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1 STATE OF OKLAHOMA
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2 1st Session of the 60th Legislature (2025)
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3 SENATE BILL 919 By: Green
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6 AS INTRODUCED
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7 An Act relating to the Commissioners of the Land
7 Office; defining term; establishing restrictions on
8 certain agricultural leases; amending 18 O.S. 2021,
8 Section 955, which relates to limitations on
9 ownership of farming and ranching business
9 corporations; providing exception for qualification
10 of certain limited liability company; modifying fine
10 amount; updating statutory language; updating
11 statutory reference; amending 64 O.S. 2021, Section
11 1013, as amended by Section 40, Chapter 228, O.S.L.
12 2022 (64 O.S. Supp. 2024, Section 1013), which
12 relates to investment of funds; removing certain
13 investment exemption; providing for codification; and
13 providing an effective date.
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15
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16 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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17 SECTION 1. NEW LAW A new section of law to be codified
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18 in the Oklahoma Statutes as Section 1023a of Title 64, unless there
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19 is created a duplication in numbering, reads as follows:
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20 A. For the purposes of leases entered into by the Commissioners
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21 of the Land Office, "commercial lease" shall mean a lease for those
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22 trust lands which may have a greater value or use which enables it
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23 to earn more income per year than if used strictly for agricultural
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24 purposes. Any lease entered into for the purpose of renewable
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Req. No. 183 Page 1
1 energy generation on and after the effective date of this act shall
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2 be considered a commercial lease.
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3 B. No agricultural lease shall be executed in favor of any
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4 corporation or its agent, or a third party for the use and benefit
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5 of a corporation, except as provided in Section 951 et seq. of Title
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6 18 of the Oklahoma Statutes.
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7 SECTION 2. AMENDATORY 18 O.S. 2021, Section 955, is
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8 amended to read as follows:
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9 Section 955. A. No person, corporation, association, or any
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10 other entity shall engage in farming or ranching, or own or lease
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11 any interest in land to be used in the business of farming or
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12 ranching, except the following:
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13 1. Natural persons and the estates of such persons;
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14 2. Trustees of trusts; provided that:
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15 a. each beneficiary shall be a person or entity
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16 enumerated in paragraphs 1 through 5 of this
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17 subsection, and
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18 b. there shall not be more than ten beneficiaries unless
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19 the beneficiaries in excess of ten are related as
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20 lineal descendants or are or have been related by
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21 marriage or adoption to lineal descendants, and
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22 c. at least sixty-five percent (65%) of the trust's
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23 annual gross receipts shall be derived from farming or
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24 ranching, or from allowing others to extract minerals
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Req. No. 183 Page 2
1 underlying lands held by the trust. If the trust
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2 cannot comply with the annual gross receipts test, the
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3 trust may furnish records of its gross receipts for
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4 each of the previous five (5) years, or for each year
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5 that it has been in existence if less than five (5)
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6 years, and the average of such annual gross receipts
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7 may be used for purposes of complying with this
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8 section;
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9 3. Corporations, as provided for in Sections 951 through 954 of
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10 this title, or as otherwise permitted by law;
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11 4. Partnerships and limited partnerships; provided that:
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12 a. each partner shall be a person or entity enumerated in
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13 paragraphs 1 through 5 of this subsection, and
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14 b. there shall not be more than ten partners unless said
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15 the partners in excess of ten are related as lineal
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16 descendants or are or have been related by marriage or
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17 adoption to lineal descendants, and
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18 c. at least sixty-five percent (65%) of the partnership's
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19 annual gross receipts shall be derived from farming or
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20 ranching, or from allowing others to extract minerals
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21 underlying lands held by the partnership. If the
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22 partnership cannot comply with the annual gross
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23 receipts test, the partnership may furnish records of
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24 its gross receipts for each of the previous five (5)
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Req. No. 183 Page 3
1 years, or for each year that it has been in existence
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2 if less than five (5) years, and the average of such
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3 annual gross receipts may be used for purposes of
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4 complying with this section; and
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5 5. Limited liability companies formed pursuant to the Oklahoma
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6 Limited Liability Company Act; provided that:
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7 a. each member shall be a person or entity enumerated in
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8 paragraphs 1 through 5 of this subsection, and
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9 b. there shall not be more than thirty members unless
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10 said the members in excess of thirty are related as
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11 lineal descendants or are or have been related by
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12 marriage or adoption to lineal descendants, and
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13 c. at least sixty-five percent (65%) of the limited
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14 liability company's annual gross receipts shall be
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15 derived from farming or ranching, or from allowing
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16 others to extract minerals underlying lands held by
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17 the limited liability company. If the limited
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18 liability company cannot comply with the annual gross
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19 receipts test, the limited liability company may
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20 furnish records of its gross receipts for each of the
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21 previous five (5) years, or for each year that it has
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22 been in existence if less than five (5) years, and the
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23 average of such annual gross receipts may be used for
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24 purposes of complying with this section, and
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1 d. the limited liability company is not engaged in
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2 renewable energy generation.
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3 B. Any farming or ranching corporation, trust, partnership,
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4 limited partnership, limited liability company or other entity which
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5 violates any provisions of this section shall be fined an amount not
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6 to exceed Five Hundred Dollars ($500.00) per day until the violation
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7 ceases. Any other person or entity who knowingly violates this
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8 section shall be deemed guilty of a misdemeanor.
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9 C. The provisions of this act Section 951 et seq. of this title
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10 shall not apply to interests in land acquired prior to June 1, 1978.
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11 SECTION 3. AMENDATORY 64 O.S. 2021, Section 1013, as
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12 amended by Section 40, Chapter 228, O.S.L. 2022 (64 O.S. Supp. 2024,
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13 Section 1013), is amended to read as follows:
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14 Section 1013. A. The Commissioners of the Land Office shall be
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15 responsible for the investment of the permanent school funds, other
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16 educational funds and public building funds solely in the best
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17 interests of the current and future beneficiaries. The
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18 Commissioners of the Land Office shall make investments:
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19 1. For the exclusive purpose of:
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20 a. providing maximum benefits to current and future
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21 beneficiaries, and
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22 b. defraying reasonable expenses of administering the
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23 trust funds;
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Req. No. 183 Page 5
1 2. With the care, skill, prudence and diligence under the
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2 circumstances then prevailing that a prudent person acting in a like
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3 enterprise of a like character and with like aims would use; and
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4 3. By diversifying the investments of the trust funds so as to
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5 minimize the risk of large losses.
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6 B. The permanent school fund and other educational funds may
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7 only be invested in bonds issued in the United States, United States
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8 dollar denominated or other investments settled in United States
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9 dollars or traded on the United States exchange markets and real
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10 property to be owned or acquired by the Commissioners of the Land
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11 Office. The Commissioners of the Land Office shall not invest more
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12 than sixty percent (60%) of the trust fund investments in equity
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13 securities. The Commissioners of the Land Office are further
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14 authorized to acquire, purchase, exchange and grant any real
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15 property under its jurisdiction as is necessary to carry out the
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16 investment in the real property. The Commissioners of the Land
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17 Office shall not invest more than five percent (5%) of the total
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18 value of the assets of the permanent school funds in connection with
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19 investments in real property. The calculation of investments in
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20 real property within the five percent (5%) cap shall not include the
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21 value of real property under long-term lease to the State of
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22 Oklahoma, agencies of the state or subdivisions thereof. In no case
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23 shall the Commissioners of the Land Office bid against private-
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1 sector bidders above the appraised value of any property to be
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2 acquired.
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3 C. The Commissioners shall establish an investment committee.
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4 The investment committee shall be composed of not more than three
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5 members of the Commissioners of the Land Office or their designees.
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6 The committee shall make recommendations to the Commissioners of the
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7 Land Office on all matters related to the choice of managers of the
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8 assets of the funds, on the establishment of investment and fund
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9 management guidelines, and in planning future investment policy.
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10 The committee shall have no authority to act on behalf of the
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11 Commissioners of the Land Office in any circumstances whatsoever.
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12 No recommendations of the committee shall have effect as an action
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13 of the Commissioners of the Land Office or take effect without the
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14 approval of the Commissioners as provided by law. The Commissioners
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15 shall promulgate and adopt on an annual basis an investment plan.
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16 The investment plan shall state the criteria for selecting
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17 investment managers, the allocation of assets among investment
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18 managers, and established standards of investment and fund
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19 management.
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20 D. The Commissioners shall retain qualified investment managers
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21 to provide for investment of the fund monies and for the management
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22 of investment real property pursuant to the investment plan.
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23 Investment managers shall be chosen by a solicitation of proposals
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24 on a competitive bid basis pursuant to standards set by the
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1 Commissioners. Subject to the investment plan, each investment
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2 manager shall have full discretion in the management of the funds or
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3 investment real property allocated to the investment managers. The
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4 funds allocated to investment managers shall be actively managed by
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5 them, which may include selling investments and realizing losses if
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6 the action is considered advantageous to longer term return
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7 maximization. Because of the total return objective, no distinction
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8 shall be made for management and performance evaluation purposes
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9 between realized and unrealized capital gains and losses.
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10 E. The Commissioners shall take any measures they deem
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11 appropriate to safeguard custody of securities and other assets of
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12 the trusts.
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13 F. By September 1 of each year, the Commissioners shall develop
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14 a written investment plan for the trust funds.
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15 G. The Commissioners shall compile a quarterly financial report
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16 showing the performance of all the combined funds under their
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17 control on a fiscal year basis. The report shall contain a list of
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18 all investments made by the Commissioners and a list of any
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19 commissions, fees or payments made for services regarding the
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20 investments for that reporting period. The report shall be based on
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21 market values and shall be compiled pursuant to uniform reporting
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22 standards prescribed by the Oklahoma State Pension Commission for
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23 all state retirement systems. The report shall be distributed to
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Req. No. 183 Page 8
1 the Oklahoma State Pension Commission, the Cash Management and
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2 Investment Oversight Commission, and the Legislative Service Bureau.
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3 H. Before January 1 of each year, the Commissioners shall
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4 publish an annual report of all Trust operations, presented in a
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5 simple and easily understood manner to the extent possible. The
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6 report shall be submitted to the Governor, the Speaker of the House
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7 of Representatives, the President Pro Tempore of the Senate, the
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8 State Department of Education and each higher education beneficiary.
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9 The annual report shall cover the operation of the Trusts during the
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10 past fiscal year including income, disbursements and the financial
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11 condition of the Trusts at the end of each fiscal year on a cash
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12 basis. The annual report shall also contain a summary of the assets
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13 of each trust and current market value as of the report date.
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14 I. The Cash Management and Investment Oversight Commission
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15 shall review reports prepared by the Commissioners of the Land
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16 Office pursuant to this subsection and shall make recommendations
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17 regarding the investment strategies and practices, the development
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18 of internal auditing procedures and practices and any other matters
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19 as determined necessary and applicable.
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20 J. The Commissioners of the Land Office shall select one or
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21 more custodial banks to settle transactions involving the investment
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22 of the funds under the control of the Commissioners of the Land
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23 Office. The Commissioners of the Land Office shall review the
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24 performance of each custodial bank at least once every year. The
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Req. No. 183 Page 9
1 Commissioners of the Land Office shall require a written competitive
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2 bid every ten (10) years. The custodial bank shall have a minimum
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3 of Five Hundred Million Dollars ($500,000,000.00) in assets to be
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4 eligible for selection. Any out-of-state custodial bank shall have
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5 a service agent in the State of Oklahoma so that service of summons
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6 or legal notice may be had on the designated agent, and the bank
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7 shall submit to the jurisdiction of Oklahoma state courts for
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8 resolution of any and all disputes. In order to be eligible for
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9 selection, the custodial bank shall allow electronic access to all
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10 transaction and portfolio reports maintained by the custodial bank
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11 involving the investment of state funds under control of the
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12 Commissioners of the Land Office and to the Cash Management and
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13 Investment Oversight Commission. The requirement for electronic
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14 access shall be incorporated into any contract between the
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15 Commissioners of the Land Office and the custodial bank. Neither
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16 the Commissioners of the Land Office nor the custodial bank shall
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17 permit any of the funds under the control of the Commissioners of
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18 the Land Office or any of the documents, instruments, securities or
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19 other evidence of a right to be paid money to be located in any
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20 place other than within a jurisdiction or territory under the
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21 control or regulatory power of the United States government.
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22 SECTION 4. This act shall become effective November 1, 2025.
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24 60-1-183 RD 1/19/2025 5:45:59 AM
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Req. No. 183 Page 10Every fact on this page links to its source, starting with the official bill record.