Full Text of SB2152 103rd General Assembly
SB2152enr 103RD GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning public employee benefits.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Pension Code is amended by | 5 | | changing Section 22A-106 and by adding Sections 15-177.5, | 6 | | 15-177.6, 16-188, 16-189, 22A-113.4, and 22A-113.5 as follows: | 7 | | (40 ILCS 5/15-177.5 new) | 8 | | Sec. 15-177.5. Proxy voting. | 9 | | (a) In this Section, "fiduciary" has the meaning given to | 10 | | that term in Section 1-101.2. | 11 | | (b) Notwithstanding the Board's investment authority, and | 12 | | upon the affirmative vote of at least three-fifths of the | 13 | | members of the Board, the State Treasurer shall be authorized | 14 | | to manage the domestic and international proxy voting activity | 15 | | for shares held directly by the System and execute required | 16 | | ballots on behalf of the System. The Board's consent granted | 17 | | under this Section may be revoked at any time upon the | 18 | | affirmative vote of a majority of the members of the Board. | 19 | | (c) When the State Treasurer is managing any proxy voting | 20 | | activity in accordance with subsection (b), the following | 21 | | shall apply: (1) the State Treasurer shall provide the Board | 22 | | with (i) comprehensive proxy voting reports on a quarterly | 23 | | basis and as requested by the Board and (ii) access to |
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| 1 | | communications with its third-party proxy voting service, if | 2 | | any, used in preparing the comprehensive proxy voting reports | 3 | | requested by the Board; and (2) the Board may provide the State | 4 | | Treasurer with guidance for proxy voting, which, if provided, | 5 | | the State Treasurer shall consider when voting. | 6 | | (d) The State Treasurer shall act as a fiduciary to the | 7 | | System with regard to all aspects of the State Treasurer's | 8 | | management of the proxy voting activity as provided under | 9 | | subsection (b). | 10 | | (e) With respect to this Section, and with respect to the | 11 | | State Treasurer's management of the proxy voting activity as | 12 | | provided for under subsection (b), the Board is exempt from | 13 | | any conflicting statutory or common law obligations, including | 14 | | any fiduciary or co-fiduciary duties under this Article and | 15 | | Article 1. | 16 | | (f) With respect to this Section and with respect to the | 17 | | State Treasurer's management of the proxy voting activity as | 18 | | provided for under subsection (b), the Board, its staff, and | 19 | | the trustees of the Board shall not be liable for any damage or | 20 | | suits where damages are sought for negligent or wrongful acts | 21 | | alleged to have been committed in connection with the | 22 | | management of proxy voting activity as provided for under this | 23 | | Section. | 24 | | (g) In order to facilitate the State Treasurer's proxy | 25 | | voting activities under this Section and before the State | 26 | | Treasurer begins proxy voting activities, the State Treasurer |
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| 1 | | and the Board shall enter into an intergovernmental agreement | 2 | | concerning costs, proxy voting guidance, reports and other | 3 | | documents, and other issues. | 4 | | (h) This Section is repealed on January 1, 2027. | 5 | | (40 ILCS 5/15-177.6 new) | 6 | | Sec. 15-177.6. Fiduciary report. On or before September 1, | 7 | | 2023, and annually thereafter, the Board shall publish its | 8 | | guidelines for voting proxy ballots and a detailed report on | 9 | | its website describing how the Board is considering | 10 | | sustainability factors as defined in the Illinois Sustainable | 11 | | Investing Act. The report shall: | 12 | | (1) describe the Board's strategy as it relates to the | 13 | | consideration of sustainable investment factors; | 14 | | (2) outline the process for regular assessment across | 15 | | the total portfolio of potential effects from systemic and | 16 | | regulatory risks and opportunities, including, but not | 17 | | limited to, sustainability factors on the assets of the | 18 | | plan; | 19 | | (3) disclose how each investment manager serving as a | 20 | | fiduciary to the Board integrates sustainability factors | 21 | | into the investment manager's investment decision-making | 22 | | process; | 23 | | (4) provide a comprehensive proxy voting report; | 24 | | (5) provide an overview of all corporate engagement | 25 | | and stewardship activities; and |
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| 1 | | (6) include any other information the Board deems | 2 | | necessary. | 3 | | (40 ILCS 5/16-188 new) | 4 | | Sec. 16-188. Proxy voting. | 5 | | (a) In this Section, "fiduciary" has the meaning given to | 6 | | that term in Section 1-101.2. | 7 | | (b) Notwithstanding the Board's investment authority, and | 8 | | upon the affirmative vote of at least three-fifths of the | 9 | | members of the Board, the State Treasurer shall be authorized | 10 | | to manage the domestic and international proxy voting activity | 11 | | for shares held directly by the System and execute required | 12 | | ballots on behalf of the System. The Board's consent granted | 13 | | under this Section may be revoked at any time upon the | 14 | | affirmative vote of a majority of the members of the Board. | 15 | | (c) When the State Treasurer is managing any proxy voting | 16 | | activity in accordance with subsection (b), the following | 17 | | shall apply: (1) the State Treasurer shall provide the Board | 18 | | with (i) comprehensive proxy voting reports on a quarterly | 19 | | basis and as requested by the Board and (ii) access to | 20 | | communications with its third-party proxy voting service, if | 21 | | any, used in preparing the comprehensive proxy voting reports | 22 | | requested by the Board; and (2) the Board may provide the State | 23 | | Treasurer with guidance for proxy voting, which, if provided, | 24 | | the State Treasurer shall consider when voting. | 25 | | (d) The State Treasurer shall act as a fiduciary to the |
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| 1 | | System with regard to all aspects of the State Treasurer's | 2 | | management of the proxy voting activity as provided under | 3 | | subsection (b). | 4 | | (e) With respect to this Section, and with respect to the | 5 | | State Treasurer's management of the proxy voting activity as | 6 | | provided for under subsection (b), the Board is exempt from | 7 | | any conflicting statutory or common law obligations, including | 8 | | any fiduciary or co-fiduciary duties under this Article and | 9 | | Article 1. | 10 | | (f) With respect to this Section and with respect to the | 11 | | State Treasurer's management of the proxy voting activity as | 12 | | provided for under subsection (b), the Board, its staff, and | 13 | | the trustees of the Board shall not be liable for any damage or | 14 | | suits where damages are sought for negligent or wrongful acts | 15 | | alleged to have been committed in connection with the | 16 | | management of proxy voting activity as provided for under this | 17 | | Section. | 18 | | (g) In order to facilitate the State Treasurer's proxy | 19 | | voting activities under this Section and before the State | 20 | | Treasurer begins proxy voting activities, the State Treasurer | 21 | | and the Board shall enter into an intergovernmental agreement | 22 | | concerning costs, proxy voting guidance, reports and other | 23 | | documents, and other issues. | 24 | | (h) This Section is repealed on January 1, 2027. | 25 | | (40 ILCS 5/16-189 new) |
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| 1 | | Sec. 16-189. Fiduciary report. On or before September 1, | 2 | | 2023, and annually thereafter, the Board shall publish its | 3 | | guidelines for voting proxy ballots and a detailed report on | 4 | | its website describing how the Board is considering | 5 | | sustainability factors as defined in the Illinois Sustainable | 6 | | Investing Act. The report shall: | 7 | | (1) describe the Board's strategy as it relates to the | 8 | | consideration of sustainable investment factors; | 9 | | (2) outline the process for regular assessment across | 10 | | the total portfolio of potential effects from systemic and | 11 | | regulatory risks and opportunities, including, but not | 12 | | limited to, sustainability factors on the assets of the | 13 | | plan; | 14 | | (3) disclose how each investment manager serving as a | 15 | | fiduciary to the Board integrates sustainability factors | 16 | | into the investment manager's investment decision-making | 17 | | process; | 18 | | (4) provide a comprehensive proxy voting report; | 19 | | (5) provide an overview of all corporate engagement | 20 | | and stewardship activities; and | 21 | | (6) include any other information the Board deems | 22 | | necessary.
| 23 | | (40 ILCS 5/22A-106) (from Ch. 108 1/2, par. 22A-106)
| 24 | | Sec. 22A-106. "Manage": To invest, reinvest, exchange and | 25 | | to perform all investment
functions with regard to reserves, |
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| 1 | | funds, assets, securities and moneys
which the board is | 2 | | authorized to invest, and to preserve and protect such
| 3 | | reserves, funds, assets, securities and moneys, including, but | 4 | | not limited
to, authority to vote any stocks, bonds or other | 5 | | securities and to give
general or special proxies or powers of | 6 | | attorney with or without power of
substitution , except that | 7 | | the authority to vote proxies is subject to
Section 22A-113.4 . | 8 | | This term shall not include any functions, duties and
| 9 | | responsibilities incident to the operation and administration | 10 | | of pension
funds or education fund other than that of | 11 | | investments.
| 12 | | (Source: P.A. 84-1127.)
| 13 | | (40 ILCS 5/22A-113.4 new) | 14 | | Sec. 22A-113.4. Proxy voting. | 15 | | (a) In this Section, "fiduciary" has the meaning given to | 16 | | that term in Section 1-101.2. | 17 | | (b) Notwithstanding the Board's investment authority, and | 18 | | upon the affirmative vote of at least three-fifths of the | 19 | | members of the Board, the State Treasurer shall be authorized | 20 | | to manage the domestic and international proxy voting activity | 21 | | for shares held directly by the Board and execute required | 22 | | ballots on behalf of the Board. The Board's consent granted | 23 | | under this Section may be revoked at any time upon the | 24 | | affirmative vote of a majority of the members of the Board. | 25 | | (c) When the State Treasurer is managing any proxy voting |
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| 1 | | activity in accordance with subsection (b), the following | 2 | | shall apply: (1) the State Treasurer shall provide the Board | 3 | | with (i) comprehensive proxy voting reports on a quarterly | 4 | | basis and as requested by the Board and (ii) access to | 5 | | communications with its third-party proxy voting service, if | 6 | | any, used in preparing the comprehensive proxy voting reports | 7 | | requested by the Board; and (2) the Board may provide the State | 8 | | Treasurer with guidance for proxy voting, which, if provided, | 9 | | the State Treasurer shall consider when voting. | 10 | | (d) The State Treasurer shall act as a fiduciary to the | 11 | | Illinois State Board of Investment with regard to all aspects | 12 | | of the State Treasurer's management of the proxy voting | 13 | | activity as provided under subsection (b). | 14 | | (e) With respect to this Section, and with respect to the | 15 | | State Treasurer's management of the proxy voting activity as | 16 | | provided for under subsection (b), the Board is exempt from | 17 | | any conflicting statutory or common law obligations, including | 18 | | any fiduciary or co-fiduciary duties under this Article and | 19 | | Article 1. | 20 | | (f) With respect to this Section and with respect to the | 21 | | State Treasurer's management of the proxy voting activity as | 22 | | provided for under subsection (b), the Board, its staff, and | 23 | | the trustees of the Board shall not be liable for any damage or | 24 | | suits where damages are sought for negligent or wrongful acts | 25 | | alleged to have been committed in connection with the | 26 | | management of proxy voting activity as provided for under this |
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| 1 | | Section. | 2 | | (g) In order to facilitate the State Treasurer's proxy | 3 | | voting activities under this Section and before the State | 4 | | Treasurer begins proxy voting activities, the State Treasurer | 5 | | and the Board shall enter into an intergovernmental agreement | 6 | | concerning costs, proxy voting guidance, reports and other | 7 | | documents, and other issues. | 8 | | (h) This Section is repealed on January 1, 2027. | 9 | | (40 ILCS 5/22A-113.5 new) | 10 | | Sec. 22A-113.5. Fiduciary report. On or before September | 11 | | 1, 2023, and annually thereafter, the Board shall publish its | 12 | | guidelines for voting proxy ballots and a detailed report on | 13 | | its website describing how the Board is considering | 14 | | sustainability factors as defined in the Illinois Sustainable | 15 | | Investing Act. The report shall: | 16 | | (1) describe the Board's strategy as it relates to the | 17 | | consideration of sustainable investment factors; | 18 | | (2) outline the process for regular assessment across | 19 | | the total portfolio of potential effects from systemic and | 20 | | regulatory risks and opportunities, including, but not | 21 | | limited to, sustainability factors on the assets of the | 22 | | plan; | 23 | | (3) disclose how each investment manager serving as a | 24 | | fiduciary to the Board integrates sustainability factors | 25 | | into the investment manager's investment decision-making |
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| 1 | | process; | 2 | | (4) provide a comprehensive proxy voting report; | 3 | | (5) provide an overview of all corporate engagement | 4 | | and stewardship activities; and | 5 | | (6) include any other information the Board deems | 6 | | necessary.
| 7 | | Section 99. Effective date. This Act takes effect upon | 8 | | becoming law.
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