HB3776 - 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.

  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.