ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

First Regular Session

House: GOV DPA/SE 9-0-0-0

HB 2156: proxy voting; governmental entities; prohibition

S/E: governmental entities; proxy voting; prohibition

Sponsor: Representative Livingston, LD 28

Caucus & COW

Summary of the Strike-Everything Amendment to HB 2156

Overview

Outlines requirements for the State Treasurer and states a governmental entities responsibilities and duties regarding investment decisions and voting held shares in respect to a plan.

History

The Office of the State Treasurer is responsible for the banking and investment management duties for the State of Arizona, provides investment services to local governments and exclusively manages the Permanent Land Endowment.

Currently, statute outlines the State Treasurer is responsible for the safekeeping of all securities acquired by him and those for which he is the lawful custodian. The State Treasurer can also enter into an agreement with investment managers to invest treasury monies or with advisors to recommend investment strategies or tactics for the investment of treasury monies, including legal advisors and software to assist with the analysis, tracking and trading of securities. Investment managers are required to regularly account for, itemize and inventory all securities and report the findings to the State Treasurer at least monthly or on demand (A.R.S. §§ 35-317 and 33-318).

Provisions

State Treasurer

1. Requires the State Treasurer to post a current list of its state investments by name and investment managers on the State Treasurer's website and update any changes within a reasonable period of time. (Sec. 1)

2. Asserts that all state investments are to be made in the sole interest of the beneficiary taxpayer. (Sec. 1)

3. Stipulates an investment evaluation, conducted by the State Treasurer, must be based on pecuniary factors. (Sec. 1)

Government Entities

4. Instructs a governmental entity, that establishes or maintains a plan, to make all direct investment decisions based solely on pecuniary factors when evaluating an investment. (Sec. 1)

5. Requries a governmental entity or their proxy to vote all directly held shares based on pecuniary factors. (Sec. 1)

6. States that a governmental entity that has indirect investments or commingled investments must notify its general partner or investment manager to:

a) make investment decisions based solely on pecuniary factors when evaluating an investment; and

b) proportionally vote directly held shares, or have its directly held shares proportionally voted, based solely on pecuniary factors. (Sec. 1)

7. Defines pecuniary factor and plan. (Sec. 1)

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11. HB 2156

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