Bill Amendment: IL SB2152 | 2023-2024 | 103rd General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: PEN CD-INVESTMENT PROXY VOTING

Status: 2023-08-07 - Public Act . . . . . . . . . 103-0468 [SB2152 Detail]

Download: Illinois-2023-SB2152-Senate_Amendment_002.html

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Sen. Bill Cunningham

Filed: 3/22/2023

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AMENDMENT TO SENATE BILL 2152
AMENDMENT NO. ______. Amend Senate Bill 2152 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Pension Code is amended by
changing Section 22A-106 and by adding Sections 15-177.5,
15-177.6, 16-188, 16-189, 22A-113.4, and 22A-113.5 as follows:
(40 ILCS 5/15-177.5 new)
Sec. 15-177.5. Proxy voting.
(a) In this Section, "fiduciary" has the meaning given to
that term in Section 1-101.2.
(b) Notwithstanding the Board's investment authority, the
State Treasurer, upon the request of the Board, shall manage
the domestic and international proxy voting activity for
shares held directly by the System and execute required
ballots on behalf of the System. The State Treasurer shall
provide the Board with comprehensive proxy voting reports on a

10300SB2152sam002 - 2 - LRB103 30754 RPS 59693 a
quarterly basis and as requested by the Board.
(c) The State Treasurer shall act as a fiduciary to the
System with regard to all aspects of the State Treasurer's
management of the proxy voting activity as provided under
subsection (b).
(d) With respect to this Section, and with respect to the
State Treasurer's management of the proxy voting activity as
provided for under subsection (b), the Board is exempt from
any conflicting statutory or common law obligations, including
any fiduciary or co-fiduciary duties under this Article and
Article 1.
(e) With respect to this Section and with respect to the
State Treasurer's management of the proxy voting activity as
provided for under subsection (b), the Board, its staff, and
the trustees of the Board shall not be liable for any damage or
suits where damages are sought for negligent or wrongful acts
alleged to have been committed in connection with the
management of proxy voting activity as provided for under this
Section.
(f) All costs associated with the State Treasurer's
management of proxy voting activity under subsection (b) shall
be borne exclusively by the State Treasurer, including, but
not limited to, any payments to a third-party service provider
to provide proxy voting services.
(g) This Section is repealed on January 1, 2027.

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(40 ILCS 5/15-177.6 new)
Sec. 15-177.6. Fiduciary report. On or before January 1,
2025, and annually thereafter, the Board shall publish its
guidelines for voting proxy ballots and a detailed report on
its website describing how the Board is considering
sustainability factors as defined in the Illinois Sustainable
Investing Act. The report shall:
(1) describe the Board's strategy as it relates to the
consideration of sustainable investment factors;
(2) outline the process for regular assessment across
the total portfolio of potential effects from systemic and
regulatory risks and opportunities, including, but not
limited to, environmental factors on the assets of the
plan;
(3) disclose how each investment manager serving as a
fiduciary to the Board integrates sustainability factors
into the investment manager's investment decision-making
process;
(4) provide a comprehensive proxy voting report;
(5) provide an overview of all corporate engagement
and stewardship activities; and
(6) include any other information the Board deems
necessary.
(40 ILCS 5/16-188 new)
Sec. 16-188. Proxy voting.

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(a) In this Section, "fiduciary" has the meaning given to
that term in Section 1-101.2.
(b) Notwithstanding the Board's investment authority, the
State Treasurer, upon the request of the Board, shall manage
the domestic and international proxy voting activity for
shares held directly by the System and execute required
ballots on behalf of the System. The State Treasurer shall
provide the Board with comprehensive proxy voting reports on a
quarterly basis and as requested by the Board.
(c) The State Treasurer shall act as a fiduciary to the
System with regard to all aspects of the State Treasurer's
management of the proxy voting activity as provided under
subsection (b).
(d) With respect to this Section and with respect to the
State Treasurer's management of the proxy voting activity as
provided for under subsection (b), the Board is exempt from
any conflicting statutory or common law obligations, including
any fiduciary or co-fiduciary duties under this Article and
Article 1.
(e) With respect to this Section and with respect to the
State Treasurer's management of the proxy voting activity as
provided for under subsection (b), the Board, its staff, and
the trustees of the Board shall not be liable for any damage or
suits where damages are sought for negligent or wrongful acts
alleged to have been committed in connection with the
management of proxy voting activity as provided for under this

10300SB2152sam002 - 5 - LRB103 30754 RPS 59693 a
Section.
(f) All costs associated with the State Treasurer's
management of proxy voting activity under subsection (b) shall
be borne exclusively by the State Treasurer, including, but
not limited to, any payments to a third-party service provider
to provide proxy voting services.
(g) This Section is repealed on January 1, 2027.
(40 ILCS 5/16-189 new)
Sec. 16-189. Fiduciary report. On or before January 1,
2025, and annually thereafter, the Board shall publish its
guidelines for voting proxy ballots and a detailed report on
its website describing how the Board is considering
sustainability factors as defined in the Illinois Sustainable
Investing Act. The report shall:
(1) describe the Board's strategy as it relates to the
consideration of sustainable investment factors;
(2) outline the process for regular assessment across
the total portfolio of potential effects from systemic and
regulatory risks and opportunities, including, but not
limited to, environmental factors on the assets of the
plan;
(3) disclose how each investment manager serving as a
fiduciary to the Board integrates sustainability factors
into the investment manager's investment decision-making
process;

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(4) provide a comprehensive proxy voting report;
(5) provide an overview of all corporate engagement
and stewardship activities; and
(6) include any other information the Board deems
necessary.
(40 ILCS 5/22A-106) (from Ch. 108 1/2, par. 22A-106)
Sec. 22A-106. "Manage": To invest, reinvest, exchange and
to perform all investment functions with regard to reserves,
funds, assets, securities and moneys which the board is
authorized to invest, and to preserve and protect such
reserves, funds, assets, securities and moneys, including, but
not limited to, authority to vote any stocks, bonds or other
securities and to give general or special proxies or powers of
attorney with or without power of substitution, except that
the authority to vote proxies is subject to Section 22A-113.4.
This term shall not include any functions, duties and
responsibilities incident to the operation and administration
of pension funds or education fund other than that of
investments.
(Source: P.A. 84-1127.)
(40 ILCS 5/22A-113.4 new)
Sec. 22A-113.4. Proxy voting.
(a) In this Section, "fiduciary" has the meaning given to
that term in Section 1-101.2.

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(b) Notwithstanding the Board's investment authority, the
State Treasurer, upon the request of the Board, shall manage
the domestic and international proxy voting activity for
shares held directly by the Board and execute required ballots
on behalf of the Board. The State Treasurer shall provide the
Board with comprehensive proxy voting reports on a quarterly
basis and as requested.
(c) The State Treasurer shall act as a fiduciary to the
Illinois State Board of Investment with regard to all aspects
of the State Treasurer's management of the proxy voting
activity as provided under subsection (b).
(d) With respect to this Section, and with respect to the
State Treasurer's management of the proxy voting activity as
provided for under subsection (b), the Board is exempt from
any conflicting statutory or common law obligations, including
any fiduciary or co-fiduciary duties under this Article and
Article 1.
(e) With respect to this Section and with respect to the
State Treasurer's management of the proxy voting activity as
provided for under subsection (b), the Board, its staff, and
the trustees of the Board shall not be liable for any damage or
suits where damages are sought for negligent or wrongful acts
alleged to have been committed in connection with the
management of proxy voting activity as provided for under this
Section.
(f) All costs associated with the State Treasurer's

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management of proxy voting activity under subsection (b) shall
be borne exclusively by the State Treasurer, including, but
not limited to, any payments to a third-party service provider
to provide proxy voting services.
(g) This Section is repealed on January 1, 2027.
(40 ILCS 5/22A-113.5 new)
Sec. 22A-113.5. Fiduciary report. On or before January 1,
2025, and annually thereafter, the Board shall publish its
guidelines for voting proxy ballots and a detailed report on
its website describing how the Board is considering
sustainability factors as defined in the Illinois Sustainable
Investing Act. The report shall:
(1) describe the Board's strategy as it relates to the
consideration of sustainable investment factors;
(2) outline the process for regular assessment across
the total portfolio of potential effects from systemic and
regulatory risks and opportunities, including, but not
limited to, environmental factors on the assets of the
plan;
(3) disclose how each investment manager serving as a
fiduciary to the Board integrates sustainability factors
into the investment manager's investment decision-making
process;
(4) provide a comprehensive proxy voting report;
(5) provide an overview of all corporate engagement

10300SB2152sam002 - 9 - LRB103 30754 RPS 59693 a
and stewardship activities; and
(6) include any other information the Board deems
necessary.
Section 99. Effective date. This Act takes effect January
1, 2024.".