Bill Text: IA SSB1056 | 2025-2026 | 91st General Assembly | Introduced
Bill Title: A bill for an act relating to actions regarding the economic interest of enterprise shareholders and participants in and beneficiaries of public pension benefit plans, and providing penalties.
Spectrum: Committee Bill
Status: (Introduced) 2025-01-28 - Subcommittee: Webster, Quirmbach, and Westrich. [SSB1056 Detail]
Download: Iowa-2025-SSB1056-Introduced.html
Senate
Study
Bill
1056
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
ATTORNEY
GENERAL
BILL)
A
BILL
FOR
An
Act
relating
to
actions
regarding
the
economic
interest
1
of
enterprise
shareholders
and
participants
in
and
2
beneficiaries
of
public
pension
benefit
plans,
and
providing
3
penalties.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
NEW
SECTION
.
12L.1
Definitions.
1
For
purposes
of
this
chapter:
2
1.
“Best
economic
interest”
means
investment
pursuant
to
the
3
objective
of
maximizing
risk-adjusted
investment
returns
of
the
4
participants
and
beneficiaries
of
a
pension
benefit
plan
over
a
5
time
horizon
consistent
with
the
risk
management
profile
of
the
6
plan.
7
2.
“Consumer”
means
a
person
who
is
a
resident
of
this
state
8
and
to
which
any
of
the
following
apply:
9
a.
The
person
has
an
interest
in
an
investment
company,
10
including
but
not
limited
to
mutual
funds
and
exchange-traded
11
funds,
registered
with
the
federal
securities
and
exchange
12
commission
that
directly
or
indirectly
owns
shares
of
an
13
enterprise
regulated
by
the
state.
14
b.
The
person
is
a
beneficiary
of
or
participant
in
a
15
pension
benefit
plan.
16
3.
“Economic
analysis”
means
a
written
analysis
17
demonstrating
the
factors
considered
in
evaluating
the
economic
18
impact
of
a
shareholder-sponsored
proposal.
At
a
minimum,
the
19
analysis
must
address
all
of
the
following
factors:
20
a.
The
subject
matter
of
the
shareholder-sponsored
proposal.
21
b.
An
evaluation
of
the
investment
company’s
stated
reasons
22
for
opposition
to
the
shareholder-sponsored
proposal.
23
c.
An
evaluation
of
whether
the
shareholder-sponsored
24
proposal
reflects
the
investment
objectives
and
risk
management
25
profile
of
the
pension
benefit
plan
in
which
the
participants
26
and
beneficiaries
are
invested.
27
d.
An
evaluation
of
the
economic
benefits
and
costs
of
28
implementing
the
proposal,
as
written,
over
a
time
horizon
that
29
reflects
the
investment
objectives
and
risk
management
profile
30
of
the
plan.
31
e.
The
quantifiable
impact
of
the
shareholder-sponsored
32
proposal,
as
written,
on
the
investment
returns
of
the
33
participants
and
beneficiaries
of
the
plan.
34
f.
An
explanation
of
modeling,
procedures,
or
processes
used
35
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to
complete
the
economic
analysis.
1
4.
“Fiduciary”
means
a
person
who,
with
respect
to
a
pension
2
benefit
plan,
does
any
of
the
following:
3
a.
Exercises
discretionary
authority
or
discretionary
4
control
with
respect
to
management
of
the
plan
or
exercises
5
authority
or
control
with
respect
to
acquisition,
management,
6
or
disposition
of
the
plan’s
assets.
7
b.
Renders
investment
advice
for
a
fee
or
other
8
compensation,
direct
or
indirect,
with
respect
to
moneys
or
9
other
assets
of
the
plan
or
has
authority
or
responsibility
to
10
do
so.
11
c.
Has
discretionary
authority
or
discretionary
12
responsibility
in
the
administration
of
the
plan.
13
5.
“Investment
company”
means
the
same
as
defined
in
15
14
U.S.C.
§80a-3.
15
6.
“Pension
benefit
plan”
or
“plan”
means
a
plan,
fund,
or
16
program
established,
maintained,
or
offered
by
a
public
entity,
17
including
but
not
limited
to
a
public
retirement
system
as
18
defined
in
section
97D.5,
if
by
its
terms
or
as
a
result
of
19
surrounding
circumstances
the
plan,
fund,
or
program
does
any
20
of
the
following:
21
a.
Provides
retirement
income
or
other
retirement
benefits
22
to
employees
or
former
employees.
23
b.
Results
in
a
deferral
of
income
by
employees
for
a
period
24
extending
to
the
termination
of
covered
employment
or
beyond.
25
7.
“Proxy
advisory
firm”
means
a
person
who
is
engaged
26
in
the
business
of
providing
proxy
voting
advice,
research,
27
analysis,
ratings,
or
recommendations
to
a
fiduciary,
28
shareholder,
or
investor,
including
institutional
investors.
29
8.
“Public
entity”
means
the
state,
political
subdivisions
30
of
the
state,
public
school
corporations,
and
all
public
31
officers,
boards,
commissions,
departments,
agencies,
and
32
authorities
empowered
by
law
to
enter
into
public
contracts
for
33
the
expenditure
of
public
funds,
including
the
state
board
of
34
regents
and
institutions
under
the
control
of
the
state
board
35
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of
regents.
1
9.
“Shareholder-sponsored
proposal”
means
a
proposal
2
submitted
to
an
issuer
of
securities
by
a
shareholder
under
17
3
C.F.R.
§240.14a-8.
4
Sec.
2.
NEW
SECTION
.
12L.2
Fiduciary
voting
5
responsibilities.
6
1.
A
fiduciary
shall
vote
all
shares
held
directly
7
or
indirectly
by,
subject
to,
or
on
behalf
of
a
pension
8
benefit
plan
for
the
benefit
of
the
plan’s
participants
and
9
beneficiaries
solely
in
the
best
economic
interest
of
the
plan
10
participants
and
beneficiaries.
11
2.
For
purposes
of
this
section,
with
respect
to
a
12
shareholder-sponsored
proposal,
there
is
a
rebuttable
13
presumption
that
a
fiduciary
votes
its
shares
solely
14
in
the
best
economic
interest
of
the
plan
participants
15
and
beneficiaries
if
the
fiduciary’s
vote
follows
the
16
recommendation
of
the
board
of
directors
of
the
issuer
of
the
17
shares,
as
long
as
the
board
includes
a
majority
of
independent
18
directors.
19
3.
With
respect
to
a
shareholder-sponsored
proposal,
20
a
fiduciary’s
vote
in
a
manner
inconsistent
with
the
21
recommendation
of
the
board
of
directors
of
the
issuer
of
the
22
shares
is
presumed
to
be
in
the
best
economic
interest
of
the
23
plan
participants
and
beneficiaries
if
any
of
the
following
24
criteria
are
met:
25
a.
The
fiduciary
conducts
and
documents
an
economic
analysis
26
demonstrating
that
such
a
vote
is
in
the
best
economic
interest
27
of
the
plan
participants
and
beneficiaries.
28
b.
On
behalf
of
the
fiduciary,
a
third
party
conducts
and
29
documents
an
economic
analysis
demonstrating
that
such
a
vote
30
is
in
the
best
economic
interest
of
the
plan
participants
31
and
beneficiaries,
and
the
fiduciary
determines
that
the
32
economic
analysis
adequately
demonstrates
that
such
a
vote
is
33
in
the
best
economic
interest
of
the
plan
participants
and
34
beneficiaries.
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4.
A
fiduciary
shall
not
vote
in
a
manner
that
does
any
of
1
the
following:
2
a.
Subordinates
the
economic
interest
of
the
plan’s
3
participants
and
beneficiaries
to
any
environmental,
social,
4
policy,
governance,
or
ideological
goal.
5
b.
Promotes
any
environmental,
social,
policy,
governance,
6
or
ideological
goal,
unless,
based
on
an
economic
analysis,
it
7
is
determined
that
the
vote
is
in
the
best
economic
interest
of
8
the
plan
participants
and
beneficiaries.
9
5.
With
respect
to
shareholder-sponsored
proposals,
a
10
fiduciary
shall
annually
disclose
in
a
report
to
the
treasurer
11
of
state
all
of
the
following:
12
a.
Each
vote
that
was
inconsistent
with
the
recommendation
13
of
an
issuer’s
board
of
directors
composed
of
a
majority
of
14
independent
directors.
15
b.
The
economic
analysis
conducted
and
documented
with
16
respect
to
each
vote
described
in
subsection
3
to
determine
17
that
the
vote
was
in
the
best
economic
interest
of
the
plan’s
18
participants
and
beneficiaries.
19
6.
The
report
required
under
subsection
5
must
be
certified
20
by
the
chief
executive
officer
and
chief
financial
officer,
or
21
an
individual
acting
in
each
capacity,
of
the
fiduciary.
22
7.
At
least
once
every
three
years,
a
fiduciary
shall
23
back
test
its
economic
analysis
to
ensure
that
the
models,
24
procedures,
and
processes
it
uses
predict
the
best
economic
25
interest
of
the
plan’s
participants
and
beneficiaries,
and
26
shall
deliver
a
report
detailing
such
back
testing
to
the
27
treasurer
of
state.
Based
on
such
back
testing,
the
chief
28
executive
officer
and
chief
financial
officer,
or
an
individual
29
acting
in
each
capacity,
of
the
fiduciary
shall
certify
that
30
the
economic
analysis
performed
by
the
fiduciary
and
included
31
in
the
report
is
effective.
32
8.
The
court
may
award
court
costs
and
reasonable
attorney
33
fees
to
a
party
who
prevails
in
an
action
brought
under
this
34
section.
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Sec.
3.
NEW
SECTION
.
12L.3
Proxy
advisory
firms.
1
1.
A
proxy
advisory
firm
shall
not
provide
proxy
voting
2
advice
with
respect
to
shareholder-sponsored
proposals
3
submitted
to
any
enterprise
that
the
state
regulates,
unless
4
the
proxy
advisory
firm
bases
its
voting
recommendations
5
solely
on
the
best
economic
interests
of
the
enterprise’s
6
shareholders.
7
2.
For
purposes
of
this
section,
with
respect
to
a
8
shareholder-sponsored
proposal
submitted
to
an
enterprise
9
regulated
by
the
state,
there
is
a
presumption
that
a
proxy
10
advisory
firm’s
voting
recommendation
is
based
solely
on
the
11
best
economic
interest
of
the
enterprise’s
shareholders
if
12
the
recommendation
follows
the
recommendation
of
the
board
of
13
directors
of
the
issuer
of
the
shares,
as
long
as
the
board
14
includes
a
majority
of
independent
directors.
15
3.
With
respect
to
a
shareholder-sponsored
proposal
16
submitted
to
an
enterprise
regulated
by
the
state,
a
proxy
17
advisory
firm
may
recommend
a
vote
that
is
inconsistent
with
18
the
recommendation
of
the
board
of
directors
of
the
issuer
of
19
the
shares
if
the
proxy
advisory
firm
conducts
and
documents
an
20
economic
analysis
demonstrating
that
such
a
vote
is
in
the
best
21
economic
interest
of
the
enterprise’s
shareholders.
22
4.
With
respect
to
shareholder-sponsored
proposals
23
submitted
to
an
enterprise
regulated
by
the
state,
a
proxy
24
advisory
firm
shall
annually
disclose
in
a
report
to
the
25
treasurer
of
state
all
of
the
following:
26
a.
Each
vote
recommendation
that
was
inconsistent
with
the
27
recommendation
of
an
issuer’s
board
of
directors
composed
of
a
28
majority
of
independent
directors.
29
b.
The
economic
analysis
conducted
and
documented
with
30
respect
to
each
vote
recommendation
described
in
subsection
31
3
to
determine
that
the
vote
recommendation
was
in
the
best
32
economic
interest
of
the
regulated
enterprise’s
shareholders.
33
Sec.
4.
NEW
SECTION
.
12L.4
Consumer
right
to
disclosure.
34
1.
a.
If
a
consumer
has
reason
to
believe
that
the
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requirements
of
section
12L.2
or
12L.3
have
not
been
met,
a
1
consumer
may
submit
a
request
to
any
of
the
following
to
obtain
2
a
copy
of
the
documented
economic
analysis
demonstrating
that
3
such
a
vote
is
solely
in
the
best
economic
interest
of
the
4
consumer:
5
(1)
The
investment
company
that
owns
shares
of
an
enterprise
6
regulated
by
the
state.
7
(2)
The
pension
benefit
plan,
in
each
case,
in
which
the
8
consumer
is
an
investor,
beneficiary,
or
participant.
9
b.
There
is
a
presumption
that
a
vote
is
solely
in
the
10
best
economic
interest
of
the
consumer
if
the
vote
follows
the
11
recommendation
of
the
board
of
directors
of
the
issuer
of
the
12
shares,
as
long
as
the
board
includes
a
majority
of
independent
13
directors.
14
2.
a.
The
investment
company
or
plan
shall
respond
in
15
writing
to
the
consumer
within
ninety
days
of
receipt
of
16
a
request
described
in
subsection
1
by
doing
one
of
the
17
following:
18
(1)
Providing
the
consumer
with
the
requested
economic
19
analysis.
20
(2)
Informing
the
consumer
that
no
economic
analysis
is
21
available,
if
the
investment
company
did
not
conduct
and
22
document
an
economic
analysis.
23
(3)
Informing
the
consumer
that
the
vote
at
issue
was
24
consistent
with
the
recommendation
of
the
board
of
directors
25
of
the
issuer
of
the
shares
and
such
board
is
composed
of
a
26
majority
of
independent
directors.
27
b.
The
investment
company
or
plan
shall
provide
information
28
in
response
to
a
consumer
request
at
no
cost
up
to
twice
29
annually
per
consumer.
30
Sec.
5.
NEW
SECTION
.
12L.5
Enforcement.
31
1.
This
chapter
may
be
enforced
by
the
attorney
general.
32
2.
If
the
attorney
general
has
reasonable
cause
to
believe
33
that
a
person
has
engaged
in,
is
engaging
in,
or
is
about
to
34
engage
in
a
violation
of
this
chapter,
the
attorney
general
may
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do
any
of
the
following:
1
a.
Require
the
person
to
file
on
forms
prescribed
by
the
2
attorney
general
a
statement
or
report
in
writing,
under
oath,
3
as
to
all
the
circumstances
surrounding
the
actual,
alleged,
or
4
potential
violation
and
such
other
data
and
information
as
the
5
attorney
general
deems
necessary.
6
b.
Examine
under
oath
any
person
in
connection
with
the
7
actual,
alleged,
or
potential
violation.
8
c.
Examine
any
record,
book,
document,
account,
or
paper
as
9
the
attorney
general
deems
necessary.
10
d.
Issue
civil
investigatory
demands
consistent
with
11
investigation
into
a
potential
enforcement
action.
12
e.
Under
an
order
of
the
district
court,
impound
any
record,
13
book,
document,
account,
paper,
or
sample
or
material
relating
14
to
the
actual,
alleged,
or
potential
violation
and
retain
the
15
same
in
the
attorney
general’s
possession
until
the
completion
16
of
all
proceedings
undertaken
under
this
chapter
or
in
court.
17
3.
The
attorney
general
may
initiate
an
action
in
the
18
name
of
the
state
and
may
seek
an
injunction
to
restrain
19
any
violations
of
this
chapter.
A
violation
of
this
chapter
20
shall
constitute
irreparable
harm.
Each
share
voted
by
a
21
fiduciary
that
is
not
voted
in
the
best
economic
interest
of
22
the
shareholder
constitutes
a
separate
violation.
The
attorney
23
general
may
also
seek
civil
penalties
for
each
violation
under
24
this
chapter.
All
civil
penalties
issued
shall
be
in
equity.
25
Civil
penalties
shall
not
exceed
one
thousand
dollars
per
26
violation.
Civil
penalties
collected
under
this
chapter
shall
27
be
deposited
in
the
general
fund
of
the
state.
28
Sec.
6.
Section
97A.7,
subsection
1,
Code
2025,
is
amended
29
to
read
as
follows:
30
1.
The
board
of
trustees
shall
be
the
trustees
of
the
31
retirement
fund
created
by
this
chapter
as
provided
in
section
32
97A.8
and
shall
have
full
power
to
invest
and
reinvest
funds
33
subject
to
the
terms,
conditions,
limitations,
and
restrictions
34
imposed
by
subsection
2
and
chapters
12F
,
12H
,
12J
,
and
12K
,
35
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_____
H.F.
_____
and
12L
and
subject
to
like
terms,
conditions,
limitations,
1
and
restrictions
said
trustees
shall
have
full
power
to
hold,
2
purchase,
sell,
assign,
transfer,
or
dispose
of
any
of
the
3
securities
and
investments
of
the
retirement
fund
which
have
4
been
invested,
as
well
as
of
the
proceeds
of
said
investments
5
and
any
moneys
belonging
to
the
retirement
fund.
The
board
6
of
trustees
may
authorize
the
treasurer
of
state
to
exercise
7
any
of
the
duties
of
this
section
.
When
so
authorized
the
8
treasurer
of
state
shall
report
any
transactions
to
the
board
9
of
trustees
at
its
next
monthly
meeting.
10
Sec.
7.
Section
97B.4,
subsection
5,
Code
2025,
is
amended
11
to
read
as
follows:
12
5.
Investments.
The
system,
through
the
chief
investment
13
officer,
shall
invest,
subject
to
chapters
12F
,
12H
,
12J
,
and
14
12K
,
and
12L
and
in
accordance
with
the
investment
policy
and
15
goal
statement
established
by
the
board,
the
portion
of
the
16
retirement
fund
which,
in
the
judgment
of
the
system,
is
not
17
needed
for
current
payment
of
benefits
under
this
chapter
18
subject
to
the
requirements
of
section
97B.7A
.
19
Sec.
8.
Section
97B.7A,
subsection
1,
Code
2025,
is
amended
20
by
adding
the
following
new
paragraph:
21
NEW
PARAGRAPH
.
d.
Prioritize
the
best
economic
interest
of
22
the
system’s
participants
and
beneficiaries
in
accordance
with
23
chapter
12L.
24
Sec.
9.
Section
262.14,
unnumbered
paragraph
1,
Code
2025,
25
is
amended
to
read
as
follows:
26
The
board
may
invest
funds
belonging
to
the
institutions,
27
subject
to
chapters
12F
,
12H
,
12J
,
and
12K
,
and
12L
and
the
28
following
regulations:
29
EXPLANATION
30
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
31
the
explanation’s
substance
by
the
members
of
the
general
assembly.
32
This
bill
requires
a
fiduciary
to
vote
all
shares
of
a
33
pension
benefit
plan
established,
maintained,
or
offered
by
34
a
public
entity
solely
in
the
best
economic
interest
of
the
35
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H.F.
_____
plan
participants
and
beneficiaries.
The
bill
creates
the
1
rebuttable
presumption
that,
if
a
fiduciary’s
vote
aligns
with
2
the
recommendation
of
the
board
of
directors
of
the
issuer
3
of
the
shares
or
if
the
fiduciary
or
a
third
party
conducts
4
and
documents
an
economic
analysis
showing
that
the
vote
is
5
in
the
best
economic
interest
of
the
plan
participants
and
6
beneficiaries,
the
vote
is
in
the
best
interest
of
the
plan
7
participants
and
beneficiaries.
The
bill
prohibits
a
fiduciary
8
from
voting
shares
of
a
plan
based
on
any
environmental,
9
social,
policy,
governance,
or
ideological
goal
that
is
10
not
in
the
best
economic
interest
of
plan
participants
and
11
beneficiaries.
12
The
bill
requires
a
fiduciary
to
annually
report
to
13
the
treasurer
of
state
any
vote
inconsistent
with
the
14
recommendation
of
an
issuer’s
board
of
directors
and
the
15
economic
analysis
on
which
the
fiduciary
relied.
This
report
16
must
be
certified
by
the
fiduciary’s
chief
executive
officer
17
and
chief
financial
officer.
18
The
bill
also
requires
a
fiduciary
to
review
its
economic
19
analysis
every
three
years
to
ensure
that
the
fiduciary’s
20
models,
procedures,
and
processes
predict
the
best
economic
21
interest
of
the
plan
participants
and
beneficiaries.
22
The
bill
permits
a
court
to
award
court
costs
and
reasonable
23
attorney
fees
to
the
prevailing
party
in
a
suit
concerning
24
fiduciary
voting
responsibilities
under
the
bill.
25
The
bill
prohibits
a
proxy
advisory
firm
from
providing
26
proxy
voting
advice
regarding
shareholder-sponsored
proposals
27
to
an
entity
that
the
state
regulates
unless
the
advice
is
28
based
solely
on
the
best
economic
interests
of
the
enterprise’s
29
shareholders.
If
a
proxy
advisory
firm’s
advice
follows
the
30
recommendation
of
the
board
of
directors
of
the
issuer
of
the
31
shares
or
if
the
proxy
advisory
firm
conducts
and
documents
an
32
economic
analysis
demonstrating
that
the
vote
is
in
the
best
33
economic
interest
of
the
plan
participants
and
beneficiaries,
34
then
the
advice
is
presumed
to
be
based
solely
on
the
best
35
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H.F.
_____
economic
interest
of
the
enterprise’s
shareholders.
A
proxy
1
advisory
firm
must
submit
an
annual
report
to
the
treasurer
of
2
state
disclosing
any
vote
inconsistent
with
the
issuer’s
board
3
of
directors’
recommendations
and
the
economic
analysis
on
4
which
the
proxy
advisory
firm
relied.
5
The
bill
permits
an
investor,
beneficiary,
or
participant
of
6
a
plan
to
submit
a
request
for
the
economic
analysis
conducted
7
for
a
fiduciary’s
vote
to
the
investment
company
that
owns
8
shares
of
an
enterprise
regulated
by
the
state
or
the
plan
if
9
the
individual
has
reason
to
believe
the
provisions
of
the
bill
10
have
not
been
met.
The
investment
company
or
plan
must
respond
11
in
writing
within
90
days
by
providing
the
requested
economic
12
analysis
or
informing
the
individual
that
no
economic
analysis
13
was
conducted
or
the
vote
aligned
with
the
recommendation
14
of
the
board
of
directors
of
the
issuer
of
the
shares.
The
15
investment
company
or
plan
must
provide
such
a
response
without
16
cost
up
to
twice
annually
per
consumer.
17
The
bill
allows
the
attorney
general
to
investigate
any
18
suspected
violations
of
the
bill
and
to
enforce
the
bill’s
19
provisions
by
initiating
an
action
in
the
name
of
the
state
20
and
seeking
civil
penalties
for
each
violation.
Each
share
21
not
voted
in
the
best
economic
interest
of
the
shareholder
22
qualifies
as
a
separate
violation
and
constitutes
irreparable
23
harm.
The
bill
requires
civil
penalties
to
be
in
equity
and
24
to
not
exceed
$1,000
per
violation.
Civil
penalties
collected
25
under
the
bill
are
deposited
in
the
general
fund
of
the
state.
26
The
bill
makes
conforming
changes.
27
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