SB 1503 — public pensions; proxy voting

SenateHouse Engrossed Senate Bill public pensions;

proxy voting State(now: of Arizona Senate Fifty-seventh Legislature Second Regular Session SENATE BILL 1503 AN ACT AMENDING TITLE 38, ARIZONA REVISED STATUTES, BY ADDING CHAPTER 6.1;

RELATINGfirst TOresponders; PENSION BENEFIT PLANS.

(TEXTstate OFdeath benefit) State of Arizona Senate Fifty-seventh Legislature Second Regular Session CHAPTER 64 SENATE BILL BEGINS1503 ONAN NEXTACT PAGE)AMENDING -SECTION i38-1171, -ARIZONA S.B.REVISED STATUTES;

RELATING TO CIVILIAN REVIEW BOARDS.

(TEXT OF BILL BEGINS ON NEXT PAGE - i - S.B.

TitleSubject 38,to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 38-1171, Arizona Revised Statutes, is amended by adding chapter 6.1, to read:

CHAPTER38-1171. 6.1 FIDUCIARY DUTIES AND PROXY VOTING ARTICLE 1.

GENERALDefinitions PROVISIONSIn 38-971.this article, unless the context otherwise requires:

Definitions IN THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQUIRES:

"PLAN""First MEANSresponder": A PLAN, FUND OR PROGRAM THAT IS ESTABLISHED, MAINTAINED OR OFFERED BY A PUBLIC ENTITY, INCLUDING A PUBLIC RETIREMENT SYSTEM, IF BY ITS TERMS OR AS A RESULT OF SURROUNDING CIRCUMSTANCES THE PLAN, FUND OR PROGRAM DOES ANY OF THE FOLLOWING:

(a) PROVIDESHas RETIREMENTthe INCOMEsame ORmeaning OTHERprescribed RETIREMENTin BENEFITSsection TO13-1204. EMPLOYEES OR FORMER EMPLOYEES.

(b) RESULTSIncludes INALL A DEFERRAL OF INCOME BY EMPLOYEES FOR A PERIOD EXTENDING TO THE TERMINATIONFOLLOWING: OF COVERED EMPLOYMENT OR BEYOND.

(i) A member of the Arizona national guard who is on state active duty in this state and a correctional officer who is employed by the state department of corrections.

(ii) A PILOT WHO IS EMPLOYED BY A LAW ENFORCEMENT AGENCY.

"PROXY"Killed ADVISORYin FIRM"the MEANSline Aof PERSONduty" WHOmeans ISkilled ENGAGEDas INthe THEresult BUSINESSof OFanother PROVIDINGperson's PROXYcriminal VOTINGact ADVICE,while RESEARCH,in ANALYSIS,the RATINGSperformance ORof RECOMMENDATIONSthe TOfirst Aresponder's FIDUCIARYofficial ORduties. PROVIDING PROXY VOTING ADVICE, RESEARCH, ANALYSIS, RATINGS OR RECOMMENDATIONS RELATING TO AN ISSUER OF SECURITIES.

Sec.

2.

Retroactivity This act applies retroactively to from and after December 31, 2025.

Sec.

"SOLERequirements ECONOMICfor INTEREST"enactment; MEANS THE MAXIMIZATION OF RISK-ADJUSTED INVESTMENT RETURNS OF THE PARTICIPANTS AND BENEFICIARIES OF A PENSION BENEFIT PLAN OVER A TIME PERIOD CONSISTENT WITH THE RISK MANAGEMENT PROFILE OF THE PLAN.

38-975.three-fourths vote Pursuant to article IV, part 1, section 1, Constitution of Arizona, section 38-1171, Arizona Revised Statutes, as amended by this act, is effective only on the affirmative vote of at least three-fourths of the members of each house of the legislature.

Prohibition;Sec.

proxy4. advisory firms;

votingEmergency AThis PLANact MAYis NOTan ENTERemergency INTOmeasure ANthat AGREEMENTis WITHnecessary Ato PROXYpreserve ADVISORYthe FIRMpublic WITHpeace, RESPECThealth TOor THEsafety PROVISIONand OFis PROXYoperative ADVISORYimmediately SERVICESas UNLESSprovided THEby PROXYlaw. ADVISORY FIRM ACKNOWLEDGES IN WRITING AND ACCEPTS UNDER CONTRACT ITS OBLIGATIONS TO VOTE ALL SHARES IN THE SOLE ECONOMIC INTEREST OF THE PLAN'S PARTICIPANTS AND BENEFICIARIES AS OUTLINED BY THE PLAN.

APPROVED BY THE GOVERNOR APRIL 15, 2026.

FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 15, 2026.