SB151 Alabama 2024 Session

Updated Feb 23, 2026

High Interest

Summary

Primary Sponsor: Arthur OrrSenator
Republican
Session: Regular Session 2024
Title: State Investments and Public Contracts; to prohibit State Treasurer and Board of Control of RSA and TRSA from using ESG factors in investment decisions; may consider pecuniary factors; to prohibit state entities from considering ESG factors when awarding public contracts
Summary: SB151 would bar ESG factors from state investment decisions and public contract awards, requiring pecuniary considerations instead and creating formal investment policies for state funds and retirement systems.
What This Bill Does
It would establish formal investment policies for the State Treasurer and the Boards of Control of the Teachers' Retirement System and the Employees' Retirement System, prohibiting ESG criteria and prioritizing pecuniary factors to maximize financial returns. It would prohibit ESG considerations when awarding state-funded contracts, requiring pecuniary factors only. It would create an investment committee and related governance rules for these retirement funds, plus reporting requirements and rules governing investment consultants and bank arrangements. It would take effect on October 1, 2024.

Who It Affects
State Treasurer and the investment boards for the Teachers' Retirement System and Employees' Retirement System would be required to adopt and follow policies that prioritize pecuniary factors and restrict ESG considerations.
State agencies that award contracts funded by state funds would be required to use pecuniary factors only and not consider ESG criteria when procuring goods, services, or professional services.

Key Provisions
Establishes a state investment policy for the State Treasurer and retirement system boards prohibiting investments and transactions with financial institutions that prioritize ESG criteria over the fiduciary duty to maximize financial benefit.
Prohibits ESG criteria in awarding state-funded contracts for goods, services, and professional services; requires consideration of pecuniary factors only.
Defines Environmental, Governance, Pecuniary Factor, and Social terms to guide interpretation and application.
The State Treasurer must act in the taxpayers' interest; may consider pecuniary factors as primary and a secondary factor related to the state's well-being, but cannot subordinate taxpayers' interests or sacrifice returns for non-pecuniary goals.
For retirement systems, boards must prioritize members' and beneficiaries' interests; may consider state well-being as a secondary factor but may not sacrifice investment returns for non-pecuniary goals.
Creates an Investment Committee (three board members plus the Director of Finance) to review and approve investment recommendations, requiring two affirmative votes and written authorization attached to invoices.
Allows appointment of a bank consultant (Alabama-based, with at least $300 million in capital, surplus, and profits) to assist, with restrictions on selling securities to the retirement system.
Requires semiannual reporting of investment purchases and sales by the Secretary-Treasurer; sets regular interest credits to funds (min 3% and max 4.75%), with distributions to specific retirement funds as described.
Effective date: October 1, 2024.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Government Administration; Retirement; State & State Officers; State Government