Full Text of SB2152 103rd General Assembly
SB2152sam002 103RD GENERAL ASSEMBLY | Sen. Bill Cunningham Filed: 3/22/2023
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| 1 | | AMENDMENT TO SENATE BILL 2152
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2152 by replacing | 3 | | everything after the enacting clause with the following:
| 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, the | 12 | | State Treasurer, upon the request of the Board, shall manage | 13 | | the domestic and international proxy voting activity for | 14 | | shares held directly by the System and execute required | 15 | | ballots on behalf of the System. The State Treasurer shall | 16 | | provide the Board with comprehensive proxy voting reports on a |
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| 1 | | quarterly basis and as requested by the Board. | 2 | | (c) The State Treasurer shall act as a fiduciary to the | 3 | | System with regard to all aspects of the State Treasurer's | 4 | | management of the proxy voting activity as provided under | 5 | | subsection (b). | 6 | | (d) With respect to this Section, and with respect to the | 7 | | State Treasurer's management of the proxy voting activity as | 8 | | provided for under subsection (b), the Board is exempt from | 9 | | any conflicting statutory or common law obligations, including | 10 | | any fiduciary or co-fiduciary duties under this Article and | 11 | | Article 1. | 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, its staff, and | 15 | | the trustees of the Board shall not be liable for any damage or | 16 | | suits where damages are sought for negligent or wrongful acts | 17 | | alleged to have been committed in connection with the | 18 | | management of proxy voting activity as provided for under this | 19 | | Section. | 20 | | (f) All costs associated with the State Treasurer's | 21 | | management of proxy voting activity under subsection (b) shall | 22 | | be borne exclusively by the State Treasurer, including, but | 23 | | not limited to, any payments to a third-party service provider | 24 | | to provide proxy voting services. | 25 | | (g) This Section is repealed on January 1, 2027. |
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| 1 | | (40 ILCS 5/15-177.6 new) | 2 | | Sec. 15-177.6. Fiduciary report. On or before January 1, | 3 | | 2025, and annually thereafter, the Board shall publish its | 4 | | guidelines for voting proxy ballots and a detailed report on | 5 | | its website describing how the Board is considering | 6 | | sustainability factors as defined in the Illinois Sustainable | 7 | | Investing Act. The report shall: | 8 | | (1) describe the Board's strategy as it relates to the | 9 | | consideration of sustainable investment factors; | 10 | | (2) outline the process for regular assessment across | 11 | | the total portfolio of potential effects from systemic and | 12 | | regulatory risks and opportunities, including, but not | 13 | | limited to, environmental factors on the assets of the | 14 | | plan; | 15 | | (3) disclose how each investment manager serving as a | 16 | | fiduciary to the Board integrates sustainability factors | 17 | | into the investment manager's investment decision-making | 18 | | process; | 19 | | (4) provide a comprehensive proxy voting report; | 20 | | (5) provide an overview of all corporate engagement | 21 | | and stewardship activities; and | 22 | | (6) include any other information the Board deems | 23 | | necessary. | 24 | | (40 ILCS 5/16-188 new) | 25 | | Sec. 16-188. Proxy voting. |
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| 1 | | (a) In this Section, "fiduciary" has the meaning given to | 2 | | that term in Section 1-101.2. | 3 | | (b) Notwithstanding the Board's investment authority, the | 4 | | State Treasurer, upon the request of the Board, shall manage | 5 | | the domestic and international proxy voting activity for | 6 | | shares held directly by the System and execute required | 7 | | ballots on behalf of the System. The State Treasurer shall | 8 | | provide the Board with comprehensive proxy voting reports on a | 9 | | quarterly basis and as requested by the Board. | 10 | | (c) The State Treasurer shall act as a fiduciary to the | 11 | | System with regard to all aspects of the State Treasurer's | 12 | | management of the proxy voting activity as provided under | 13 | | subsection (b). | 14 | | (d) 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 | | (e) 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 | | (f) All costs associated with the State Treasurer's | 3 | | management of proxy voting activity under subsection (b) shall | 4 | | be borne exclusively by the State Treasurer, including, but | 5 | | not limited to, any payments to a third-party service provider | 6 | | to provide proxy voting services. | 7 | | (g) This Section is repealed on January 1, 2027. | 8 | | (40 ILCS 5/16-189 new) | 9 | | Sec. 16-189. Fiduciary report. On or before January 1, | 10 | | 2025, and annually thereafter, the Board shall publish its | 11 | | guidelines for voting proxy ballots and a detailed report on | 12 | | its website describing how the Board is considering | 13 | | sustainability factors as defined in the Illinois Sustainable | 14 | | Investing Act. The report shall: | 15 | | (1) describe the Board's strategy as it relates to the | 16 | | consideration of sustainable investment factors; | 17 | | (2) outline the process for regular assessment across | 18 | | the total portfolio of potential effects from systemic and | 19 | | regulatory risks and opportunities, including, but not | 20 | | limited to, environmental factors on the assets of the | 21 | | plan; | 22 | | (3) disclose how each investment manager serving as a | 23 | | fiduciary to the Board integrates sustainability factors | 24 | | into the investment manager's investment decision-making | 25 | | process; |
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| 1 | | (4) provide a comprehensive proxy voting report; | 2 | | (5) provide an overview of all corporate engagement | 3 | | and stewardship activities; and | 4 | | (6) include any other information the Board deems | 5 | | necessary.
| 6 | | (40 ILCS 5/22A-106) (from Ch. 108 1/2, par. 22A-106)
| 7 | | Sec. 22A-106. "Manage": To invest, reinvest, exchange and | 8 | | to perform all investment
functions with regard to reserves, | 9 | | funds, assets, securities and moneys
which the board is | 10 | | authorized to invest, and to preserve and protect such
| 11 | | reserves, funds, assets, securities and moneys, including, but | 12 | | not limited
to, authority to vote any stocks, bonds or other | 13 | | securities and to give
general or special proxies or powers of | 14 | | attorney with or without power of
substitution , except that | 15 | | the authority to vote proxies is subject to
Section 22A-113.4 . | 16 | | This term shall not include any functions, duties and
| 17 | | responsibilities incident to the operation and administration | 18 | | of pension
funds or education fund other than that of | 19 | | investments.
| 20 | | (Source: P.A. 84-1127.)
| 21 | | (40 ILCS 5/22A-113.4 new) | 22 | | Sec. 22A-113.4. Proxy voting. | 23 | | (a) In this Section, "fiduciary" has the meaning given to | 24 | | that term in Section 1-101.2. |
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| 1 | | (b) Notwithstanding the Board's investment authority, the | 2 | | State Treasurer, upon the request of the Board, shall manage | 3 | | the domestic and international proxy voting activity for | 4 | | shares held directly by the Board and execute required ballots | 5 | | on behalf of the Board. The State Treasurer shall provide the | 6 | | Board with comprehensive proxy voting reports on a quarterly | 7 | | basis and as requested. | 8 | | (c) The State Treasurer shall act as a fiduciary to the | 9 | | Illinois State Board of Investment with regard to all aspects | 10 | | of the State Treasurer's management of the proxy voting | 11 | | activity as provided under subsection (b). | 12 | | (d) 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 | | (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, 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 | | (f) All costs associated with the State Treasurer's |
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| 1 | | management of proxy voting activity under subsection (b) shall | 2 | | be borne exclusively by the State Treasurer, including, but | 3 | | not limited to, any payments to a third-party service provider | 4 | | to provide proxy voting services. | 5 | | (g) This Section is repealed on January 1, 2027. | 6 | | (40 ILCS 5/22A-113.5 new) | 7 | | Sec. 22A-113.5. Fiduciary report. On or before January 1, | 8 | | 2025, and annually thereafter, the Board shall publish its | 9 | | guidelines for voting proxy ballots and a detailed report on | 10 | | its website describing how the Board is considering | 11 | | sustainability factors as defined in the Illinois Sustainable | 12 | | Investing Act. The report shall: | 13 | | (1) describe the Board's strategy as it relates to the | 14 | | consideration of sustainable investment factors; | 15 | | (2) outline the process for regular assessment across | 16 | | the total portfolio of potential effects from systemic and | 17 | | regulatory risks and opportunities, including, but not | 18 | | limited to, environmental factors on the assets of the | 19 | | plan; | 20 | | (3) disclose how each investment manager serving as a | 21 | | fiduciary to the Board integrates sustainability factors | 22 | | into the investment manager's investment decision-making | 23 | | process; | 24 | | (4) provide a comprehensive proxy voting report; | 25 | | (5) provide an overview of all corporate engagement |
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| 1 | | and stewardship activities; and | 2 | | (6) include any other information the Board deems | 3 | | necessary.
| 4 | | Section 99. Effective date. This Act takes effect January | 5 | | 1, 2024.".
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