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A BILL TO BE ENTITLED
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AN ACT
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relating to reporting requirements for a public retirement system |
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that authorizes the system's shares to be voted by a proxy advisor |
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or investment manager. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 802, Government Code, is |
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amended by adding Section 802.208 to read as follows: |
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Sec. 802.208. PROXY VOTING: ANNUAL REPORTING. (a) In this |
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section: |
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(1) "Investment manager" means a person who for |
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compensation provides professional investment management services. |
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The term: |
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(A) includes a person eligible for appointment as |
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an investment manager under Section 802.204; and |
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(B) does not include: |
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(i) an employee or member of an advisory |
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committee of a public retirement system; or |
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(ii) a seller of security interests. |
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(2) "Proxy advisor" means a person who for |
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compensation provides corporate governance ratings, proxy research |
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and analyses, proxy voting, or other similar services to the |
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shareholders of a publicly traded entity, or other interested |
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parties, for the purpose of advising a shareholder or other |
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interested party on how to vote on measures under consideration by |
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shareholders or voting on behalf of a shareholder by proxy. |
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(b) This section applies only to a public retirement system |
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that holds shares that the system is entitled to vote by proxy. |
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(c) Except as provided by Subsection (d), not later than the |
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180th day after the last day of a public retirement system's fiscal |
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year, the governing body of the system shall tabulate all proxy |
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votes made on behalf of the system by proxy advisors during the |
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preceding fiscal year of the system and report the votes to the |
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State Pension Review Board. For each vote, the report must contain a |
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vote caption, the system's vote, the recommendation, if any, of the |
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company holding the election, and, as applicable, the |
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recommendation of the proxy advisor. The State Pension Review Board |
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shall post reports submitted under this subsection to the board's |
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publicly accessible Internet website. |
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(d) Instead of submitting a report under Subsection (c), the |
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governing body of a public retirement system may provide to the |
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State Pension Review Board the location of a report posted to the |
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system's publicly accessible Internet website that contains the |
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information required by that subsection. |
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(e) Except as provided by Subsection (f), if the governing |
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body of a public retirement system grants proxy voting authority to |
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an investment manager, the investment manager shall submit a report |
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to the retirement system, and the retirement system shall submit a |
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report to the State Pension Review Board, that tabulates all proxy |
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votes cast by the investment manager on behalf of the system for |
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each 12-month period the investment manager is managing any assets |
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of the system. The State Pension Review Board shall post the reports |
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submitted under this subsection to the board's publicly accessible |
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Internet website. |
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(f) Subsection (e) does not apply to an investment manager |
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that manages less than $50 million of a public retirement system's |
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assets. |
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(g) The State Pension Review Board may adopt rules to |
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implement this section. |
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SECTION 2. The changes in law made by this Act apply only to |
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a contract entered into on or after the effective date of this Act. |
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A contract entered into before the effective date of this Act is |
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governed by the law in effect on the date the contract was entered |
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into, and the former law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2025. |