SB 679 — NC Public Finance Protection Act.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA AprSESSION 6, 2023 S.B.S 1 SENATE BILL 679 Short Title:

679 SESSION 2023 PRINCIPAL CLERK S D SENATE BILL DRS15296-NJfp-59 Short Title:

Rules and Operations of the Senate April 10, 2023 A BILL TO BE ENTITLED AN ACT PROVIDING FIDUCIARY STANDARDS OF CARE, DELEGATION OF AUTHORITY, AUTHORITY FOR VOTING ON SHARES, AND PROXY VOTING REQUIREMENTS, PROHIBITING CONSIDERATION OF NON-PECUNIARY FACTORS, AND AUTHORIZING THE ATTORNEY GENERAL TO ENFORCE THIS ACT.

*DRS15296-NJfp-59**S679-v-1* General Assembly Of North Carolina Session 2023 b.

A fiduciary purposemaypurposemaybereasonablydeterminedbyevidence,including, bereasonably determinedby evidence,including, but not limited to, a fiduciary's statements indicating its purpose in selecting investments, engaging with portfolio companies, or voting shares or proxies, or any such statements by any coalition, initiative, or organization that the fiduciary has joined, participated in, or become a signatory to in its capacity as a fiduciary.

The weight given to those factors should solelysolelyreflect reflect a prudent assessment of their impact on risk and return.

Page 2 DRS15296-NJfp-59Senate Bill 679-First Edition General Assembly Of North Carolina Session 2023 Any pecuniary consideration of environmental, social, or governance factors must necessarily include evaluating whether greater returns can be achieved through investments that rank poorly on such factors.

(d) Unless no economically practicable alternative is available, a fiduciaryfiduciarymay may not adopt a practice of following the recommendations of a proxy advisory firm or other service provider unless such firm or service provider has a practice of, and in writing commits to, following proxy votingvotingguidelinesthat guidelinesthat are consistent with thefiduciary's obligationto act based onlyonlyonpecuniary on pecuniary factors.

As such, all current proxy voting authorityauthoritywith with respect to anyanyand and all shares held directlydirectlyor orindirectlybyor indirectly by or on behalf of a pension benefit plan or the plan participants is hereby revoked.

With respect to the pension benefit plans, all such voting authority shall reside with the respective Board of Trustees, except that the Board of Trustees maymaydelegate delegate such authorityauthorityto to a personwhoperson who has a practice of, and in writing commits to, following guidelines that match the plan's obligation to act based only on pecuniary factors.

(1) Require such person to file on such forms as he or she prescribes a statement or report in writing, under oath, as to all the facts and circumstances concerningthe violation,andsuchotherviolation,andsuchotherdataandinformation dataandinformation as heor shemay deem necessary.

DRS15296-NJfp-59Senate Bill 679-First Edition Page 3