; providing
11 exemptions for certain state governmental entities
12 due to fiduciary responsibilities; directing rule
12 promulgation; removing political subdivisions from
13 certain provisions of act; updating statutory
13 language; updating statutory language; repealing
14 Section 6, Chapter 231, O.S.L. 2022 (74 O.S. Supp.
14 2024, Section 12006), which relates to contracts
15 entered into with financial companies; providing an
15 effective date; and declaring an emergency.
16
16
17
17
18 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
18
19 SECTION 1. AMENDATORY Section 2, Chapter 231, O.S.L.
19
20 2022 (74 O.S. Supp. 2024, Section 12002), is amended to read as
20
21 follows:
21
22 Section 12002. A. As used in the Energy Discrimination
22
23 Elimination Act of 2022:
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24
24
Req. No. 1257 Page 1
1 1. "Attorney General" means the Attorney General or his or her
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2 designee;
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3 2. "Boycott energy company" means, without an ordinary business
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4 purpose, refusing to deal with, terminating business activities
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5 with, divesting from, or otherwise taking any action that is
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6 intended to penalize, inflict economic harm on, or limit limiting
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7 commercial relations with a company because the company:
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8 a. engages in the exploration, production, utilization,
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9 transportation, sale, or manufacturing of fossil-fuel-
9
10 based energy and does not commit or pledge to meet
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11 environmental standards beyond applicable federal and
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12 state law, or
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13 b. does business with a company described by subparagraph
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14 a of this paragraph;
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15 2. 3. "Company" means a for-profit sole proprietorship,
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16 organization, association, corporation, partnership, joint venture,
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17 limited partnership, limited liability partnership, or limited
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18 liability company, including a wholly owned subsidiary, majority-
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19 owned subsidiary, parent company, or affiliate of those entities or
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20 business associations, that exists to make a profit;
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21 3. "Treasurer" means the State Treasurer or their designee;
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22 4. "Direct holdings" means, with respect to a financial
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23 company, all securities of that financial company held directly by a
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24
24
Req. No. 1257 Page 2
1 state governmental entity in an account or fund in which a state
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2 governmental entity owns all shares or interests;
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3 5. "Financial company" means a publicly traded financial
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4 services, banking, or investment company;
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5 6. "Indirect holdings" means, with respect to a financial
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6 company, all securities of that financial company held in an account
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7 or fund, such as a mutual fund, managed by one or more persons not
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8 employed by a state governmental entity, in which the state
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9 governmental entity owns shares or interests together with other
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10 investors not subject to the provisions of this act. The term does
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11 not include money invested under a plan described by Section 401(a),
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12 401(k), or 457 of the Internal Revenue Code of 1986;
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13 7. "Listed financial company" means a financial company listed
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14 by the Treasurer Attorney General; and
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15 8. "Ordinary business purpose" means a purpose directly related
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16 to financial return or financial risk mitigation. A company may
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17 reasonably be determined to have boycotted an energy company without
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18 an ordinary business purpose based on its public statements or
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19 actions including, but not limited to:
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20 a. prospectuses, reports, communications with portfolio
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21 companies, or shareholder votes, or
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22 b. participation in, affiliation with, or status as a
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23 signatory to, any coalition, initiative, joint
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24 statement of principles, or agreement, to act or to
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Req. No. 1257 Page 3
1 endeavor to act predominantly in furtherance of
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2 environmental, social, political, or ideological
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3 interests; and
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4 9. "State governmental entity" means all state retirement
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5 systems.
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6 B. With respect to actions taken in compliance with the Energy
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7 Discrimination Elimination Act of 2022, including all good-faith
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8 determinations regarding financial companies as required by this
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9 act, a state governmental entity and the Treasurer Attorney General
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10 are exempt from any conflicting statutory or common law obligations
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11 including any obligations with respect to making investments,
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12 divesting from any investment, preparing or maintaining any list of
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13 financial companies, or choosing asset managers, investment funds,
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14 or investments for the state governmental entity's securities
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15 portfolios.
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16 C. In a cause of action based on an action, inaction, decision,
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17 divestment, investment, financial company communication, report, or
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18 other determination made or taken in connection with the Energy
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19 Discrimination Elimination Act of 2022, the state shall indemnify
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20 and hold harmless for actual damages, court costs, and attorney fees
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21 adjudged against, and defend:
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22 1. An employee, a member of the governing body, or any other
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23 officer of a state governmental entity;
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24 2. A contractor of a state governmental entity;
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1 3. A former employee, a former member of the governing body, or
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2 any other former officer of a state governmental entity who was an
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3 employee, member of the governing body, or other officer when the
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4 act or omission on which the damages are based occurred;
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5 4. A former contractor of a state governmental entity who was a
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6 contractor when the act or omission on which the damages are based
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7 occurred; and
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8 5. A state governmental entity.
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9 D. 1. A person, including a member, retiree, or beneficiary of
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10 a retirement system to which the Energy Discrimination Elimination
10
11 Act of 2022 applies, an association, a research firm, a financial
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12 company, or any other person shall not sue or pursue a private cause
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13 of action against the state, a state governmental entity, a current
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14 or former employee, a member of the governing body, or any other
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15 officer of a state governmental entity, or a contractor of a state
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16 governmental entity, for any claim or cause of action, including
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17 breach of fiduciary duty, or for violation of any constitutional,
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18 statutory, or regulatory requirement in connection with any action,
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19 inaction, decision, divestment, investment, financial company
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20 communication, report, or other determination made or taken in
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21 connection with this act.
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22 2. A person who files suit against the state, a state
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23 governmental entity, an employee, a member of the governing body, or
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24 any other officer of a state governmental entity, or a contractor of
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1 a state governmental entity, is liable for paying the costs and
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2 attorney fees of a person sued in violation of this section.
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3 3. A state governmental entity shall not be subject to any
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4 requirement of this act if the state governmental entity determines
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5 that such requirement would be inconsistent with its fiduciary
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6 responsibility with respect to the investment of entity assets or
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7 other duties imposed by law relating to the investment of entity
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8 assets. A state governmental entity that takes the exemption under
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9 this subsection shall electronically submit a report to the
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10 President Pro Tempore of the Senate, the Speaker of the House of
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11 Representatives, and the Attorney General.
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12 SECTION 2. AMENDATORY Section 3, Chapter 231, O.S.L.
12
13 2022 (74 O.S. Supp. 2024, Section 12003), is amended to read as
13
14 follows:
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15 Section 12003. A. 1. The Treasurer Attorney General shall
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16 prepare and maintain and provide to each state governmental entity a
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17 list of financial companies that boycott energy companies. In
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18 maintaining the list, the Treasurer may Attorney General shall:
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19 a. review and rely, as appropriate in the Treasurer's
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20 Attorney General's judgment, on publicly available
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21 information regarding financial companies including
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22 information provided by the state, nonprofit
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23 organizations, research firms, international
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24 organizations, and governmental entities, and
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1 b. verify that the financial companies on the list are
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2 publicly traded,
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3 c. request written verification from a financial company
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4 that it does not boycott energy companies and rely, as
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5 appropriate in the Treasurer's Attorney General's
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6 judgment and without conducting further investigation,
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7 research, or inquiry, on a financial company's written
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8 response to the request, and
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9 d. develop and publish criteria for the definition of a
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10 boycott energy company and publish the criteria for
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11 removing a company from the list.
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12 2. A The Attorney General, after performing his or her due
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13 diligence, may presume that a financial company that fails to
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14 provide to the Treasurer a written verification under subparagraph b
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15 of paragraph 1 of this subsection before the sixty-first day after
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16 receiving the verification request from the Treasurer is presumed to
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17 be is boycotting energy companies.
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18 3. The Attorney General shall, as part of the list, provide
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19 information to support the determination that a financial company is
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20 boycotting energy companies.
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21 4. The Attorney General shall notify in writing each financial
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22 company that is included on the list, the evidence used to place
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23 that company on the list, and the process for being removed from the
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24 list.
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1 5. The Treasurer Attorney General shall update the list
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2 annually or more often as the Treasurer considers necessary, but not
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3 more often than quarterly, based on information from, among other
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4 sources, those listed in subparagraph a of paragraph 1 of this
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5 subsection by completing the verification process as outlined in
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6 this subsection.
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7 4. 6. Not later than the thirtieth day after the date the list
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8 of financial companies that boycott energy companies is first
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9 provided or updated, the Treasurer Attorney General shall file the
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10 list with the presiding officer of each house of the Legislature and
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11 the Attorney General and post the list on a publicly available
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12 Internet website.
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13 5. 7. The Treasurer Attorney General may retain third-party
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14 consultants to assist in the implementation of the provisions of
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15 this act.
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16 B. Not later than the thirtieth day after the date a state
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17 governmental entity receives the list provided under paragraph 1 of
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18 subsection A of this section, the state governmental entity shall
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19 notify the Treasurer Attorney General of the listed financial
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20 companies in which the state governmental entity owns direct
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21 holdings or indirect holdings.
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22 C. 1. For each listed financial company identified under
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23 paragraph 1 of subsection A of this section, the state governmental
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24 entity shall send a written notice:
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Req. No. 1257 Page 8
1 a. informing the financial company of its status as a
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2 listed financial company,
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3 b. warning the financial company that it may become
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4 subject to divestment by state governmental entities
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5 after the expiration of the period described by
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6 paragraph 2 of this subsection, and
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7 c. offering the financial company the opportunity to
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8 clarify its activities related to companies described
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9 by paragraph 1 of subsection A of this section.
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10 2. Not later than the ninetieth day after the date the
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11 financial company receives notice under paragraph 1 of this
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12 subsection, the financial company shall cease boycotting energy
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13 companies to avoid qualifying for divestment by state governmental
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14 entities.
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15 3. If, during the time provided by paragraph 2 of this
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16 subsection, the financial company ceases boycotting energy
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17 companies, and notifies the Attorney General in writing of the
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18 cessation, the Treasurer shall Attorney General may remove the
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19 financial company from the list maintained under paragraph 1 of
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20 subsection A of this section, and this subsection will no longer
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21 apply to the financial company unless it resumes boycotting energy
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22 companies. The Attorney General shall notify state governmental
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23 entities of the financial company's removal from the list.
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Req. No. 1257 Page 9
1 4. If, after the time provided by paragraph 2 of this
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2 subsection expires, the financial company continues to boycott
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3 energy companies, the state governmental entity shall sell, redeem,
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4 divest, or withdraw all publicly traded securities of the financial
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5 company, except securities described by subsection E of this
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6 section, according to the schedule provided under subsection D of
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7 this section.
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8 D. 1. A state governmental entity required to sell, redeem,
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9 divest, or withdraw all publicly traded securities of a listed
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10 financial company shall comply with the following schedule:
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11 a. at least fifty percent (50%) of those assets shall be
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12 removed from the state governmental entity's assets
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13 under management not later than the one-hundred-
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14 eightieth day after the date the financial company
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15 receives notice pursuant to paragraph 1 of subsection
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16 C of this section unless the state governmental entity
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17 determines, based on a good-faith exercise of its
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18 fiduciary discretion and subject to subparagraph b of
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19 this subsection, that a later date is more prudent,
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20 and
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21 b. one hundred percent (100%) of those assets shall be
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22 removed from the state governmental entity's assets
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23 under management not later than the three-hundred-
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24 sixtieth day after the date the financial company
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Req. No. 1257 Page 10
1 receives notice pursuant to paragraph 1 of subsection
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2 C of this section.
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3 2. If a financial company that ceased boycotting energy
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4 companies after receiving notice pursuant to paragraph 1 of
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5 subsection C of this section resumes its boycott, the state
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6 governmental entity shall send a written notice to the financial
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7 company informing it that the state governmental entity will sell,
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8 redeem, divest, or withdraw all publicly traded securities of the
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9 financial company according to the schedule in paragraph 1 of
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10 subsection D of this section.
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11 3. Except as provided by paragraph 1 of this subsection D of
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12 this section, a state governmental entity may delay the schedule for
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13 divestment under that subsection only to the extent that the state
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14 governmental entity determines, in the state governmental entity's
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15 good-faith judgment, and consistent with the entity's fiduciary
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16 duty, that divestment from listed financial companies will likely
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17 result in a loss in value, including transaction costs, or a
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18 benchmark deviation described by paragraph 1 of subsection F of this
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19 section.
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20 4. 3. If a state governmental entity delays the schedule for
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21 divestment, the state governmental entity shall submit a report to
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22 the Treasurer, Attorney General and the presiding officer of each
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23 house of the Legislature, and the Attorney General stating the
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24 reasons and justification for the delay in divestment by the state
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Req. No. 1257 Page 11
1 governmental entity from listed financial companies. The report
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2 shall include documentation supporting its determination that the
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3 divestment would result in a loss in value, including transaction
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4 costs, or a benchmark deviation described by paragraph 1 of
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5 subsection F of this section including objective numerical
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6 estimates. The state governmental entity shall update the report
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7 every six (6) months to include an update on its delayed divestment
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8 as part of the annual report required by Section 12004 of this
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9 title.
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10 E. A state governmental entity is not required to divest from
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11 any indirect holdings in actively or passively managed investment
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12 funds or private equity funds. The state governmental entity shall
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13 submit letters to the managers of each investment fund containing
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14 listed financial companies requesting that they remove those
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15 financial companies from the fund or create a similar actively or
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16 passively managed fund with indirect holdings devoid of listed
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17 financial companies. If a manager creates a similar fund with
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18 substantially the same management fees and same level of investment
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19 risk and anticipated return, the state governmental entity may
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20 replace all applicable investments with investments in the similar
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21 fund in a time frame consistent with prudent fiduciary standards but
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22 not later than the four-hundred-fiftieth day after the date the fund
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23 is created.
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1 F. 1. A state governmental entity may cease divesting from one
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2 or more listed financial companies only if clear and convincing
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3 evidence shows that:
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4 a. the state governmental entity has suffered or will
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5 suffer a loss in the value, including transaction
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6 costs, of assets under management by the state
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7 governmental entity as a result of having to divest
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8 from listed financial companies under this subsection,
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9 or
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10 b. an individual portfolio that uses a benchmark-aware
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11 strategy would be subject to an aggregate expected
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12 deviation from its benchmark as a result of having to
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13 divest from listed financial companies under this
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14 subsection.
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15 2. A state governmental entity may cease divesting from a
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16 listed financial company as provided by this section only to the
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17 extent necessary to ensure that the state governmental entity does
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18 not suffer a loss in value or deviate from its benchmark as
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19 described by paragraph 1 of this subsection.
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20 3. Before a state governmental entity may cease divesting from
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21 a listed financial company under this section, the state
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22 governmental entity shall provide a written report to the Treasurer,
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23 Attorney General and the presiding officer of each house of the
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24 Legislature, and the Attorney General setting forth the reason and
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Req. No. 1257 Page 13
1 justification, supported by clear and convincing evidence, for
1
2 deciding to cease divestment or to remain invested in a listed
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3 financial company. The state governmental entity shall include an
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4 update to the report required by this subsection semiannually, as
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5 applicable determination made under this subsection as part of the
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6 annual report required by Section 12004 of this title.
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7 4. This section does not apply to reinvestment in a financial
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8 company that is no longer a listed financial company.
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9 G. Except as provided in subsection F of this section, a state
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10 governmental entity shall not acquire securities of a listed
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11 financial company.
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12 H. A state governmental entity shall not be subject to any
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13 requirement of the Energy Discrimination Elimination Act of 2022 if
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14 the state governmental entity determines that such requirement would
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15 be inconsistent with its fiduciary responsibility with respect to
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16 the investment of entity assets or other duties imposed by law
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17 relating to the investment of entity assets.
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18 I. The Attorney General shall promulgate rules to implement the
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19 provisions of this section, including defining the process and
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20 criteria for creating the list required in paragraph 1 of subsection
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21 A of this section.
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22 SECTION 3. AMENDATORY Section 4, Chapter 231, O.S.L.
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23 2022 (74 O.S. Supp. 2024, Section 12004), is amended to read as
23
24 follows:
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Req. No. 1257 Page 14
1 Section 12004. A. Not later than January 1 of each year, each
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2 state governmental entity shall file a publicly available report
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3 with the Treasurer, Attorney General and the presiding officer of
3
4 each house of the Legislature, and the Attorney General that:
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5 1. Identifies securities sold, redeemed, divested, or withdrawn
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6 in compliance with subsection D of Section 3 of this act;
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7 2. Identifies prohibited investments under subsection F of
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8 Section 3 of this act; and
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9 3. Summarizes any changes made under subsection E of Section 3
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10 of this act.
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11 B. The Attorney General may bring any action necessary to
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12 enforce the Energy Discrimination Elimination Act of 2022.
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13 SECTION 4. AMENDATORY Section 5, Chapter 231, O.S.L.
13
14 2022 (74 O.S. Supp. 2024, Section 12005), is amended to read as
14
15 follows:
15
16 Section 12005. A. As used in this section only of the Energy
16
17 Discrimination Elimination Act of 2022, "governmental entity" means
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18 a state agency or political subdivision of this state.
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19 B. 1. Except for paragraph 4 of this subsection, this section
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20 applies only to a contract that:
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21 a. is between a governmental entity and a company with
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22 ten or more full-time employees, and
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23 b. will pay a company One Hundred Thousand Dollars
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24 ($100,000.00) or more over the term of the contract
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Req. No. 1257 Page 15
1 that is to be paid wholly or partly from public funds
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2 of the governmental entity; provided, however, the
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3 provisions of this paragraph shall apply separately to
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4 all companies in a multiple party contract.
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5 2. Except as provided by paragraph 4 of this subsection, a
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6 governmental entity shall not enter into a contract with a company
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7 for goods or services unless the contract contains a written
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8 verification from the company that it:
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9 a. does not boycott energy companies, and
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10 b. will not boycott energy companies during the term of
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11 the contract.
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12 3. Except as provided by paragraph 4 of this subsection, a
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13 governmental entity shall not enter into a contract for goods or
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14 services with a listed financial company under Section 3 12003 of
14
15 this act title.
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16 4. Paragraphs 2 and 3 of this subsection shall not apply to:
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17 a. a governmental entity that determines the requirements
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18 of paragraphs 2 or 3 of this subsection are
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19 inconsistent with the governmental entity's
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20 constitutional or statutory duties related to the
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21 issuance, incurrence, or management of debt
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22 obligations or the deposit, custody, management,
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23 borrowing, or investment of funds or its fiduciary
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24 responsibility, and
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Req. No. 1257 Page 16
1 b. a contract for which a governmental body entity
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2 determines the supplies or services to be provided are
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3 not otherwise reasonably available from a company that
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4 does not boycott energy companies or from a financial
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5 company that is not a listed financial company under
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6 Section 3 of this act, as applicable.
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7 C. 1. The provisions of this act shall not apply to any notes
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8 or bonds issued by this state, any political subdivision, or any
8
9 governmental entity, used for public financing.
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10 2. A financial company's involvement in bond or public
10
11 financing projects shall be determined by the political subdivision
11
12 or governmental entity's established processes for such financings.
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13 SECTION 5. REPEALER Section 6, Chapter 231, O.S.L. 2022
13
14 (74 O.S. Supp. 2024, Section 12006), is hereby repealed.
14
15 SECTION 6. This act shall become effective July 1, 2025.
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16 SECTION 7. It being immediately necessary for the preservation
16
17 of the public peace, health or safety, an emergency is hereby
17
18 declared to exist, by reason whereof this act shall take effect and
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19 be in full force from and after its passage and approval.
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Req. No. 1257 Page 17Every fact on this page links to its source, starting with the official bill record.