Text of OK HB 1947 (2023)

Req. No. 6235 Page 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 STATE OF OKLAHOMA 1st Session of the 59th Legislature (2023) HOUSE BILL 1947 By: McCall AS INTRODUCED An Act relating to state government; creating the Eliminate Economic Boycotts Act; declaring legislative intent; defining terms; requiring written verification in certain contracts; prohibiting interference in contracts; providing for enforcement; providing for noncodification; providing for codification; and providing an effective date. BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: SECTION 1. NEW LAW A new section of law not to be codified in the Oklahoma Statutes reads as follows: A. This act shall be known and may be cited as the "Eliminate Economic Boycotts Act". B. The State of Oklahoma finds that: 1. Numerous essential American industries, including fossil fuel production, agriculture, timber production, and firearms, are being targeted for boycotting, divesting, and sanctioning by large corporations and public and private institutional investors; Req. No. 6235 Page 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2. The goal of these colluding parties is to starve targeted legal industries of capital, restrict their productivity, and redirect that capital to favored industries; 3. These parties are working in concert with many state and federal lawmakers and regulators, as evidenced most recently by new climate disclosure rules from the United States Securities and Exchange Commission; 4. Restricting the supply of energy and other essential commodities, without effective substitutes for those commodities, only serves to raise prices on consumers, profoundly impacting the poorest among us; 5. Denying financing to American companies, who are among the most socially and environmentally responsible companies in the world, only serves to support hostile nations and less responsible producers; 6. Banks and insurance companies are increasingly denying financing to creditworthy companies to market their environmental credentials to the detriment of consumers, shareholders and society; 7. Institutional investors are divesting from entire industries and pressuring corporations to commit to environmental goals, such as reducing greenhouse gas emissions to zero (0) by 2050, to burnish their environmental credentials or promote their own environmental, social, and governance funds at the expense of investor returns; Req. No. 6235 Page 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 8. Large investment firms, through their proxy votes on shareholder resolutions and board elections, are colluding to force companies to direct money, time, and attention away from their core responsibility of increasing shareholder returns, driving capital allocation decisions and political change outside the democratic process; 9. Corporations are boycotting and sanctioning essential legal industries, such as fossil fuel and agriculture producers, by denying them capital, refusing to provide them with products or services, or imposing undue burdens on them; 10. The collusion of corporations, and institutions to boycott, divest from, or sanction any industry may violate existing antitrust and fiduciary duty laws and harms consumers, shareholders, and this state; and 11. States, when financially prudent, should avoid doing business with companies that engage in such potentially illegal conduct, and threaten harm to this state, its businesses, and citizens. SECTION 2. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 583 of Title 74, unless there is created a duplication in numbering, reads as follows: A. As used in this section: 1. "Company" means a for-profit organization, association, corporation, partnership, joint venture, limited partnership, Req. No. 6235 Page 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 limited liability partnership, or limited liability company, including a wholly owned subsidiary, majority-owned subsidiary, parent company, or affiliate of those entities or business associations. For the purposes of this section, "company" does not include sole proprietorships. 2. "Governmental entity" means a state agency or political subdivision of this state. 3. "Ordinary business purpose" does not include any purpose to further social, political, or ideological interests. A company may reasonably be determined to have taken an action, or considered a factor, with a purpose to further social, political, or ideological interests based upon evidence indicating such a purpose, including, but not limited to: a. branding, advertising, statements, explanations, reports, letters to clients, communications with portfolio companies, statements of principles, or commitments, or b. participation in, affiliation with, or status as a signatory to, any coalition, initiative, joint statement of principles, or agreement. 4. "Economic boycott" means, without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any commercial action that is intended to penalize, inflict economic harm on, limit commercial relations with, Req. No. 6235 Page 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 or change or limit the activities of a company because the company, without violating controlling federal or state law: a. Engages in the exploration, production, utilization, transportation, sale, or manufacturing of, fossil fuel-based energy, timber, mining, or agriculture; b. Engages in, facilitates, or supports the manufacture, import, distribution, marketing or advertising, sale, or lawful use of firearms, ammunition or components, parts and accessories of firearms or ammunition; c. Does not meet, is not expected to meet, or does not commit to meet environmental standards or disclosure criteria, in particular to eliminate, reduce, offset, or disclose greenhouse gas emissions; d. Does not meet, is not expected to meet, or does not commit to meet corporate board, or employment, composition, compensation, or disclosure criteria that incorporates characteristics protected in this state; e. Does not facilitate, is not expected to facilitate, or does not commit to facilitate access to abortion, sex or gender change, or transgender surgery; or f. Does business with a company described by subparagraphs a through e of this paragraph. B. 1. This section applies only to a contract that: Req. No. 6235 Page 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 a. is between a governmental entity and a company with 10 or more full-time employees; and b. will pay a company One Hundred Thousand Dollars ($100,000.00) or more over the term of the contract that is to be paid wholly or partly from public funds of the governmental entity; provided, however, the provisions of this paragraph shall apply separately to all companies in a multiple-party contract. 2. Except as provided by paragraph 3 of this subsection, a governmental entity may not enter into a contract with a company for goods or services unless the contract contains a written verification from the company that it: a. does not engage in economic boycotts; and b. will not engage in economic boycotts during the term of the contract. 3. Paragraph 2 of this subsection shall not apply to a governmental entity that determines the requirements of paragraph 2 of this subsection: a. are inconsistent with the governmental entity's constitutional or statutory duties related to the issuance, incurrence, or management of debt obligations or the deposit, custody, management, borrowing, or investment of funds; or Req. No. 6235 Page 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 b. prevent the governmental entity from obtaining the supplies or services to be provided in an economically practicable manner. C. 1. No party, including any entity organized under federal or state law, may take action to penalize or threaten to penalize any financial institution for compliance with this section. 2. Any party taking such action shall have caused harm to this state, including by interfering with the state's sovereign interests in administering its programs and with the state's commercial relationships with its financial institutions. D. 1. This article, or any contract subject to this article, may be enforced by the Attorney General. 2. If the Attorney General has reasonable cause to believe that a person has engaged in, is engaging in, or is about to engage in, a violation of this article, he or she may: a. require such person to file on such forms as he or she prescribes a statement or report in writing, under oath, as to all the facts and circumstances concerning the violation, and such other data and information as he or she may deem necessary; b. examine under oath any person in connection with the violation; c. examine any record, book, document, account or paper as he or she may deem necessary; or Req. No. 6235 Page 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 d. pursuant to an order of the court, impound any record, book, document, account, paper, or sample or material relating to such practice and retain the same in his or her possession until the completion of all proceedings undertaken under this article or in the courts. 3. In addition to any other remedies available at law or equity, a company that enters into a contract with a government entity containing any verifications required by Section 2 and engages in any economic boycott during the term of the contract shall be obligated to pay damages to the state in an amount equal to three times all monies paid to the company under the contract. SECTION 3. This act shall become effective November 1, 2023. 59-1-6235 LRB 01/11/23