Text of WY HB 80 (2025)

2025 STATE OF WYOMING 25LSO-0323 1 HB0080 HOUSE BILL NO. HB0080 Stop ESG-State funds fiduciary duty act. Sponsored by: Representative(s) Knapp, Angelos, Banks, Bear, Haroldson, Neiman, Singh, Tarver, Webb and Winter and Senator(s) Steinmetz A BILL for 1 AN ACT relating to the administration of the government; 2 specifying requirements for the hiring and retention of 3 investment managers, trustees and fiduciaries who invest 4 state funds as specified; specifying proxy voting 5 requirements for investment managers, trustees and 6 fiduciaries who invest state funds; providing definitions; 7 making conforming amendments; specifying applicability; and 8 providing for an effective date. 9 10 Be It Enacted by the Legislature of the State of Wyoming: 11 12 Section 1. W.S. 9-4-722 is created to read: 13 14 9-4-722. Investment of state funds; consideration of 15 only financial purposes. 2025 STATE OF WYOMING 25LSO-0323 2 HB0080 1 2 (a) As used in this section: 3 4 (i) "Fiduciary" means as defined by W.S. 5 9-3-434(a)(xi) and includes any investment trustee, manager 6 or other person responsible for making investment decisions 7 or investment policies concerning state funds; 8 9 (ii) "Fiduciary commitment" means any evidence 10 of a fiduciary's or trustee's purpose in managing the 11 investment of state funds, including but not limited to: 12 13 (A) Advertising, statements, explanations, 14 reports, letters to clients, communications with portfolio 15 companies, statements of principles or commitments; or 16 17 (B) Participation in, affiliation with or 18 status as a signatory to any coalition, initiative, joint 19 statement of principles or agreement. 20 21 (iii) "Financial" means having been prudently 22 determined by a fiduciary or trustee to have a material 23 effect on the financial risk or the financial return of an 2025 STATE OF WYOMING 25LSO-0323 3 HB0080 1 investment. "Financial" shall not include any action taken, 2 or factor considered, by a fiduciary or trustee with any 3 purpose whatsoever to further social, political or 4 ideological interests. A fiduciary may reasonably be 5 determined to have taken an action, or considered a factor, 6 with a purpose to further social, political or ideological 7 interests based upon evidence showing a fiduciary 8 commitment to further, through portfolio company 9 engagement, board or shareholder votes or other actions as 10 a fiduciary or a trustee, any of the following actions 11 beyond what state or federal law requires: 12 13 (A) Eliminating, reducing, offsetting or 14 disclosing greenhouse gas emissions; 15 16 (B) Instituting or assessing corporate 17 board or employment, composition, compensation or 18 disclosure criteria that incorporates characteristics 19 protected in this state as specified in W.S. 20 27-9-105(a)(i); 21 22 (C) Divesting from, limiting investment in 23 or limiting the activities or investments of any company 2025 STATE OF WYOMING 25LSO-0323 4 HB0080 1 for failing or not committing to meet environmental 2 standards or disclosures; 3 4 (D) Providing or increasing access to 5 abortion, sex or gender changes, transgender surgery or any 6 treatment or procedure that would violate W.S. 7 35-4-1001(b); 8 9 (E) Divesting from, limiting investment in 10 or limiting the activities of any company that engages in, 11 facilitates or supports the manufacture, import, 12 distribution, marketing, advertising, sale or lawful use of 13 firearms, ammunition, components, parts or accessories of 14 firearms or ammunition. 15 16 (iv) "Investment entity" means the state 17 treasurer, the state loan and investment board, the Wyoming 18 retirement board, the Wyoming retirement system and any 19 other entity responsible for the investment or management 20 of the investment of state funds; 21 22 (v) "State funds" means permanent funds as 23 defined by W.S. 9-4-714(a)(v), the retirement account 2025 STATE OF WYOMING 25LSO-0323 5 HB0080 1 established in W.S. 9-3-407(a), any other funds invested by 2 the Wyoming retirement system and any other funds invested 3 by the state treasurer. 4 5 (b) In making and supervising investments of state 6 funds, each investment entity shall discharge its 7 investment duties solely in the financial interest of the 8 beneficiaries of the applicable state funds for the 9 exclusive purposes of: 10 11 (i) Providing financial benefits to the 12 beneficiaries of the state funds; 13 14 (ii) Defraying reasonable expenses of 15 administering the investment of state funds; 16 17 (iii) Meeting other purposes required by law and 18 not relating to the actions and considerations prohibited 19 by this section. 20 21 (c) Any person or fiduciary designated as a custodian 22 of any state funds and any person or fiduciary retained to 2025 STATE OF WYOMING 25LSO-0323 6 HB0080 1 invest state funds shall be subject to the same fiduciary 2 duties as an investment entity has under this section. 3 4 (d) Each fiduciary shall take into account only 5 financial factors when discharging its duties in investing 6 state funds. 7 8 (e) All shares of stock held directly or indirectly 9 by or on behalf of an investment entity or on behalf of the 10 investment entity's beneficiaries shall be voted solely in 11 the financial interest of the beneficiaries. 12 13 (f) Unless no economically practicable alternative is 14 available: 15 16 (i) The investment entity shall not grant proxy 17 voting authority to any person who is not part of the 18 investment entity or who is not employed by the investment 19 entity, except that the investment entity may grant proxy 20 voting authority to a person who has a practice of, and 21 commits in writing to, follow guidelines that match the 22 investment entity's obligation to act solely upon financial 23 factors as required by this section; 2025 STATE OF WYOMING 25LSO-0323 7 HB0080 1 2 (ii) State funds shall not be entrusted to a 3 fiduciary unless the fiduciary has a practice of, and 4 commits in writing to, follow guidelines when engaging with 5 portfolio companies and voting shares or proxies that match 6 the investment entity's obligation to act solely upon 7 financial factors as required by this section; 8 9 (iii) No fiduciary shall adopt a practice of 10 following the recommendations of a proxy advisor or other 11 service provider unless the advisor or service provider has 12 a practice of, and commits in writing to, following proxy 13 voting guidelines that match the investment entity's 14 obligation to act solely upon financial factors as required 15 by this section. 16 17 (g) All proxy votes shall be tabulated and reported 18 annually by the investment entity not later than September 19 1 of each year. For each vote, the report shall contain a 20 vote caption, the plan's vote, the recommendation of 21 company management and, if applicable, the proxy advisor's 22 recommendation. Each report prepared under this subsection 23 shall be posted on the investment entity's website. 2025 STATE OF WYOMING 25LSO-0323 8 HB0080 1 2 (h) The attorney general may enforce any violation of 3 this section. If the attorney general believes that a 4 person has engaged in or is engaging in a violation of this 5 section, the attorney general may require the person to 6 file a statement or report in writing, under oath, as to 7 all of the facts and circumstances concerning the violation 8 and to provide any other data and information deemed 9 necessary. 10 11 (j) In addition to any other remedies available at 12 law or equity, any person who serves as a fiduciary and who 13 violates this section shall be liable for damages to the 14 investment entity in an amount equal to three (3) times the 15 amount paid to the person by the board for the person's 16 services. All amounts collected under this subsection shall 17 be deposited into the applicable state fund against which 18 the violation was committed. 19 20 Section 2. W.S. 9-3-405(a)(v), 9-3-408(b)(intro), 21 9-3-436(a), 9-3-440(a)(intro) and (b), 9-4-715(a)(intro) 22 and (b) and 9-4-716(a)(intro) are amended to read: 23 2025 STATE OF WYOMING 25LSO-0323 9 HB0080 1 9-3-405. Retirement board duties and powers. 2 3 (a) In addition to any other duties prescribed by 4 law, the board shall: 5 6 (v) Serve as investment trustee of the funds of 7 the system. In serving as investment trustee under this 8 paragraph, the board shall comply with the requirements of 9 W.S. 9-4-722; 10 11 9-3-408. Designated custodian of retirement account; 12 disbursements; investment of account monies. 13 14 (b) The board, or its designee, which shall be 15 registered under the Investment Advisor's Act of 1940 as 16 amended, or any bank as defined in that act, upon written 17 authority, shall invest monies in the retirement account, 18 which investments shall not be considered disbursements for 19 the purposes of W.S. 9-4-214 and subsection (a) of this 20 section. In investing and managing monies in the retirement 21 account and subject to the requirements of W.S. 9-4-722, 22 the board, or its designee, shall exercise the judgment and 23 care that a prudent investor would, in light of the 2025 STATE OF WYOMING 25LSO-0323 10 HB0080 1 purposes, terms, distribution requirements and all other 2 circumstances surrounding the monies in the retirement 3 account, including risk and return objectives established 4 by the board which are reasonably suitable to the purpose 5 of the Wyoming retirement system. 6 7 9-3-436. Establishment of trust. 8 9 (a) Except as otherwise provided in subsection (b) of 10 this section, all assets of a retirement system are held in 11 trust for the exclusive benefit of the members, retirees 12 and beneficiaries of the system, including reasonable 13 administrative expenses. The trustee has the exclusive 14 authority, subject to this act, to invest and manage those 15 assets, subject to the requirements of W.S. 9-4-722. 16 17 9-3-440. Duties of trustee in investing and managing 18 assets of retirement system. 19 20 (a) In investing and managing assets of a retirement 21 system pursuant to W.S. 9-3-439 and subject to W.S. 22 9-4-722, a trustee with authority to invest and manage 23 assets: 2025 STATE OF WYOMING 25LSO-0323 11 HB0080 1 2 (b) A trustee with authority to invest and manage 3 assets of a retirement system shall adopt a statement of 4 investment objectives and policies for each retirement 5 program or appropriate grouping of programs, subject to the 6 requirements of W.S. 9-4-722. The statement shall include 7 the desired rate of return on assets overall, the desired 8 rates of return and acceptable levels of risk for each 9 asset class, asset-allocation goals, guidelines for the 10 delegation of authority and information on the types of 11 reports to be used to evaluate investment performance. At 12 least annually, the trustee shall review the statement and 13 change or reaffirm it. 14 15 9-4-715. Permissible investments. 16 17 (a) The state treasurer, in consultation with the 18 investment funds committee, shall employ a designated chief 19 investment officer who shall have minimum qualifications 20 including at least ten (10) years of experience managing 21 institutional investment portfolios of in excess of five 22 hundred million dollars ($500,000,000.00), experience with 23 hiring and managing internal and external investment 2025 STATE OF WYOMING 25LSO-0323 12 HB0080 1 managers and extensive experience in any two (2) or more of 2 the following areas: domestic equity, fixed income 3 securities, international equity or alternative 4 investments. The designated chief investment officer shall 5 provide the state treasurer with information and 6 recommendations regarding the investment of state funds and 7 additional information as requested by the state treasurer. 8 The state treasurer shall compile an annual report which 9 shall include investment, income, individual and aggregate 10 gains and losses by fund and the extent to which the state 11 investment policy is being implemented. Subject to 12 requirements of W.S. 9-4-722 and subsection (c) of this 13 section, state funds may be invested in any investment: 14 15 (b) The state treasurer, or his designee, which shall 16 be registered under the Investment Advisor's Act of 1940 as 17 amended if required to be registered by the terms of that 18 act as amended, may invest the permanent funds in equities, 19 including stocks of corporations in accordance with 20 subsections (a) through (e) of this section, and W.S. 21 9-4-716 and 9-4-722. The state treasurer shall report at 22 least annually to the select committee on capital financing 23 and investments, the joint appropriations committee and the 2025 STATE OF WYOMING 25LSO-0323 13 HB0080 1 investment funds committee on the analysis conducted 2 pursuant to paragraph (d)(ii) of this section and W.S. 3 9-4-716(b)(ix) and (e). 4 5 9-4-716. State investment policy; investment 6 consultant. 7 8 (a) The board, in consultation with the investment 9 funds committee, shall adopt investment policy statements 10 for state funds and shall review those policy statements at 11 least annually. These policy statements shall be subject to 12 W.S. 9-4-722 and to the following: 13 14 Section 3. Nothing in this act shall be construed to 15 impair or otherwise modify any contract entered into before 16 July 1, 2025. 17 18 Section 4. This act is effective July 1, 2025. 19 20 (END)