Full Text of SB2152 103rd General Assembly
SB2152sam003 103RD GENERAL ASSEMBLY | Sen. Bill Cunningham Filed: 3/29/2023
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| 1 | | AMENDMENT TO SENATE BILL 2152
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2152, AS AMENDED, | 3 | | by replacing everything after the enacting clause with the | 4 | | following:
| 5 | | "Section 5. The Illinois Pension Code is amended by | 6 | | changing Section 22A-106 and by adding Sections 15-177.5, | 7 | | 15-177.6, 16-188, 16-189, 22A-113.4, and 22A-113.5 as follows: | 8 | | (40 ILCS 5/15-177.5 new) | 9 | | Sec. 15-177.5. Proxy voting. | 10 | | (a) In this Section, "fiduciary" has the meaning given to | 11 | | that term in Section 1-101.2. | 12 | | (b) Notwithstanding the Board's investment authority, and | 13 | | upon the affirmative vote of at least three-fifths of the | 14 | | members of the Board, the State Treasurer shall be authorized | 15 | | to manage the domestic and international proxy voting activity | 16 | | for shares held directly by the System and execute required |
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| 1 | | ballots on behalf of the System. The Board's consent granted | 2 | | under this Section may be revoked at any time upon the | 3 | | affirmative vote of a majority of the members of the Board. | 4 | | (c) When the State Treasurer is managing any proxy voting | 5 | | activity in accordance with subsection (b), the following | 6 | | shall apply: (1) the State Treasurer shall provide the Board | 7 | | with (i) comprehensive proxy voting reports on a quarterly | 8 | | basis and as requested by the Board and (ii) access to | 9 | | communications with its third-party proxy voting service, if | 10 | | any, used in preparing the comprehensive proxy voting reports | 11 | | requested by the Board; and (2) the Board may provide the State | 12 | | Treasurer with guidance for proxy voting, which, if provided, | 13 | | the State Treasurer shall consider when voting. | 14 | | (d) The State Treasurer shall act as a fiduciary to the | 15 | | System with regard to all aspects of the State Treasurer's | 16 | | management of the proxy voting activity as provided under | 17 | | subsection (b). | 18 | | (e) With respect to this Section, and with respect to the | 19 | | State Treasurer's management of the proxy voting activity as | 20 | | provided for under subsection (b), the Board is exempt from | 21 | | any conflicting statutory or common law obligations, including | 22 | | any fiduciary or co-fiduciary duties under this Article and | 23 | | Article 1. | 24 | | (f) With respect to this Section and with respect to the | 25 | | State Treasurer's management of the proxy voting activity as | 26 | | provided for under subsection (b), the Board, its staff, and |
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| 1 | | the trustees of the Board shall not be liable for any damage or | 2 | | suits where damages are sought for negligent or wrongful acts | 3 | | alleged to have been committed in connection with the | 4 | | management of proxy voting activity as provided for under this | 5 | | Section. | 6 | | (g) In order to facilitate the State Treasurer's proxy | 7 | | voting activities under this Section and before the State | 8 | | Treasurer begins proxy voting activities, the State Treasurer | 9 | | and the Board shall enter into an intergovernmental agreement | 10 | | concerning costs, proxy voting guidance, reports and other | 11 | | documents, and other issues. | 12 | | (h) This Section is repealed on January 1, 2027. | 13 | | (40 ILCS 5/15-177.6 new) | 14 | | Sec. 15-177.6. Fiduciary report. On or before September 1, | 15 | | 2023, and annually thereafter, the Board shall publish its | 16 | | guidelines for voting proxy ballots and a detailed report on | 17 | | its website describing how the Board is considering | 18 | | sustainability factors as defined in the Illinois Sustainable | 19 | | Investing Act. The report shall: | 20 | | (1) describe the Board's strategy as it relates to the | 21 | | consideration of sustainable investment factors; | 22 | | (2) outline the process for regular assessment across | 23 | | the total portfolio of potential effects from systemic and | 24 | | regulatory risks and opportunities, including, but not | 25 | | limited to, sustainability factors on the assets of the |
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| 1 | | plan; | 2 | | (3) disclose how each investment manager serving as a | 3 | | fiduciary to the Board integrates sustainability factors | 4 | | into the investment manager's investment decision-making | 5 | | process; | 6 | | (4) provide a comprehensive proxy voting report; | 7 | | (5) provide an overview of all corporate engagement | 8 | | and stewardship activities; and | 9 | | (6) include any other information the Board deems | 10 | | necessary. | 11 | | (40 ILCS 5/16-188 new) | 12 | | Sec. 16-188. Proxy voting. | 13 | | (a) In this Section, "fiduciary" has the meaning given to | 14 | | that term in Section 1-101.2. | 15 | | (b) Notwithstanding the Board's investment authority, and | 16 | | upon the affirmative vote of at least three-fifths of the | 17 | | members of the Board, the State Treasurer shall be authorized | 18 | | to manage the domestic and international proxy voting activity | 19 | | for shares held directly by the System and execute required | 20 | | ballots on behalf of the System. The Board's consent granted | 21 | | under this Section may be revoked at any time upon the | 22 | | affirmative vote of a majority of the members of the Board. | 23 | | (c) When the State Treasurer is managing any proxy voting | 24 | | activity in accordance with subsection (b), the following | 25 | | shall apply: (1) the State Treasurer shall provide the Board |
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| 1 | | with (i) comprehensive proxy voting reports on a quarterly | 2 | | basis and as requested by the Board and (ii) access to | 3 | | communications with its third-party proxy voting service, if | 4 | | any, used in preparing the comprehensive proxy voting reports | 5 | | requested by the Board; and (2) the Board may provide the State | 6 | | Treasurer with guidance for proxy voting, which, if provided, | 7 | | the State Treasurer shall consider when voting. | 8 | | (d) The State Treasurer shall act as a fiduciary to the | 9 | | System with regard to all aspects of the State Treasurer's | 10 | | management of the proxy voting activity as provided under | 11 | | subsection (b). | 12 | | (e) With respect to this Section, and with respect to the | 13 | | State Treasurer's management of the proxy voting activity as | 14 | | provided for under subsection (b), the Board is exempt from | 15 | | any conflicting statutory or common law obligations, including | 16 | | any fiduciary or co-fiduciary duties under this Article and | 17 | | Article 1. | 18 | | (f) With respect to this Section and with respect to the | 19 | | State Treasurer's management of the proxy voting activity as | 20 | | provided for under subsection (b), the Board, its staff, and | 21 | | the trustees of the Board shall not be liable for any damage or | 22 | | suits where damages are sought for negligent or wrongful acts | 23 | | alleged to have been committed in connection with the | 24 | | management of proxy voting activity as provided for under this | 25 | | Section. | 26 | | (g) In order to facilitate the State Treasurer's proxy |
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| 1 | | voting activities under this Section and before the State | 2 | | Treasurer begins proxy voting activities, the State Treasurer | 3 | | and the Board shall enter into an intergovernmental agreement | 4 | | concerning costs, proxy voting guidance, reports and other | 5 | | documents, and other issues. | 6 | | (h) This Section is repealed on January 1, 2027. | 7 | | (40 ILCS 5/16-189 new) | 8 | | Sec. 16-189. Fiduciary report. On or before September 1, | 9 | | 2023, and annually thereafter, the Board shall publish its | 10 | | guidelines for voting proxy ballots and a detailed report on | 11 | | its website describing how the Board is considering | 12 | | sustainability factors as defined in the Illinois Sustainable | 13 | | Investing Act. The report shall: | 14 | | (1) describe the Board's strategy as it relates to the | 15 | | consideration of sustainable investment factors; | 16 | | (2) outline the process for regular assessment across | 17 | | the total portfolio of potential effects from systemic and | 18 | | regulatory risks and opportunities, including, but not | 19 | | limited to, sustainability factors on the assets of the | 20 | | plan; | 21 | | (3) disclose how each investment manager serving as a | 22 | | fiduciary to the Board integrates sustainability factors | 23 | | into the investment manager's investment decision-making | 24 | | process; | 25 | | (4) provide a comprehensive proxy voting report; |
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| 1 | | (5) provide an overview of all corporate engagement | 2 | | and stewardship activities; and | 3 | | (6) include any other information the Board deems | 4 | | necessary.
| 5 | | (40 ILCS 5/22A-106) (from Ch. 108 1/2, par. 22A-106)
| 6 | | Sec. 22A-106. "Manage": To invest, reinvest, exchange and | 7 | | to perform all investment
functions with regard to reserves, | 8 | | funds, assets, securities and moneys
which the board is | 9 | | authorized to invest, and to preserve and protect such
| 10 | | reserves, funds, assets, securities and moneys, including, but | 11 | | not limited
to, authority to vote any stocks, bonds or other | 12 | | securities and to give
general or special proxies or powers of | 13 | | attorney with or without power of
substitution , except that | 14 | | the authority to vote proxies is subject to
Section 22A-113.4 . | 15 | | This term shall not include any functions, duties and
| 16 | | responsibilities incident to the operation and administration | 17 | | of pension
funds or education fund other than that of | 18 | | investments.
| 19 | | (Source: P.A. 84-1127.)
| 20 | | (40 ILCS 5/22A-113.4 new) | 21 | | Sec. 22A-113.4. Proxy voting. | 22 | | (a) In this Section, "fiduciary" has the meaning given to | 23 | | that term in Section 1-101.2. | 24 | | (b) Notwithstanding the Board's investment authority, and |
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| 1 | | upon the affirmative vote of at least three-fifths of the | 2 | | members of the Board, the State Treasurer shall be authorized | 3 | | to manage the domestic and international proxy voting activity | 4 | | for shares held directly by the Board and execute required | 5 | | ballots on behalf of the Board. The Board's consent granted | 6 | | under this Section may be revoked at any time upon the | 7 | | affirmative vote of a majority of the members of the Board. | 8 | | (c) When the State Treasurer is managing any proxy voting | 9 | | activity in accordance with subsection (b), the following | 10 | | shall apply: (1) the State Treasurer shall provide the Board | 11 | | with (i) comprehensive proxy voting reports on a quarterly | 12 | | basis and as requested by the Board and (ii) access to | 13 | | communications with its third-party proxy voting service, if | 14 | | any, used in preparing the comprehensive proxy voting reports | 15 | | requested by the Board; and (2) the Board may provide the State | 16 | | Treasurer with guidance for proxy voting, which, if provided, | 17 | | the State Treasurer shall consider when voting. | 18 | | (d) The State Treasurer shall act as a fiduciary to the | 19 | | Illinois State Board of Investment with regard to all aspects | 20 | | of the State Treasurer's management of the proxy voting | 21 | | activity as provided under subsection (b). | 22 | | (e) With respect to this Section, and with respect to the | 23 | | State Treasurer's management of the proxy voting activity as | 24 | | provided for under subsection (b), the Board is exempt from | 25 | | any conflicting statutory or common law obligations, including | 26 | | any fiduciary or co-fiduciary duties under this Article and |
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| 1 | | Article 1. | 2 | | (f) With respect to this Section and with respect to the | 3 | | State Treasurer's management of the proxy voting activity as | 4 | | provided for under subsection (b), the Board, its staff, and | 5 | | the trustees of the Board shall not be liable for any damage or | 6 | | suits where damages are sought for negligent or wrongful acts | 7 | | alleged to have been committed in connection with the | 8 | | management of proxy voting activity as provided for under this | 9 | | Section. | 10 | | (g) In order to facilitate the State Treasurer's proxy | 11 | | voting activities under this Section and before the State | 12 | | Treasurer begins proxy voting activities, the State Treasurer | 13 | | and the Board shall enter into an intergovernmental agreement | 14 | | concerning costs, proxy voting guidance, reports and other | 15 | | documents, and other issues. | 16 | | (h) This Section is repealed on January 1, 2027. | 17 | | (40 ILCS 5/22A-113.5 new) | 18 | | Sec. 22A-113.5. Fiduciary report. On or before September | 19 | | 1, 2023, and annually thereafter, the Board shall publish its | 20 | | guidelines for voting proxy ballots and a detailed report on | 21 | | its website describing how the Board is considering | 22 | | sustainability factors as defined in the Illinois Sustainable | 23 | | Investing Act. The report shall: | 24 | | (1) describe the Board's strategy as it relates to the | 25 | | consideration of sustainable investment factors; |
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| 1 | | (2) outline the process for regular assessment across | 2 | | the total portfolio of potential effects from systemic and | 3 | | regulatory risks and opportunities, including, but not | 4 | | limited to, sustainability factors on the assets of the | 5 | | plan; | 6 | | (3) disclose how each investment manager serving as a | 7 | | fiduciary to the Board integrates sustainability factors | 8 | | into the investment manager's investment decision-making | 9 | | process; | 10 | | (4) provide a comprehensive proxy voting report; | 11 | | (5) provide an overview of all corporate engagement | 12 | | and stewardship activities; and | 13 | | (6) include any other information the Board deems | 14 | | necessary.
| 15 | | Section 99. Effective date. This Act takes effect upon | 16 | | becoming law.".
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