HB 2457
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ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
HB 2457: government investments; plans; fiduciaries; products
Sponsor: Representative Montenegro, LD 29
Committee on Government
Overview
Prescribes requirements relating to the handling of public funds.
History
The State Treasurer is charged with receiving and keeping in secure custody all monies that
belong to the state. Additionally, the State Treasurer is required to keep an account of all
monies that are received and disbursed and keep separate accounts of the appropriations of
money and the different funds (A.R.S. § 41-172).
Provisions
1. Directs the State Treasurer to post, on its publicly accessible website, a current list of
state investments by name and investment managers and update any changes to the lists
within a reasonable period of time. (Sec. 1)
2. Declares that all state investments must be made in the sole interest of the beneficiary
taxpayer. (Sec. 1)
3. Requires the State Treasurer's evaluation of an investment to be based on pecuniary
factors as statutorily prescribed. (Sec. 1)
4. Prohibits the State Treasurer from taking unnecessary investment risks or promoting
nonpecuniary benefits or social goals. (Sec. 1)
5. Stipulates that a fiduciary must discharge their duties with respect to a plan solely in the
interest of the participants and beneficiaries of the plan for:
a) the exclusive purpose of providing pecuniary benefits;
b) defraying reasonable expenses of administering the plan; and
c) earning a return on the investment. (Sec. 2)
6. Limits a fiduciary from taking into account pecuniary factors in the evaluation of an
investment or when discharging the fiduciary's duties with respect to a plan. (Sec. 2)
7. Prohibits a fiduciary from taking into account any nonpecuniary or other factors when
evaluating an investment. (Sec. 2)
8. Asserts that only the governmental entity that establishes or maintains a plan is allowed
to vote the shares held by the plan. (Sec. 2)
9. Prohibits a governmental entity from granting proxy voting authority to any person not
part of the governmental entity unless the person follows the obligation to act based only
on pecuniary factors. (Sec. 2) HB 2457
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10. Provides that the shares held by a plan must be voted only in the pecuniary interest of
the plan. (Sec. 2)
11. Establishes that the shares of a plan may not be voted to further environmental,
ideological, nonpecuniary, political, social or other benefits or goals. (Sec. 2)
12. States that a plan may not entrust any plan assets to a fiduciary that has a practice of:
a) engaging with a company based on nonpecuniary factors; or
b) voting shares based on nonpecuniary factors. (Sec. 2)
13. Prohibits a fiduciary from adopting a practice of following the recommendations of a proxy
advisory firm or other service provider unless their guidelines are consistent with the
obligation to act based only on pecuniary factors. (Sec. 2)
14. Defines:
a) fiduciary;
b) nonpecuniary;
c) pecuniary factor; and
d) plan. (Sec. 2)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note