89R9326 JCG-D
By: Paul H.B. No. 3776
A BILL TO BE ENTITLED
AN ACT
relating to reporting requirements for a public retirement system
that authorizes the system's shares to be voted by a proxy advisor
or investment manager.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 802, Government Code, is
amended by adding Section 802.208 to read as follows:
Sec. 802.208. PROXY VOTING: ANNUAL REPORTING. (a) In this
section:
(1) "Investment manager" means a person who for
compensation provides professional investment management services.
The term:
(A) includes a person eligible for appointment as
an investment manager under Section 802.204; and
(B) does not include:
(i) an employee or member of an advisory
committee of a public retirement system; or
(ii) a seller of security interests.
(2) "Proxy advisor" means a person who for
compensation provides corporate governance ratings, proxy research
and analyses, proxy voting, or other similar services to the
shareholders of a publicly traded entity, or other interested
parties, for the purpose of advising a shareholder or other
interested party on how to vote on measures under consideration by
shareholders or voting on behalf of a shareholder by proxy.
(b) This section applies only to a public retirement system
that holds shares that the system is entitled to vote by proxy.
(c) Except as provided by Subsection (d), not later than the
180th day after the last day of a public retirement system's fiscal
year, the governing body of the system shall tabulate all proxy
votes made on behalf of the system by proxy advisors during the
preceding fiscal year of the system and report the votes to the
State Pension Review Board. For each vote, the report must contain a
vote caption, the system's vote, the recommendation, if any, of the
company holding the election, and, as applicable, the
recommendation of the proxy advisor. The State Pension Review Board
shall post reports submitted under this subsection to the board's
publicly accessible Internet website.
(d) Instead of submitting a report under Subsection (c), the
governing body of a public retirement system may provide to the
State Pension Review Board the location of a report posted to the
system's publicly accessible Internet website that contains the
information required by that subsection.
(e) Except as provided by Subsection (f), if the governing
body of a public retirement system grants proxy voting authority to
an investment manager, the investment manager shall submit a report
to the retirement system, and the retirement system shall submit a
report to the State Pension Review Board, that tabulates all proxy
votes cast by the investment manager on behalf of the system for
each 12-month period the investment manager is managing any assets
of the system. The State Pension Review Board shall post the reports
submitted under this subsection to the board's publicly accessible
Internet website.
(f) Subsection (e) does not apply to an investment manager
that manages less than $50 million of a public retirement system's
assets.
(g) The State Pension Review Board may adopt rules to
implement this section.
SECTION 2. The changes in law made by this Act apply only to
a contract entered into on or after the effective date of this Act.
A contract entered into before the effective date of this Act is
governed by the law in effect on the date the contract was entered
into, and the former law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2025.