A letter from 21 state financial officials is urging the Securities and Exchange Commission to postpone a rule creating a new type of company designed for climate activists.
The state financial officers asked SEC Chairman Gary Gensler to extend the comment period from what they considered an unusually short 21 days to 60 days.
If enacted, the new SEC rule would establish a new type of corporation called a Natural Asset Company, a company that by design can’t make money.
But, the financial officials contend, it enables locking up of America’s natural resources, which could harm rural communities that rely on mining, farms and ranches by allowing the activists to buy land, both public and private, on the condition that it not be put to productive use.
“We are asking the SEC to pump the brakes on this rule. Interested parties like state treasurers need time to consider the effects of essentially redefining business and value as we know it, and what such a mechanism could do to communities within our states,” Idaho State Treasurer Julie Ellsworth told The Daily Signal in a statement.
“That this proposed rule was rushed through quietly does not inspire confidence that it was proposed in good faith,” Ellsworth added. “The impacts on states could be enormous—even catastrophic.”
Utah State Treasurer Marlo Oaks first raised concerns about the matter in a Wall Street Journal op-ed in November.
“The SEC’s proposed rule creating natural asset companies will not only upend the accepted standards of value by which businesses are judged, it would pave the way for ESG fanatics to remake the American landscape,” Kreifels said in a public statement.
Natural Asset Companies “would lock away vital resources that have underwritten America’s prosperity, sacrificing them on the altar of climate alarmism,” Kreifels added. “That the SEC would weigh such a decision after such a ridiculously short comment period could only suggest they are trying to sneak this measure through without necessary scrutiny. The SEC must reopen the comment period to allow concerned parties to weigh in.”
An SEC spokesperson did not immediately respond to an inquiry for this story.
The letter to Gensler only requests that the SEC reopen the public comment period for 60 days.
“This public comment period is unusually brief and is insufficient, given the significance of the rule being considered,” the letter from the 21 officials says. “We are aware of many interested parties who would have provided public comment if given sufficient time to prepare and submit their comments.”
Signatories on the letter were Oaks of Utah; Adam Crum, Alaska’s commissioner of revenue; Kimberly Yee, Arizona treasurer; Jimmy Patronis, Florida CFO; Daniel Elliott, Indiana treasurer; Steven Johnson, Kansas treasurer; John Schroder, Louisiana treasurer; Mike Foley, Nebraska auditor; Andrew Matthews, Nevada controller; Dale Folwell, North Carolina treasurer; Thomas Beadle, North Dakota treasurer; Robert Sprague, Ohio treasurer; Cindy Byrd, Oklahoma auditor and inspector; Todd Russ, Oklahoma treasurer; Stacy Garrity, Pennsylvania treasurer; Curtis Loftis, South Carolina treasurer; Josh Haeder, South Dakota treasurer; Glenn Hegar, Texas comptroller; John Leiber, Wisconsin treasurer; Riley Moore, West Virginia treasurer; and Curt Meier, Wyoming treasurer.
The letter continues:
We have many concerns regarding the substance of the rule and the implications it would have on the markets and the lands of states we represent. We would appreciate the opportunity to address them through a reasonable public comment process.
The SEC’s stated role is to protect investors and promote capital formation. We believe this rule, if adopted, would act in direct opposition to the stated goals of the SEC.
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