Some Oklahoma lawmakers are looking to make changes to the state’s ban on doing business with companies accused of boycotting the fossil fuel industry.
Among the dozens of bills pre-filed for the legislative session that begins Feb. 5, at least two seek to make changes to the Oklahoma Energy Discrimination Elimination Act. The 2022 law requires the State Treasurer’s office to make a list of companies it believes are boycotting the fossil fuel industry. Under the law, state pension systems are required to divest any retiree funds managed by blacklisted firms. State, county and city governments are also not allowed to contract with those companies.
The law leaves it up to the treasurer to decide what financial firms end up on the state’s blacklist, though heavy emphasis is placed on companies with environmental, social and governance investment vehicles. Oklahoma’s law is mostly a word-for-word copy of a Texas law passed a year earlier.
The Frontier reported in May 2023 that the Oklahoma State Treasurer’s office applied criteria for blacklisting companies inconsistently, leaving some firms claiming they have been arbitrarily and wrongly banned from doing business with the state.
Oklahoma state pension systems said they were not given guidance on implementing the law, and retirees could lose millions if the state were to fully divest from blacklisted companies. At least one municipality said it would have to pay higher interest rates on new bonds.
The list was later pared down to six companies.
The law allows pension funds to claim an exemption if divesting from blacklisted companies would cause them to act against the best financial interests of state retirees. Russ conceded that some of the state’s pension systems may have to take an exemption, but he later criticized the Oklahoma Public Employees Retirement System for doing so. Russ’s office later also took an exemption from the law to continue to do business with Bank of America and JPMorgan Chase.
In advance of the upcoming legislative session, Sen. Dave Rader, R-Tulsa, has filed Senate Bill 1536, which would require the State Treasurer’s office to seek an opinion from the state Attorney General if it disagrees with a state agency’s decision to continue to do business with a blacklisted company.
Rader said the goal is to have a third party arbitrate disagreements between the treasurer’s office and state agencies on how the law is applied. The bill comes out of an interim study at the Oklahoma Capitol in October on the Energy Discrimination Elimination Act.
“There seemed to be confusion as far as the meaning or implementation of the bill,” Rader said. “One of the things that came out of the study is there was not a defined person or process to determine if the law was being followed. You might have the interpretation of the agency and the interpretation of the treasurer and they might not be in sync.
“To me, this was one of the more glaring needs that came out of the study,” he said.
Senate Bill 1510 by Sen. Chuck Hall, R-Perry, would make cities and counties exempt from the law. Hall, who is also CEO and chairman of the Perry-based lender Exchange Bank & Trust Co., did not respond to a phone message at his office.
Jordan Harvey, chief of staff for Russ, said the Treasurer’s Office is watching the bills, but declined to comment on whether the office supports or opposes the measures.
Two other bills introduced last year dealing with the Energy Discrimination Elimination Act didn’t get passed but are still alive, including Senate Bill 469 and Senate Bill 470, both by Sen. Lonnie Paxton, R-Tuttle. Senate Bill 469 would extend the prohibitions in the Energy Discrimination Elimination Act to state universities and colleges, while Senate Bill 470 would require financial firms to act in the best financial interests of retirees and beneficiaries when they participate in shareholder votes on behalf of public retirement funds.
The deadline to file bills in the Legislature is Jan. 18.