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Wisconsin Legislature: AB767: Bill Text
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AB767: Bill Text
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2025 - 2026 LEGISLATURE
LRB-5600/1
ARG&MIM:skw&cdc
2025 ASSEMBLY BILL 767
December 17, 2025 - Introduced by Representatives
Nedweski
,
Behnke
,
Dittrich
,
Gundrum
,
Knodl
,
Maxey
,
Murphy
and
Wichgers
, cosponsored by Senators
Kapenga
,
Nass
and
Wanggaard
. Referred to Committee on State Affairs.
AB767,1,7
1
An Act
to renumber and amend
25.182;
to amend
25.15 (2) (intro.) and
2
25.187 (2) (a);
to create
25.182 (1), (3), (4), (5), (6) and (7), 25.187 (2) (c), Laws
3
of 1937, chapter 201, section 9A and Laws of
1937, chapter 39
6, section
9
A of
4
the statutes;
to affect
Laws of 1937, chapter 201, section 9 (1) and Laws of
5
1937, chapter 39
6, section
9 (1
);
relating to:
the management of assets of and
6
the voting of ownership interests in securities by the Wisconsin Retirement
7
System and the retirement systems of the City and County of Milwaukee.
Analysis by the Legislative Reference Bureau
This bill creates requirements and limitations applicable to the State of Wisconsin Investment Board (SWIB) in voting of its securities ownership interests for assets of the Wisconsin Retirement System (WRS) and the boards of the retirement systems of the City and County of Milwaukee in voting of their securities ownership interests for assets of their respective retirement systems.
Investment Board
Under current law, with limited exceptions, the standard of responsibility applied to SWIB when SWIB manages money and property is 1) to manage the money and property with the care, skill, prudence, and diligence under the circumstances of a prudent person acting in a similar capacity; 2) to diversify investments in order to minimize the risk of large losses; and 3) to administer assets of each trust or fund solely for the purpose of ensuring the fulfillment of the purpose of each trust or fund at a reasonable cost and not for any other purpose. SWIB manages WRS assets in the core retirement investment trust and variable retirement investment trust.
This bill requires SWIB, in managing WRS assets, to exercise its voting authority as to all shares held directly or indirectly by SWIB for the benefit of WRS participants and in the sole economic interest of WRS participants. The bill defines “sole economic interest” as investment with the objective of maximizing risk-adjusted investment returns of WRS participants over a time horizon consistent with the risk management profile for the WRS assets. There is a presumption that SWIB has complied with this duty with respect to a shareholder-sponsored proposal if SWIB votes consistently with the recommendation of the security issuer’s board of directors and a majority of the these directors are independent directors. A “shareholder-sponsored proposal” is defined as a proposal submitted to a security issuer by a shareholder under provisions of federal law. If SWIB votes in a manner inconsistent with the recommendation of the security issuer’s board of directors, SWIB is presumed to have complied with its duty if any of the following applies: 1) SWIB conducts and documents an economic analysis that satisfies certain requirements (discussed below) and that demonstrates that SWIB’s vote is in the sole economic interest of WRS participants; or 2) a third party conducts and documents such an economic analysis on behalf of SWIB and SWIB determines the economic analysis adequately demonstrates that SWIB’s vote is in the sole economic interest of WRS participants. SWIB may not vote in a manner that subordinates the economic interest of WRS participants to any environmental, social, policy, governance, or ideological goal. SWIB also may not vote in a manner that promotes any environmental, social, policy, governance, or ideological goal unless, based on an economic analysis, SWIB determines that the vote is in the sole economic interest of WRS participants.
The bill also governs SWIB’s use of proxy advisory firms, which are firms that engage in the business of providing proxy voting advice, research, analysis, ratings, or recommendations to securities owners or issuers. If SWIB engages the services of a proxy advisory firm to provide proxy voting advice with respect to shareholder-sponsored proposals, SWIB may not adopt a recommendation of the proxy advisory firm unless the proxy advisory firm bases its recommendation on the sole economic interest of WRS participants. There is a presumption that a proxy advisory firm's recommendation is based on the sole economic interest of WRS participants if the recommendation is consistent with the recommendation of the security issuer’s board of directors and a majority of these directors are independent directors. However, an exception allows SWIB to adopt a proxy advisory firm’s recommendation that is inconsistent with the recommendation of the issuer’s board of directors if the proxy advisory firm conducted and documented an economic analysis demonstrating that its recommendation is in the sole economic interest of WRS participants and provided this economic analysis to the board. This exception does not apply if the proxy advisory firm’s recommendation relates to a matter of executive compensation or a decision to pursue adjudication of a business dispute in court.
Under the bill, if SWIB engages the services of a proxy advisory firm to provide proxy voting advice with respect to a company-sponsored resolution relating to executive compensation requiring shareholder approval (say-on-pay proposal), SWIB may not adopt a recommendation of the proxy advisory firm that 1) undermines the use of discretion by an independent compensation committee of the issuer’s board of directors; 2) is based on prior shareholder support levels and not on the economic interest of participants; or 3) relies on assumptions or methodologies that are not consistent with generally accepted accounting principles.
The bill also prohibits SWIB from engaging the services of a proxy advisory firm to provide proxy voting advice if there is an actual or potential conflict of interest that could reasonably be expected to affect the objectivity or reliability of the proxy advisory firm’s advice.
Under the bill, if an economic analysis of a shareholder-sponsored proposal is necessary, the economic analysis must be in writing, include an analysis demonstrating the factors considered in evaluating the economic impact of the shareholder-sponsored proposal, and address specified factors. At least once every three years, SWIB must conduct backtesting of its economic analyses to determine how well its models, procedures, and processes perform in predicting the sole economic interest of WRS participants and must make adjustments as necessary to ensure the accuracy and integrity of its economic analyses.
Current law requires SWIB to report annually to the Department of Employee Trust Funds certain information regarding WRS assets. This bill requires SWIB to include within this report specified information related to shareholder-sponsored proposals, including certain information related to SWIB’s votes, its economic analyses, and proxy advisory firm recommendations. This information is subject to the open records law. SWIB must also include information in this report related to its backtesting of its economic analyses.
The bill provides that the attorney general, the state treasurer, and any district attorney may enforce the provisions of the bill, including by conducting investigations and bringing court actions for injunctive relief. The bill also allows a WRS participant to bring a civil action against SWIB to enforce the provisions of the bill. The WRS participant may seek injunctive relief and may recover actual damages, court costs, and reasonable attorney fees. An action may not be commenced more than three years after the date the WRS participant discovers or should have discovered the violation.
Under current law, SWIB annually assesses the funds it manages, including WRS assets, to cover SWIB’s expenses in managing these funds. SWIB must provide notice of each assessment and pays the assessment from the current income of the applicable fund. The bill requires SWIB to reduce its assessment against WRS assets if SWIB violates the provisions of the bill. The amount of the reduction for each violation is 5 percent of the increase in SWIB’s assessment in the prior two-year period.
Retirement funds of first-class cities and populous counties
Under current law, the board of a governmental retirement system in a county with a population of 500,000 or more (currently only Milwaukee County) must invest the funds of the system subject to all of the conditions, limitations, and restrictions imposed by law on SWIB in making and disposing of the investments of the Wisconsin retirement fund.
Also under current law, the board of a retirement system of a first-class city (currently only the City of Milwaukee) must invest the funds of the system subject to all of the conditions, limitations, and restrictions imposed by law on life insurance companies in this state.
Under the bill, the board of the retirement system of Milwaukee County and the board of the retirement system of the City of Milwaukee are required to follow all the same requirements described above for SWIB, including reporting to ETF. The bill also provides that the attorney general, the state treasurer, and the district attorney of Milwaukee County may enforce the provisions of the bill with respect to the retirement systems of the City and County of Milwaukee. The bill also allows a participant of the retirement system of Milwaukee County or the City of Milwaukee to bring a civil action against the board of the respective system to enforce the provisions of the bill. The participant may seek injunctive relief and may recover actual damages, court costs, and reasonable attorney fees. An action may not be commenced more than three years after the date the participant discovers or should have discovered the violation.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
AB767,1
1
Section
1
.
25.15 (2) (intro.) of the statutes is amended to read:
AB767,2,5
2
25.15
(2)
Standard of responsibility.
(intro.) Except as provided in s.
3
25.17 (2) and (3) (c),
and subject to s. 25.182 (3) and (4),
the standard of
4
responsibility applied to the board when it manages money and property shall be
5
all of the following:
AB767,2
1
Section
2
.
25.182 of the statutes is renumbered 25.182 (2) and amended to
2
read:
AB767,3,9
3
25.182
(2)
In addition to the management authority provided under any other
4
provision of law, and notwithstanding any limitation on the board’s management
5
authority provided under any other provision of law
except subs. (3) and (4)
, the
6
board shall have authority to manage the money and property of the core
7
retirement investment trust and, subject to s. 25.17 (5), the variable retirement
8
investment trust in any manner that does not violate the standard of responsibility
9
specified in s. 25.15 (2).
AB767,3
10
Section
3
.
25.182 (1), (3), (4), (5), (6) and (7) of the statutes are created to
11
read:
AB767,3,12
12
25.182
(1)
In this section:
AB767,3,13
13
(a) “Issuer” means an issuer of securities.
AB767,3,14
14
(b) “Participant” has the meaning given in s. 40.02 (45).
AB767,3,17
15
(c) “Proxy advisory firm” means a person that is engaged in the business of
16
providing proxy voting advice, research, analysis, ratings, or recommendations to a
17
person with an ownership interest in securities or to an issuer.
AB767,3,19
18
(d) “Say-on-pay proposal” means a resolution subject to shareholder vote to
19
approve the compensation of executives as required by
15 U.S.C. 78n-1
(a) (1).
AB767,3,21
20
(e) “Shareholder-sponsored proposal” means a proposal submitted to an issuer
21
by a shareholder under
17 CFR 240.14
a-8.
AB767,4,2
22
(f) “Sole economic interest” means investment with the objective of
23
maximizing risk-adjusted investment returns for participants over a time horizon
1
consistent with the risk management profile for the core retirement investment
2
trust and variable retirement investment trust.
AB767,4,6
3
(3)
(a) In managing the money and property of the core retirement investment
4
trust and the variable retirement investment trust, the board shall exercise its
5
voting authority as to all shares held directly or indirectly by the board for the
6
benefit of participants and in the sole economic interest of participants.
AB767,4,8
7
(b) With respect to a shareholder-sponsored proposal, there is a presumption
8
that the board has complied with par. (a) if all of the following apply:
AB767,4,10
9
1. The board votes consistently with the recommendation of the issuer’s board
10
of directors.
AB767,4,12
11
2. A majority of the directors on the issuer’s board of directors are
12
independent directors.
AB767,4,15
13
(c) With respect to a shareholder-sponsored proposal, if the board votes in a
14
manner inconsistent with the recommendation of the issuer’s board of directors, the
15
board is presumed to have complied with par. (a) if any of the following applies:
AB767,4,18
16
1. The board conducts and documents an economic analysis that satisfies the
17
requirements under sub. (5) and that demonstrates that the board’s vote is in the
18
sole economic interest of participants.
AB767,4,22
19
2. A 3rd party conducts and documents an economic analysis on behalf of the
20
board that satisfies the requirements under sub. (5) and that the board determines
21
adequately demonstrates the board’s vote is in the sole economic interest of
22
participants.
AB767,4,23
23
(d) The board may not vote in a manner that does any of the following:
AB767,5,2
1
1. Subordinates the economic interest of participants to any environmental,
2
social, policy, governance, or ideological goal.
AB767,5,6
3
2. Promotes any environmental, social, policy, governance, or ideological goal
4
unless, based on an economic analysis that satisfies the requirements under sub.
5
(5), the board determines that the vote is in the sole economic interest of
6
participants.
AB767,5,12
7
(4)
(a) Except as provided in par. (c), and subject to par. (e), if the board
8
engages the services of a proxy advisory firm to provide proxy voting advice with
9
respect to shareholder-sponsored proposals, the board may not adopt a
10
recommendation of the proxy advisory firm with respect to a shareholder-sponsored
11
proposal unless the proxy advisory firm bases its recommendation on the sole
12
economic interest of participants.
AB767,5,15
13
(b) With respect to a shareholder-sponsored proposal, there is a presumption
14
that a proxy advisory firm’s recommendation is based on the sole economic interest
15
of participants for purposes of par. (a) if all of the following apply:
AB767,5,17
16
1. The recommendation is consistent with the recommendation of the issuer’s
17
board of directors.
AB767,5,19
18
2. A majority of the directors on the issuer’s board of directors are
19
independent directors.
AB767,5,22
20
(c) The board may, with respect to a shareholder-sponsored proposal, adopt a
21
proxy advisory firm’s recommendation that is inconsistent with the
22
recommendation of the issuer’s board of directors if all of the following apply:
AB767,6,2
23
1. The proxy advisory firm conducted and documented an economic analysis
1
demonstrating that its recommendation is in the sole economic interest of
2
participants and provided this economic analysis to the board.
AB767,6,5
3
2. The proxy advisory firm’s recommendation does not relate, in whole or in
4
part, to a matter of executive compensation or a decision to pursue adjudication of a
5
business dispute in court.
AB767,6,9
6
(d) Subject to par. (e), if the board engages the services of a proxy advisory
7
firm to provide proxy voting advice with respect to a company-sponsored say-on-pay
8
proposal, the board may not, with respect to the proposal, adopt a recommendation
9
of the proxy advisory firm if any of the following applies:
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