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An Act
ENROLLED HOUSE
BILL NO. 4428 By: Hilbert of the House
and
Daniels and Jett of the
Senate
An Act relating to public finance; defining terms;
directing Board of Trustees to vote with
consideration of certain factors; requiring that
exercise of shareholder votes or introduction of a
proxy proposal be based on pecuniary factors;
providing exception; requiring the Board to retain
the authority to exercise shareholder proxy rights
for certain shares; providing exception; directing
the Board to produce report; directing Board to
publish report on website by certain date; providing
for codification; and providing an effective date.
SUBJECT: Public finance
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 9101 of Title 62, unless there
is created a duplication in numbering, reads as follows:
As used in this act:
1. "Company" means a publicly traded, for-profit corporation,
limited liability company, partnership, or other business entity
that conducts its operations and is headquartered within the United
States;
2. "Company proposal" means any proposal made by a company to
its shareholders that is included in the company's proxy statement,
including, but not limited to, a proposal relating to director
nominations or elections, executive compensation, corporate
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ENR. H. B. NO. 4428 Page 2
transactions, corporate structure, auditor selection, or company
policy on any subject;
3. "Default recommendation or policy" means a system, set of
rules, principles, or guidelines designed to assist with voting
decisions on any company proposals or proxy proposals;
4. "Pecuniary factor":
a. means a factor that a prudent person in a like
capacity would reasonably believe has a material
effect or impact on the financial risk or return on an
investment, based on an appropriate investment horizon
consistent with a retirement system's investment
objectives and funding policy, and
b. does not include "nonpecuniary factors", which is any
factor or consideration that is collateral to or not
reasonably likely to affect or impact the financial
risk and return of the investment and include, but are
not limited to, the promotion, furtherance, or
achievement of environmental, social, or political
goals, objectives, or outcomes;
5. "Pension benefit plan" or "plan" shall mean any plan, fund,
or program which was heretofore or is hereafter established,
maintained, or offered by the State of Oklahoma or any subdivision,
county, municipality, agency, or instrumentality thereof, or any
school, college, university, administration, authority, or other
enterprise operated by the State of Oklahoma, to the extent that by
its terms or as a result of surrounding circumstances:
a. provides retirement income or other retirement
benefits to employees or former employees, or
b. results in a deferral of income by such employees for
a period extending to the termination of covered
employment or beyond, and
c. the term does not include a defined contribution plan
under the Retirement Freedom Act, established pursuant
to Section 935.1 et seq. of Title 74 of the Oklahoma
Statutes, except that investment options selected as
default investment options for participating employees
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shall be selected in adherence to the requirements of
this act;
6. "Proxy advisor" means a person who, for compensation,
provides a proxy advisory service to shareholders of a company or to
other persons with authority to vote on behalf of shareholders of a
company;
7. "Proxy advisory service" means any of the following services
that are provided in connection with or in relation to a company:
a. advice or a recommendation on how to vote on a proxy
proposal or company proposal,
b. proxy statement research and analysis regarding a
proxy proposal or company proposal,
c. a rating or research regarding corporate governance at
one or more companies, or
d. development of proxy voting recommendations or
policies, including establishing default
recommendations or policies; and
8. "Proxy proposal" means any proposal made by a shareholder of
a company that is included in the company's proxy statement,
including, but not limited to, a proposal relating to any of the
subjects that could be covered by a company proposal.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 9102 of Title 62, unless there
is created a duplication in numbering, reads as follows:
A. The respective Board of Trustees of any pension benefit plan
shall vote on company proposals and proxy proposals in a manner that
is:
1. In keeping with its fiduciary duties;
2. Solely based on pecuniary factors; and
3. For the sole purpose of providing benefits to participants
and their beneficiaries that maximize risk-adjusted returns over an
appropriate investment horizon.
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B. Any engagement between the Board of Trustees and a company
regarding the exercise of shareholder votes or the introduction of a
proxy proposal must be based solely on pecuniary factors and for the
sole purpose of maximizing shareholder value, except that the Board
of Trustees may engage with a company to express opposition to a
company proposal or proxy proposal that does not have a pecuniary
impact.
C. To the extent that it is economically practicable, the Board
of Trustees must retain the authority to exercise shareholder proxy
rights for shares that are owned directly or indirectly on behalf of
a system.
The Board of Trustees may retain a proxy advisor to assist the
Board of Trustees in exercising shareholder proxy rights, but only
if the proxy advisor has a practice of following, and commits in
writing to follow, proxy guidelines that are consistent with the
requirements of subsection A of this section for each of its proxy
advisory services.
D. The Board of Trustees shall produce an annual report
tabulating and describing all of the shareholder votes cast by the
Board or the Board's fiduciaries. For each shareholder vote cast
during a calendar year, the report required by this subsection shall
contain a vote caption, the Board's or the fiduciary's vote, the
recommendation of company management, and, if applicable, the proxy
advisor or other service provider's recommendation. The Board shall
publish the report required by this subsection on the Board's
website no later than March 1 of the calendar year following the
calendar year addressed in the report.
SECTION 3. This act shall become effective November 1, 2026.
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Passed the House of Representatives the 6th day of May, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the 28th day of April, 2026.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________