20190. The board has exclusive control of the investment of the
retirement fund. Except as otherwise restricted by the California
Constitution and by law, the board may, in its discretion, invest the
assets of the fund through the purchase, holding, or sale thereof of
any investment, financial instrument, or financial transaction when
the investment, financial instrument, or financial transaction is
prudent in the informed opinion of the board.
20191. The board may itself make any investment authorized by law
or sell any security, obligation, or real property in which moneys in
the retirement fund are invested, by affirmative vote of at least
seven members of the board, or by the same affirmative vote may from
time to time adopt an investment resolution that shall contain
detailed guidelines by which to designate those securities and real
property that are acceptable for purchase. While the resolution is in
effect, securities and real property may be purchased for investment
by an officer or employee of the board designated by it for that
purpose, and sales of securities may be consummated by the officer or
employee under the conditions prescribed. Purchases and sales of
securities shall be reported to the board, on a monthly basis, at its
next regular meeting.
20191.5. (a) All investment transaction decisions made during a
closed session pursuant to paragraph (16) of subdivision (c) of
Section 11126 shall be by rollcall vote entered into the minutes of
that meeting.
(b) The board, within 12 months of the close of an investment
transaction or the transfer of system assets for an investment
transaction, whichever occurs first, shall disclose and report the
investment at a public meeting.
20192. In addition to the other investments authorized by this
article, the board may invest in real estate and leases thereof and
improvements thereon for business or residential purposes as an
investment for the production of income.
20193. The board may invest the money in the retirement fund in
real property or improvements thereon or to be constructed thereon
when the real property or improvements are acquired or to be made by
or for sale or lease to the state or a public agency. The board may
acquire the real property under Part 11 (commencing with Section
15850) of Division 3. Title to real property acquired by or on behalf
of the board pursuant to this section or under Part 11 (commencing
with Section 15850) of Division 3 shall be vested in the board. The
Director of General Services on behalf of the state may hire or lease
as lessee real property or improvements acquired pursuant to this
section for lease to the state. The lease may contain an option or
options to purchase the property, or a provision that title to the
property shall vest in the state at the expiration of the term, and
the Director of General Services is authorized to acquire the
property. The board also may invest money in any valid special
obligations of the state or a public agency or an agency of either
issued to finance a public building and secured solely by the
building or revenues, rentals or receipts received from operation of
the building. This section shall not be construed as authorization to
acquire any real property or improvements thereon or to issue any
obligation to finance the acquisition on behalf of the state unless
that acquisition is authorized by a separate act or appropriation
enacted by the Legislature.
20194. (a) Notwithstanding any other provision of law, the board
shall give first priority to investing not less than 25 percent of
all funds which become available in a fiscal year for new
investments, in the following:
(1) Obligations secured by a lien or charge solely on residential
realty, including rental housing, located in the state and on the
security of which, commercial banks are permitted to make loans
pursuant to Article 2 (commencing with Section 1220) of Chapter 10 of
Division 1 of the Financial Code.
(2) Securities representing a beneficial interest in a pool of
obligations secured by a lien or charge solely on residential realty
located in the state.
(3) Certificates of deposit issued by savings and loan
associations, if the savings and loan associations agree to make
loans, or to fund tax-exempt notes or bonds issued by housing
authorities, cities, or counties, on residential realty located in
the state, including rental housing, in an amount equal to the amount
of the deposit.
(b) Funds subject to investment pursuant to this section include
all moneys received as employer and member contributions, investment
income, and the proceeds from all net gains and losses from
securities, reduced by the amount of benefit payments and withdrawals
occurring during the fiscal year. In computing the amount of
investment pursuant to this section, a dollar-for-dollar credit shall
be given for residential realty investments described in this
section that are contractually agreed to be made by a financial
institution from which the board, in consideration thereof, purchases
other investments. In computing the amount of investment pursuant to
this section, the board may elect to include the dollar amount of
commitments to purchase mortgages from public revenue bond programs
in the year the commitment is given. However, that election may not
exceed one-fifth of the total guideline amount.
(c) Nothing in this section shall be construed to require the
acquisition of any instrument or security at less than the market
rate.
(d) If the board determines during any fiscal year that compliance
with this section will result in lower overall earnings for the fund
than obtainable from alternative investment opportunities that would
provide equal or superior security, including guarantee of yield,
the board may substitute those higher yielding investments, to the
extent actually available for acquisition, for the investments
otherwise specified by this section. Additionally, if, and to the
extent that, adherence to the diversification guideline specified in
this section would conflict with its fiduciary obligations in
violation of Section 9 of Article I of the California Constitution or
Section 10 of Article I of the United States Constitution, or would
conflict with the standard for prudent investment of the fund set
forth in Section 17 of Article XVI of the California Constitution,
the board may substitute alternative investments. In that case, the
board shall estimate the amount of funds available for investment in
substitute alternative investments and the amount of funds invested
pursuant to the first paragraph of this section and shall submit its
resolution of findings and determinations, together with a
description of the type, quantity, and yield of the investments
substituted, to the Governor and to the Joint Committee on
Legislative Audit within 20 days following the conclusion of the
fiscal year. Within 30 days thereafter, the Joint Committee on
Legislative Audit shall transmit the State Auditor's report to the
Speaker of the Assembly and to the Senate Committee on Rules for
transmittal to affected policy committees.
(e) The board, upon determining the final amount of funds
available for investment in substitute alternative investments and
the estimated amount of funds invested pursuant to the first
paragraph of this section, shall submit that information to the
Governor and the Joint Committee on Legislative Audit. Thereafter,
the Joint Committee on Legislative Audit shall transmit the report of
the State Auditor to the Speaker of the Assembly and the Senate
Committee on Rules for transmittal to the affected policy committees.
20194.5. In addition to the other investments authorized by this
article, the board may invest in Property Assessed Clean Energy
(PACE) bonds, as defined in Section 26104 of the Public Resources
Code.
20195. (a) The board may select, purchase, or acquire in the name
of the system, the fee or any lesser interest in real property,
improved or unimproved, and may construct or remodel, and equip, an
office building, including appropriate satellite structures, in the
County of Sacramento, California, for its use and for the use of
other state retirement systems excepting the State Teachers'
Retirement System, other departments, boards, and agencies of the
state, or appropriate private commercial entities as space may be
available from time to time. The office building and satellite
structures shall conform to the Capital Master Plan if located within
an area subject to the plan.
(b) The board may select, purchase, or acquire in the name of the
system, the fee or any lesser interest in real property, improved or
unimproved, and may construct or remodel, and equip, business
recovery centers in California for use by the system as an alternate
facility, emergency operations center, or data center that the board
determines is appropriate for disaster preparedness.
(c) If the board acquires bare land, improvements shall be
constructed according to plans approved by the State Public Works
Board and Department of General Services.
(d) If the board acquires land with improvements thereon, the
improvements shall be remodeled or completed in accordance with plans
approved by the State Public Works Board and Department of General
Services.
(e) If condemnation of the property selected is necessary, the
board may elect to deposit the funds deemed necessary with the
Treasurer. The funds are appropriated for purchase of the selected
property subject to the Property Acquisition Law.
(f) Work on all projects shall be done under contract awarded to
the lowest responsible bidder pursuant to bidding procedures set
forth in Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code.
20196. The board may contract with the Department of General
Services or any other state department for assistance and supervision
in the acquisition of real property and the construction thereon of
buildings and improvements authorized in this article.
20197. All buildings and improvements constructed by the board
under this article may contain space in excess of the immediate
requirements of the board that, until needed, may be leased by the
board upon those terms and conditions as may be approved by the
board.
The board may contract with the Department of General Services to
handle the rentals of any excess space over and above that required
by the board and to furnish general supervision and maintenance of
buildings and improvements constructed under the provisions of this
article.
20198. Any building or improvement constructed by the board under
this article shall be subject to the supervision of the board in
accordance with rules and regulations established by the board with
the assistance of the Department of General Services.
20199. The board shall establish a building account for the
transfer of money that is continuously appropriated for that purpose
from the retirement fund for the cost of the acquisition of real
property, the construction or remodeling of buildings and
improvements thereon, and the maintenance, repair, and improvement
thereof.
For accounting purposes the board shall pay to the building
account an amount sufficient to repay all costs for construction and
maintenance of space used by the board. Other amounts or
contributions received shall be deposited in the building account and
disbursed as provided in this section.
The board may contract with the Department of General Services for
the purchase of insurance against loss of, or damage to, the
property or the loss of use or occupancy of the building, liability
insurance and other insurance as is customarily carried on state
office buildings. Premiums for the insurance shall be paid from the
building account.
Money in the building account that is in excess of current needs
shall be paid into the retirement fund monthly. The land, building,
equipment, and improvements thereon, shall constitute an asset in the
retirement fund and shall be carried on the books thereof as such in
accordance with generally accepted accounting practices.
20200. (a) Notwithstanding any other provision of law, the board
may establish a program utilizing the retirement fund to assist
system members, through financing, to obtain homes throughout the
United States.
(b) For the purpose of this section, the term "member" means any
person who is receiving, or is entitled to receive, a retirement
allowance funded by this system, the Legislators' Retirement System,
the Judges' Retirement System, or the Judges' Retirement System II,
notwithstanding any vesting requirement and without regard to present
eligibility to retire.
(c) The board shall adopt regulations governing the program that
shall, among other things, provide:
(1) That home loans be made available to members for the purchase
of single-family dwellings, two-family dwellings, three-family
dwellings, four-family dwellings, single-family cooperative
apartments, and single-family condominiums.
(2) That private lending institutions throughout the United States
shall originate and service its home loans pursuant to agreements
entered into between those institutions and the board.
(3) That the recipients of the loans occupy the homes as their
permanent residences in accord with rules and regulations established
by the board.
(4) That its home loans shall be available only for the purchase
or refinancing of homes throughout the United States and that under
no condition shall a member have more than one outstanding loan.
(5) That the amount and length of the loans shall be pursuant to a
schedule periodically established by the board that shall provide a
loan-to-value ratio of no greater than the following:
(A) One hundred percent for the first loan for a single-family
dwelling, single-family cooperative apartment, or single-family
condominium.
(B) Ninety-five percent for the first loan on a two-family
dwelling.
(C) Ninety percent for the first loan on a three-family dwelling
or four-family dwelling.
The portion of any loan exceeding 80 percent of value shall be
insured by an admitted mortgage guaranty insurer conforming to
Chapter 2A (commencing with Section 12640.01) of Part 6 of Division 2
of the Insurance Code, in an amount so that the unguaranteed portion
of the loan does not exceed 75 percent of the market value of the
property together with improvements thereon.
(6) That there may be prepayment penalties assessed on its loans
in accordance with rules and regulations established by the board.
(7) That the criteria and terms for its loans shall provide the
greatest benefit to members consistent with the financial integrity
of the program and the sound investment of the retirement fund.
(8) Any other terms and conditions as the board shall deem
appropriate.
(d) This section shall be known as, and may be cited as, the Dave
Elder Public Employees' Retirement System Member Home Loan Program
Act.
20201. (a) It is the intent of the Legislature that the provisions
of this section be available to assist members in obtaining homes
throughout the United States. The Legislature intends that home loans
made pursuant to Section 20200 and this section shall be secured
primarily by the property acquired except as authorized pursuant to
paragraph (1) of subdivision (b) and shall not exceed the fair market
value of the property acquired.
(b) The board shall include in any program established pursuant to
Section 20200 a procedure whereby a member may obtain 100-percent
financing for the purchase of a single-family dwelling unit in
accordance with the following criteria:
(1) The member shall obtain one loan with a loan-to-value ratio
not to exceed 95 percent secured by the purchased home and a second
personal loan with a loan-to-value ratio not to exceed 5 percent
secured by a portion of the accumulated contributions and vested
accrued benefits in the member's individual account. A member can
only have one outstanding personal loan.
(2) The loan secured by the purchased home shall be consistent
with the loan-to-value ratios specified in the schedules established
pursuant to Section 20200.
(3) The amount of a conforming loan on a single-family dwelling
unit shall not exceed 95 percent of the Federal National Mortgage
Association (FNMA) conforming loan limits. The amount shall be
adjusted annually as determined by the Federal National Mortgage
Association (FNMA). In no event, shall the loan amount exceed three
hundred fifty thousand dollars ($350,000).
(4) In no event may the personal loan secured by the accumulated
contributions and vested accrued benefits in the member's individual
account exceed 50 percent of the current value amount of the
accumulated contributions.
(5) The pledge of security under this section shall remain in
effect until the loan is paid in full.
(c) In the event of a default on the personal loan secured by the
member's contributions as authorized by this section, the board may
deduct an amount from the member's contributions on deposit and
adjust the member's accrued benefit, up to the amount pledged as
security, prior to making any disbursement of retirement benefits.
(d) The secured personal loan permitted under this section shall
be made available only to currently employed members who meet
eligibility criteria the board deems advisable.
(e) If the member is married at the time the home is purchased
with a personal loan secured by the member's contributions as
authorized by this section, then the member's spouse shall agree in
writing to the pledge of security, as to his or her community
interest in the amount pledged regardless of whether title to the
home is in joint tenancy.
(f) The pledge of security under this section shall take binding
effect, notwithstanding Section 21255. In the event of default, the
accumulated contributions in the member's account shall be reduced as
necessary to recover any outstanding loan balance, not to exceed the
pledged amount.
(g) Appropriate administrative costs of implementing this section
shall be paid by the members utilizing this section. Those costs may
be included in the loan amount.
(h) Appropriate interest rates shall be periodically reviewed and
adjusted to provide loans to members consistent with the financial
integrity of the member home loan program and the sound and prudent
investment of the retirement fund.
(i) The amendments to this section by Chapter 1094 of the Statutes
of 1994 shall be deemed to have become operative on November 1,
1993.
(j) The board shall administer this section under other terms and
conditions it deems appropriate and in keeping with the investment
standard set forth in Section 20151. The board may adopt procedural
guidelines as necessary for its administration of this section and to
assure compliance with applicable state and federal laws.
20202. The board may, subject to and consistent with its fiduciary
duty, establish a program utilizing the retirement fund to assist
currently employed members and annuitants who are victims of a
natural disaster to obtain loans from the retirement fund for the
sole purpose of repairing or rebuilding their homes which have been
damaged by a natural disaster. In order to qualify for a loan the
home of the member or annuitant shall have been damaged by a natural
disaster and the home shall have been in an area that has been
declared a disaster area in a proclamation of the Governor of a state
of emergency affecting the area in which the member or annuitant
resides.
The board may lend any amount of money, up to and including 100
percent of the costs of repairing or rebuilding a home of a member or
annuitant. However, 5 percent of the loan shall be secured by the
contributions of the member who requests the loan.
The board may, under conditions it may deem prudent, require that
a member or annuitant pledge other assets as collateral for a loan.
The board shall establish terms for the termination of loans made
pursuant to this section upon the separation of members from service,
to ensure, in the case of any default, that this system shall not
suffer any loss, and to provide, as a condition of retirement, for
alternative security. The board may impose other terms and conditions
as the board may determine appropriate.
The Legislature hereby reserves full power and authority to
change, revise, limit, expand, or repeal the loan program authorized
by this section.
20203. Notwithstanding any other provision of the law, the board
may enter into security loan agreements pursuant to Division 8
(commencing with Section 7600) of Title 1 with respect to securities
in which the board is authorized by law to invest.
20204. The board may sell exchange-traded call options only through
an exchange, and only with respect to stock owned by this system.
Common stock that is obligated under an unexpired written call option
shall not be sold unless the board first enters into a closing
purchase transaction.
The board may purchase exchange traded options only through an
exchange and only for the purpose of a closing purchase transaction.
20206. The board shall employ investment counsel on its staff or on
a consulting basis or trust companies or trust departments of bands
to render service in connection with the board's investment program.
Whenever the board elects to contract with outside firms for
investment counseling services it shall obtain proposals from all
interested firms and conduct a public meeting at which a consultant
or consultants shall be selected by the board. At least once in each
three-year period after the prior selection, a consultant or
consultants shall be obtained by the same procedure upon submission
of new proposals.
20207. (a) The Legislature finds and declares that changing
economic conditions and increasing complexity in the investment
market make it necessary and desirable that this system obtain the
best possible investment expertise.
(b) It is the intent of the Legislature that the board secure
investment advisers with the composite expertise necessary for the
investment of the retirement fund portfolio.
20208. Upon a finding by the board that necessary investment
expertise is not available within existing civil service
classifications, and with the approval of the State Personnel Board,
the board may contract with qualified investment personnel having
demonstrated expertise in the management of large and diverse
investment portfolios to render service in connection with the
investment program of the board.
The board shall report to the Governor, the Legislature, and the
Joint Legislative Budget Committee on the nature, duration, and cost
of investment contract services used. The report shall be submitted
annually in April.
20209. The board shall, pursuant to the state civil service
statutes, either contract with, or establish and fill a full-time
position for, a person who is experienced and knowledgeable in
corporate management issues to monitor each corporation any of whose
shares are owned by this system and to advise the board on the voting
of the shares owned by this system and on the responses of this
system to merger proposals and tender offers.
Notwithstanding Section 13340, there is hereby continuously
appropriated, without regard to fiscal years, from the retirement
fund, an amount sufficient to pay all costs arising from this
section.
20210. Notwithstanding any other provision of law, the board shall,
by contract, retain not less than two separate individual investment
advisers. There is hereby appropriated, without regard to fiscal
year, from the retirement fund, an amount sufficient to pay all costs
arising from this section.
No costs arising from this section shall be paid from the General
Fund.
20190. The board has exclusive control of the investment of the
retirement fund. Except as otherwise restricted by the California
Constitution and by law, the board may, in its discretion, invest the
assets of the fund through the purchase, holding, or sale thereof of
any investment, financial instrument, or financial transaction when
the investment, financial instrument, or financial transaction is
prudent in the informed opinion of the board.
20191. The board may itself make any investment authorized by law
or sell any security, obligation, or real property in which moneys in
the retirement fund are invested, by affirmative vote of at least
seven members of the board, or by the same affirmative vote may from
time to time adopt an investment resolution that shall contain
detailed guidelines by which to designate those securities and real
property that are acceptable for purchase. While the resolution is in
effect, securities and real property may be purchased for investment
by an officer or employee of the board designated by it for that
purpose, and sales of securities may be consummated by the officer or
employee under the conditions prescribed. Purchases and sales of
securities shall be reported to the board, on a monthly basis, at its
next regular meeting.
20191.5. (a) All investment transaction decisions made during a
closed session pursuant to paragraph (16) of subdivision (c) of
Section 11126 shall be by rollcall vote entered into the minutes of
that meeting.
(b) The board, within 12 months of the close of an investment
transaction or the transfer of system assets for an investment
transaction, whichever occurs first, shall disclose and report the
investment at a public meeting.
20192. In addition to the other investments authorized by this
article, the board may invest in real estate and leases thereof and
improvements thereon for business or residential purposes as an
investment for the production of income.
20193. The board may invest the money in the retirement fund in
real property or improvements thereon or to be constructed thereon
when the real property or improvements are acquired or to be made by
or for sale or lease to the state or a public agency. The board may
acquire the real property under Part 11 (commencing with Section
15850) of Division 3. Title to real property acquired by or on behalf
of the board pursuant to this section or under Part 11 (commencing
with Section 15850) of Division 3 shall be vested in the board. The
Director of General Services on behalf of the state may hire or lease
as lessee real property or improvements acquired pursuant to this
section for lease to the state. The lease may contain an option or
options to purchase the property, or a provision that title to the
property shall vest in the state at the expiration of the term, and
the Director of General Services is authorized to acquire the
property. The board also may invest money in any valid special
obligations of the state or a public agency or an agency of either
issued to finance a public building and secured solely by the
building or revenues, rentals or receipts received from operation of
the building. This section shall not be construed as authorization to
acquire any real property or improvements thereon or to issue any
obligation to finance the acquisition on behalf of the state unless
that acquisition is authorized by a separate act or appropriation
enacted by the Legislature.
20194. (a) Notwithstanding any other provision of law, the board
shall give first priority to investing not less than 25 percent of
all funds which become available in a fiscal year for new
investments, in the following:
(1) Obligations secured by a lien or charge solely on residential
realty, including rental housing, located in the state and on the
security of which, commercial banks are permitted to make loans
pursuant to Article 2 (commencing with Section 1220) of Chapter 10 of
Division 1 of the Financial Code.
(2) Securities representing a beneficial interest in a pool of
obligations secured by a lien or charge solely on residential realty
located in the state.
(3) Certificates of deposit issued by savings and loan
associations, if the savings and loan associations agree to make
loans, or to fund tax-exempt notes or bonds issued by housing
authorities, cities, or counties, on residential realty located in
the state, including rental housing, in an amount equal to the amount
of the deposit.
(b) Funds subject to investment pursuant to this section include
all moneys received as employer and member contributions, investment
income, and the proceeds from all net gains and losses from
securities, reduced by the amount of benefit payments and withdrawals
occurring during the fiscal year. In computing the amount of
investment pursuant to this section, a dollar-for-dollar credit shall
be given for residential realty investments described in this
section that are contractually agreed to be made by a financial
institution from which the board, in consideration thereof, purchases
other investments. In computing the amount of investment pursuant to
this section, the board may elect to include the dollar amount of
commitments to purchase mortgages from public revenue bond programs
in the year the commitment is given. However, that election may not
exceed one-fifth of the total guideline amount.
(c) Nothing in this section shall be construed to require the
acquisition of any instrument or security at less than the market
rate.
(d) If the board determines during any fiscal year that compliance
with this section will result in lower overall earnings for the fund
than obtainable from alternative investment opportunities that would
provide equal or superior security, including guarantee of yield,
the board may substitute those higher yielding investments, to the
extent actually available for acquisition, for the investments
otherwise specified by this section. Additionally, if, and to the
extent that, adherence to the diversification guideline specified in
this section would conflict with its fiduciary obligations in
violation of Section 9 of Article I of the California Constitution or
Section 10 of Article I of the United States Constitution, or would
conflict with the standard for prudent investment of the fund set
forth in Section 17 of Article XVI of the California Constitution,
the board may substitute alternative investments. In that case, the
board shall estimate the amount of funds available for investment in
substitute alternative investments and the amount of funds invested
pursuant to the first paragraph of this section and shall submit its
resolution of findings and determinations, together with a
description of the type, quantity, and yield of the investments
substituted, to the Governor and to the Joint Committee on
Legislative Audit within 20 days following the conclusion of the
fiscal year. Within 30 days thereafter, the Joint Committee on
Legislative Audit shall transmit the State Auditor's report to the
Speaker of the Assembly and to the Senate Committee on Rules for
transmittal to affected policy committees.
(e) The board, upon determining the final amount of funds
available for investment in substitute alternative investments and
the estimated amount of funds invested pursuant to the first
paragraph of this section, shall submit that information to the
Governor and the Joint Committee on Legislative Audit. Thereafter,
the Joint Committee on Legislative Audit shall transmit the report of
the State Auditor to the Speaker of the Assembly and the Senate
Committee on Rules for transmittal to the affected policy committees.
20194.5. In addition to the other investments authorized by this
article, the board may invest in Property Assessed Clean Energy
(PACE) bonds, as defined in Section 26104 of the Public Resources
Code.
20195. (a) The board may select, purchase, or acquire in the name
of the system, the fee or any lesser interest in real property,
improved or unimproved, and may construct or remodel, and equip, an
office building, including appropriate satellite structures, in the
County of Sacramento, California, for its use and for the use of
other state retirement systems excepting the State Teachers'
Retirement System, other departments, boards, and agencies of the
state, or appropriate private commercial entities as space may be
available from time to time. The office building and satellite
structures shall conform to the Capital Master Plan if located within
an area subject to the plan.
(b) The board may select, purchase, or acquire in the name of the
system, the fee or any lesser interest in real property, improved or
unimproved, and may construct or remodel, and equip, business
recovery centers in California for use by the system as an alternate
facility, emergency operations center, or data center that the board
determines is appropriate for disaster preparedness.
(c) If the board acquires bare land, improvements shall be
constructed according to plans approved by the State Public Works
Board and Department of General Services.
(d) If the board acquires land with improvements thereon, the
improvements shall be remodeled or completed in accordance with plans
approved by the State Public Works Board and Department of General
Services.
(e) If condemnation of the property selected is necessary, the
board may elect to deposit the funds deemed necessary with the
Treasurer. The funds are appropriated for purchase of the selected
property subject to the Property Acquisition Law.
(f) Work on all projects shall be done under contract awarded to
the lowest responsible bidder pursuant to bidding procedures set
forth in Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code.
20196. The board may contract with the Department of General
Services or any other state department for assistance and supervision
in the acquisition of real property and the construction thereon of
buildings and improvements authorized in this article.
20197. All buildings and improvements constructed by the board
under this article may contain space in excess of the immediate
requirements of the board that, until needed, may be leased by the
board upon those terms and conditions as may be approved by the
board.
The board may contract with the Department of General Services to
handle the rentals of any excess space over and above that required
by the board and to furnish general supervision and maintenance of
buildings and improvements constructed under the provisions of this
article.
20198. Any building or improvement constructed by the board under
this article shall be subject to the supervision of the board in
accordance with rules and regulations established by the board with
the assistance of the Department of General Services.
20199. The board shall establish a building account for the
transfer of money that is continuously appropriated for that purpose
from the retirement fund for the cost of the acquisition of real
property, the construction or remodeling of buildings and
improvements thereon, and the maintenance, repair, and improvement
thereof.
For accounting purposes the board shall pay to the building
account an amount sufficient to repay all costs for construction and
maintenance of space used by the board. Other amounts or
contributions received shall be deposited in the building account and
disbursed as provided in this section.
The board may contract with the Department of General Services for
the purchase of insurance against loss of, or damage to, the
property or the loss of use or occupancy of the building, liability
insurance and other insurance as is customarily carried on state
office buildings. Premiums for the insurance shall be paid from the
building account.
Money in the building account that is in excess of current needs
shall be paid into the retirement fund monthly. The land, building,
equipment, and improvements thereon, shall constitute an asset in the
retirement fund and shall be carried on the books thereof as such in
accordance with generally accepted accounting practices.
20200. (a) Notwithstanding any other provision of law, the board
may establish a program utilizing the retirement fund to assist
system members, through financing, to obtain homes throughout the
United States.
(b) For the purpose of this section, the term "member" means any
person who is receiving, or is entitled to receive, a retirement
allowance funded by this system, the Legislators' Retirement System,
the Judges' Retirement System, or the Judges' Retirement System II,
notwithstanding any vesting requirement and without regard to present
eligibility to retire.
(c) The board shall adopt regulations governing the program that
shall, among other things, provide:
(1) That home loans be made available to members for the purchase
of single-family dwellings, two-family dwellings, three-family
dwellings, four-family dwellings, single-family cooperative
apartments, and single-family condominiums.
(2) That private lending institutions throughout the United States
shall originate and service its home loans pursuant to agreements
entered into between those institutions and the board.
(3) That the recipients of the loans occupy the homes as their
permanent residences in accord with rules and regulations established
by the board.
(4) That its home loans shall be available only for the purchase
or refinancing of homes throughout the United States and that under
no condition shall a member have more than one outstanding loan.
(5) That the amount and length of the loans shall be pursuant to a
schedule periodically established by the board that shall provide a
loan-to-value ratio of no greater than the following:
(A) One hundred percent for the first loan for a single-family
dwelling, single-family cooperative apartment, or single-family
condominium.
(B) Ninety-five percent for the first loan on a two-family
dwelling.
(C) Ninety percent for the first loan on a three-family dwelling
or four-family dwelling.
The portion of any loan exceeding 80 percent of value shall be
insured by an admitted mortgage guaranty insurer conforming to
Chapter 2A (commencing with Section 12640.01) of Part 6 of Division 2
of the Insurance Code, in an amount so that the unguaranteed portion
of the loan does not exceed 75 percent of the market value of the
property together with improvements thereon.
(6) That there may be prepayment penalties assessed on its loans
in accordance with rules and regulations established by the board.
(7) That the criteria and terms for its loans shall provide the
greatest benefit to members consistent with the financial integrity
of the program and the sound investment of the retirement fund.
(8) Any other terms and conditions as the board shall deem
appropriate.
(d) This section shall be known as, and may be cited as, the Dave
Elder Public Employees' Retirement System Member Home Loan Program
Act.
20201. (a) It is the intent of the Legislature that the provisions
of this section be available to assist members in obtaining homes
throughout the United States. The Legislature intends that home loans
made pursuant to Section 20200 and this section shall be secured
primarily by the property acquired except as authorized pursuant to
paragraph (1) of subdivision (b) and shall not exceed the fair market
value of the property acquired.
(b) The board shall include in any program established pursuant to
Section 20200 a procedure whereby a member may obtain 100-percent
financing for the purchase of a single-family dwelling unit in
accordance with the following criteria:
(1) The member shall obtain one loan with a loan-to-value ratio
not to exceed 95 percent secured by the purchased home and a second
personal loan with a loan-to-value ratio not to exceed 5 percent
secured by a portion of the accumulated contributions and vested
accrued benefits in the member's individual account. A member can
only have one outstanding personal loan.
(2) The loan secured by the purchased home shall be consistent
with the loan-to-value ratios specified in the schedules established
pursuant to Section 20200.
(3) The amount of a conforming loan on a single-family dwelling
unit shall not exceed 95 percent of the Federal National Mortgage
Association (FNMA) conforming loan limits. The amount shall be
adjusted annually as determined by the Federal National Mortgage
Association (FNMA). In no event, shall the loan amount exceed three
hundred fifty thousand dollars ($350,000).
(4) In no event may the personal loan secured by the accumulated
contributions and vested accrued benefits in the member's individual
account exceed 50 percent of the current value amount of the
accumulated contributions.
(5) The pledge of security under this section shall remain in
effect until the loan is paid in full.
(c) In the event of a default on the personal loan secured by the
member's contributions as authorized by this section, the board may
deduct an amount from the member's contributions on deposit and
adjust the member's accrued benefit, up to the amount pledged as
security, prior to making any disbursement of retirement benefits.
(d) The secured personal loan permitted under this section shall
be made available only to currently employed members who meet
eligibility criteria the board deems advisable.
(e) If the member is married at the time the home is purchased
with a personal loan secured by the member's contributions as
authorized by this section, then the member's spouse shall agree in
writing to the pledge of security, as to his or her community
interest in the amount pledged regardless of whether title to the
home is in joint tenancy.
(f) The pledge of security under this section shall take binding
effect, notwithstanding Section 21255. In the event of default, the
accumulated contributions in the member's account shall be reduced as
necessary to recover any outstanding loan balance, not to exceed the
pledged amount.
(g) Appropriate administrative costs of implementing this section
shall be paid by the members utilizing this section. Those costs may
be included in the loan amount.
(h) Appropriate interest rates shall be periodically reviewed and
adjusted to provide loans to members consistent with the financial
integrity of the member home loan program and the sound and prudent
investment of the retirement fund.
(i) The amendments to this section by Chapter 1094 of the Statutes
of 1994 shall be deemed to have become operative on November 1,
1993.
(j) The board shall administer this section under other terms and
conditions it deems appropriate and in keeping with the investment
standard set forth in Section 20151. The board may adopt procedural
guidelines as necessary for its administration of this section and to
assure compliance with applicable state and federal laws.
20202. The board may, subject to and consistent with its fiduciary
duty, establish a program utilizing the retirement fund to assist
currently employed members and annuitants who are victims of a
natural disaster to obtain loans from the retirement fund for the
sole purpose of repairing or rebuilding their homes which have been
damaged by a natural disaster. In order to qualify for a loan the
home of the member or annuitant shall have been damaged by a natural
disaster and the home shall have been in an area that has been
declared a disaster area in a proclamation of the Governor of a state
of emergency affecting the area in which the member or annuitant
resides.
The board may lend any amount of money, up to and including 100
percent of the costs of repairing or rebuilding a home of a member or
annuitant. However, 5 percent of the loan shall be secured by the
contributions of the member who requests the loan.
The board may, under conditions it may deem prudent, require that
a member or annuitant pledge other assets as collateral for a loan.
The board shall establish terms for the termination of loans made
pursuant to this section upon the separation of members from service,
to ensure, in the case of any default, that this system shall not
suffer any loss, and to provide, as a condition of retirement, for
alternative security. The board may impose other terms and conditions
as the board may determine appropriate.
The Legislature hereby reserves full power and authority to
change, revise, limit, expand, or repeal the loan program authorized
by this section.
20203. Notwithstanding any other provision of the law, the board
may enter into security loan agreements pursuant to Division 8
(commencing with Section 7600) of Title 1 with respect to securities
in which the board is authorized by law to invest.
20204. The board may sell exchange-traded call options only through
an exchange, and only with respect to stock owned by this system.
Common stock that is obligated under an unexpired written call option
shall not be sold unless the board first enters into a closing
purchase transaction.
The board may purchase exchange traded options only through an
exchange and only for the purpose of a closing purchase transaction.
20206. The board shall employ investment counsel on its staff or on
a consulting basis or trust companies or trust departments of bands
to render service in connection with the board's investment program.
Whenever the board elects to contract with outside firms for
investment counseling services it shall obtain proposals from all
interested firms and conduct a public meeting at which a consultant
or consultants shall be selected by the board. At least once in each
three-year period after the prior selection, a consultant or
consultants shall be obtained by the same procedure upon submission
of new proposals.
20207. (a) The Legislature finds and declares that changing
economic conditions and increasing complexity in the investment
market make it necessary and desirable that this system obtain the
best possible investment expertise.
(b) It is the intent of the Legislature that the board secure
investment advisers with the composite expertise necessary for the
investment of the retirement fund portfolio.
20208. Upon a finding by the board that necessary investment
expertise is not available within existing civil service
classifications, and with the approval of the State Personnel Board,
the board may contract with qualified investment personnel having
demonstrated expertise in the management of large and diverse
investment portfolios to render service in connection with the
investment program of the board.
The board shall report to the Governor, the Legislature, and the
Joint Legislative Budget Committee on the nature, duration, and cost
of investment contract services used. The report shall be submitted
annually in April.
20209. The board shall, pursuant to the state civil service
statutes, either contract with, or establish and fill a full-time
position for, a person who is experienced and knowledgeable in
corporate management issues to monitor each corporation any of whose
shares are owned by this system and to advise the board on the voting
of the shares owned by this system and on the responses of this
system to merger proposals and tender offers.
Notwithstanding Section 13340, there is hereby continuously
appropriated, without regard to fiscal years, from the retirement
fund, an amount sufficient to pay all costs arising from this
section.
20210. Notwithstanding any other provision of law, the board shall,
by contract, retain not less than two separate individual investment
advisers. There is hereby appropriated, without regard to fiscal
year, from the retirement fund, an amount sufficient to pay all costs
arising from this section.
No costs arising from this section shall be paid from the General
Fund.
20190. The board has exclusive control of the investment of the
retirement fund. Except as otherwise restricted by the California
Constitution and by law, the board may, in its discretion, invest the
assets of the fund through the purchase, holding, or sale thereof of
any investment, financial instrument, or financial transaction when
the investment, financial instrument, or financial transaction is
prudent in the informed opinion of the board.
20191. The board may itself make any investment authorized by law
or sell any security, obligation, or real property in which moneys in
the retirement fund are invested, by affirmative vote of at least
seven members of the board, or by the same affirmative vote may from
time to time adopt an investment resolution that shall contain
detailed guidelines by which to designate those securities and real
property that are acceptable for purchase. While the resolution is in
effect, securities and real property may be purchased for investment
by an officer or employee of the board designated by it for that
purpose, and sales of securities may be consummated by the officer or
employee under the conditions prescribed. Purchases and sales of
securities shall be reported to the board, on a monthly basis, at its
next regular meeting.
20191.5. (a) All investment transaction decisions made during a
closed session pursuant to paragraph (16) of subdivision (c) of
Section 11126 shall be by rollcall vote entered into the minutes of
that meeting.
(b) The board, within 12 months of the close of an investment
transaction or the transfer of system assets for an investment
transaction, whichever occurs first, shall disclose and report the
investment at a public meeting.
20192. In addition to the other investments authorized by this
article, the board may invest in real estate and leases thereof and
improvements thereon for business or residential purposes as an
investment for the production of income.
20193. The board may invest the money in the retirement fund in
real property or improvements thereon or to be constructed thereon
when the real property or improvements are acquired or to be made by
or for sale or lease to the state or a public agency. The board may
acquire the real property under Part 11 (commencing with Section
15850) of Division 3. Title to real property acquired by or on behalf
of the board pursuant to this section or under Part 11 (commencing
with Section 15850) of Division 3 shall be vested in the board. The
Director of General Services on behalf of the state may hire or lease
as lessee real property or improvements acquired pursuant to this
section for lease to the state. The lease may contain an option or
options to purchase the property, or a provision that title to the
property shall vest in the state at the expiration of the term, and
the Director of General Services is authorized to acquire the
property. The board also may invest money in any valid special
obligations of the state or a public agency or an agency of either
issued to finance a public building and secured solely by the
building or revenues, rentals or receipts received from operation of
the building. This section shall not be construed as authorization to
acquire any real property or improvements thereon or to issue any
obligation to finance the acquisition on behalf of the state unless
that acquisition is authorized by a separate act or appropriation
enacted by the Legislature.
20194. (a) Notwithstanding any other provision of law, the board
shall give first priority to investing not less than 25 percent of
all funds which become available in a fiscal year for new
investments, in the following:
(1) Obligations secured by a lien or charge solely on residential
realty, including rental housing, located in the state and on the
security of which, commercial banks are permitted to make loans
pursuant to Article 2 (commencing with Section 1220) of Chapter 10 of
Division 1 of the Financial Code.
(2) Securities representing a beneficial interest in a pool of
obligations secured by a lien or charge solely on residential realty
located in the state.
(3) Certificates of deposit issued by savings and loan
associations, if the savings and loan associations agree to make
loans, or to fund tax-exempt notes or bonds issued by housing
authorities, cities, or counties, on residential realty located in
the state, including rental housing, in an amount equal to the amount
of the deposit.
(b) Funds subject to investment pursuant to this section include
all moneys received as employer and member contributions, investment
income, and the proceeds from all net gains and losses from
securities, reduced by the amount of benefit payments and withdrawals
occurring during the fiscal year. In computing the amount of
investment pursuant to this section, a dollar-for-dollar credit shall
be given for residential realty investments described in this
section that are contractually agreed to be made by a financial
institution from which the board, in consideration thereof, purchases
other investments. In computing the amount of investment pursuant to
this section, the board may elect to include the dollar amount of
commitments to purchase mortgages from public revenue bond programs
in the year the commitment is given. However, that election may not
exceed one-fifth of the total guideline amount.
(c) Nothing in this section shall be construed to require the
acquisition of any instrument or security at less than the market
rate.
(d) If the board determines during any fiscal year that compliance
with this section will result in lower overall earnings for the fund
than obtainable from alternative investment opportunities that would
provide equal or superior security, including guarantee of yield,
the board may substitute those higher yielding investments, to the
extent actually available for acquisition, for the investments
otherwise specified by this section. Additionally, if, and to the
extent that, adherence to the diversification guideline specified in
this section would conflict with its fiduciary obligations in
violation of Section 9 of Article I of the California Constitution or
Section 10 of Article I of the United States Constitution, or would
conflict with the standard for prudent investment of the fund set
forth in Section 17 of Article XVI of the California Constitution,
the board may substitute alternative investments. In that case, the
board shall estimate the amount of funds available for investment in
substitute alternative investments and the amount of funds invested
pursuant to the first paragraph of this section and shall submit its
resolution of findings and determinations, together with a
description of the type, quantity, and yield of the investments
substituted, to the Governor and to the Joint Committee on
Legislative Audit within 20 days following the conclusion of the
fiscal year. Within 30 days thereafter, the Joint Committee on
Legislative Audit shall transmit the State Auditor's report to the
Speaker of the Assembly and to the Senate Committee on Rules for
transmittal to affected policy committees.
(e) The board, upon determining the final amount of funds
available for investment in substitute alternative investments and
the estimated amount of funds invested pursuant to the first
paragraph of this section, shall submit that information to the
Governor and the Joint Committee on Legislative Audit. Thereafter,
the Joint Committee on Legislative Audit shall transmit the report of
the State Auditor to the Speaker of the Assembly and the Senate
Committee on Rules for transmittal to the affected policy committees.
20194.5. In addition to the other investments authorized by this
article, the board may invest in Property Assessed Clean Energy
(PACE) bonds, as defined in Section 26104 of the Public Resources
Code.
20195. (a) The board may select, purchase, or acquire in the name
of the system, the fee or any lesser interest in real property,
improved or unimproved, and may construct or remodel, and equip, an
office building, including appropriate satellite structures, in the
County of Sacramento, California, for its use and for the use of
other state retirement systems excepting the State Teachers'
Retirement System, other departments, boards, and agencies of the
state, or appropriate private commercial entities as space may be
available from time to time. The office building and satellite
structures shall conform to the Capital Master Plan if located within
an area subject to the plan.
(b) The board may select, purchase, or acquire in the name of the
system, the fee or any lesser interest in real property, improved or
unimproved, and may construct or remodel, and equip, business
recovery centers in California for use by the system as an alternate
facility, emergency operations center, or data center that the board
determines is appropriate for disaster preparedness.
(c) If the board acquires bare land, improvements shall be
constructed according to plans approved by the State Public Works
Board and Department of General Services.
(d) If the board acquires land with improvements thereon, the
improvements shall be remodeled or completed in accordance with plans
approved by the State Public Works Board and Department of General
Services.
(e) If condemnation of the property selected is necessary, the
board may elect to deposit the funds deemed necessary with the
Treasurer. The funds are appropriated for purchase of the selected
property subject to the Property Acquisition Law.
(f) Work on all projects shall be done under contract awarded to
the lowest responsible bidder pursuant to bidding procedures set
forth in Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code.
20196. The board may contract with the Department of General
Services or any other state department for assistance and supervision
in the acquisition of real property and the construction thereon of
buildings and improvements authorized in this article.
20197. All buildings and improvements constructed by the board
under this article may contain space in excess of the immediate
requirements of the board that, until needed, may be leased by the
board upon those terms and conditions as may be approved by the
board.
The board may contract with the Department of General Services to
handle the rentals of any excess space over and above that required
by the board and to furnish general supervision and maintenance of
buildings and improvements constructed under the provisions of this
article.
20198. Any building or improvement constructed by the board under
this article shall be subject to the supervision of the board in
accordance with rules and regulations established by the board with
the assistance of the Department of General Services.
20199. The board shall establish a building account for the
transfer of money that is continuously appropriated for that purpose
from the retirement fund for the cost of the acquisition of real
property, the construction or remodeling of buildings and
improvements thereon, and the maintenance, repair, and improvement
thereof.
For accounting purposes the board shall pay to the building
account an amount sufficient to repay all costs for construction and
maintenance of space used by the board. Other amounts or
contributions received shall be deposited in the building account and
disbursed as provided in this section.
The board may contract with the Department of General Services for
the purchase of insurance against loss of, or damage to, the
property or the loss of use or occupancy of the building, liability
insurance and other insurance as is customarily carried on state
office buildings. Premiums for the insurance shall be paid from the
building account.
Money in the building account that is in excess of current needs
shall be paid into the retirement fund monthly. The land, building,
equipment, and improvements thereon, shall constitute an asset in the
retirement fund and shall be carried on the books thereof as such in
accordance with generally accepted accounting practices.
20200. (a) Notwithstanding any other provision of law, the board
may establish a program utilizing the retirement fund to assist
system members, through financing, to obtain homes throughout the
United States.
(b) For the purpose of this section, the term "member" means any
person who is receiving, or is entitled to receive, a retirement
allowance funded by this system, the Legislators' Retirement System,
the Judges' Retirement System, or the Judges' Retirement System II,
notwithstanding any vesting requirement and without regard to present
eligibility to retire.
(c) The board shall adopt regulations governing the program that
shall, among other things, provide:
(1) That home loans be made available to members for the purchase
of single-family dwellings, two-family dwellings, three-family
dwellings, four-family dwellings, single-family cooperative
apartments, and single-family condominiums.
(2) That private lending institutions throughout the United States
shall originate and service its home loans pursuant to agreements
entered into between those institutions and the board.
(3) That the recipients of the loans occupy the homes as their
permanent residences in accord with rules and regulations established
by the board.
(4) That its home loans shall be available only for the purchase
or refinancing of homes throughout the United States and that under
no condition shall a member have more than one outstanding loan.
(5) That the amount and length of the loans shall be pursuant to a
schedule periodically established by the board that shall provide a
loan-to-value ratio of no greater than the following:
(A) One hundred percent for the first loan for a single-family
dwelling, single-family cooperative apartment, or single-family
condominium.
(B) Ninety-five percent for the first loan on a two-family
dwelling.
(C) Ninety percent for the first loan on a three-family dwelling
or four-family dwelling.
The portion of any loan exceeding 80 percent of value shall be
insured by an admitted mortgage guaranty insurer conforming to
Chapter 2A (commencing with Section 12640.01) of Part 6 of Division 2
of the Insurance Code, in an amount so that the unguaranteed portion
of the loan does not exceed 75 percent of the market value of the
property together with improvements thereon.
(6) That there may be prepayment penalties assessed on its loans
in accordance with rules and regulations established by the board.
(7) That the criteria and terms for its loans shall provide the
greatest benefit to members consistent with the financial integrity
of the program and the sound investment of the retirement fund.
(8) Any other terms and conditions as the board shall deem
appropriate.
(d) This section shall be known as, and may be cited as, the Dave
Elder Public Employees' Retirement System Member Home Loan Program
Act.
20201. (a) It is the intent of the Legislature that the provisions
of this section be available to assist members in obtaining homes
throughout the United States. The Legislature intends that home loans
made pursuant to Section 20200 and this section shall be secured
primarily by the property acquired except as authorized pursuant to
paragraph (1) of subdivision (b) and shall not exceed the fair market
value of the property acquired.
(b) The board shall include in any program established pursuant to
Section 20200 a procedure whereby a member may obtain 100-percent
financing for the purchase of a single-family dwelling unit in
accordance with the following criteria:
(1) The member shall obtain one loan with a loan-to-value ratio
not to exceed 95 percent secured by the purchased home and a second
personal loan with a loan-to-value ratio not to exceed 5 percent
secured by a portion of the accumulated contributions and vested
accrued benefits in the member's individual account. A member can
only have one outstanding personal loan.
(2) The loan secured by the purchased home shall be consistent
with the loan-to-value ratios specified in the schedules established
pursuant to Section 20200.
(3) The amount of a conforming loan on a single-family dwelling
unit shall not exceed 95 percent of the Federal National Mortgage
Association (FNMA) conforming loan limits. The amount shall be
adjusted annually as determined by the Federal National Mortgage
Association (FNMA). In no event, shall the loan amount exceed three
hundred fifty thousand dollars ($350,000).
(4) In no event may the personal loan secured by the accumulated
contributions and vested accrued benefits in the member's individual
account exceed 50 percent of the current value amount of the
accumulated contributions.
(5) The pledge of security under this section shall remain in
effect until the loan is paid in full.
(c) In the event of a default on the personal loan secured by the
member's contributions as authorized by this section, the board may
deduct an amount from the member's contributions on deposit and
adjust the member's accrued benefit, up to the amount pledged as
security, prior to making any disbursement of retirement benefits.
(d) The secured personal loan permitted under this section shall
be made available only to currently employed members who meet
eligibility criteria the board deems advisable.
(e) If the member is married at the time the home is purchased
with a personal loan secured by the member's contributions as
authorized by this section, then the member's spouse shall agree in
writing to the pledge of security, as to his or her community
interest in the amount pledged regardless of whether title to the
home is in joint tenancy.
(f) The pledge of security under this section shall take binding
effect, notwithstanding Section 21255. In the event of default, the
accumulated contributions in the member's account shall be reduced as
necessary to recover any outstanding loan balance, not to exceed the
pledged amount.
(g) Appropriate administrative costs of implementing this section
shall be paid by the members utilizing this section. Those costs may
be included in the loan amount.
(h) Appropriate interest rates shall be periodically reviewed and
adjusted to provide loans to members consistent with the financial
integrity of the member home loan program and the sound and prudent
investment of the retirement fund.
(i) The amendments to this section by Chapter 1094 of the Statutes
of 1994 shall be deemed to have become operative on November 1,
1993.
(j) The board shall administer this section under other terms and
conditions it deems appropriate and in keeping with the investment
standard set forth in Section 20151. The board may adopt procedural
guidelines as necessary for its administration of this section and to
assure compliance with applicable state and federal laws.
20202. The board may, subject to and consistent with its fiduciary
duty, establish a program utilizing the retirement fund to assist
currently employed members and annuitants who are victims of a
natural disaster to obtain loans from the retirement fund for the
sole purpose of repairing or rebuilding their homes which have been
damaged by a natural disaster. In order to qualify for a loan the
home of the member or annuitant shall have been damaged by a natural
disaster and the home shall have been in an area that has been
declared a disaster area in a proclamation of the Governor of a state
of emergency affecting the area in which the member or annuitant
resides.
The board may lend any amount of money, up to and including 100
percent of the costs of repairing or rebuilding a home of a member or
annuitant. However, 5 percent of the loan shall be secured by the
contributions of the member who requests the loan.
The board may, under conditions it may deem prudent, require that
a member or annuitant pledge other assets as collateral for a loan.
The board shall establish terms for the termination of loans made
pursuant to this section upon the separation of members from service,
to ensure, in the case of any default, that this system shall not
suffer any loss, and to provide, as a condition of retirement, for
alternative security. The board may impose other terms and conditions
as the board may determine appropriate.
The Legislature hereby reserves full power and authority to
change, revise, limit, expand, or repeal the loan program authorized
by this section.
20203. Notwithstanding any other provision of the law, the board
may enter into security loan agreements pursuant to Division 8
(commencing with Section 7600) of Title 1 with respect to securities
in which the board is authorized by law to invest.
20204. The board may sell exchange-traded call options only through
an exchange, and only with respect to stock owned by this system.
Common stock that is obligated under an unexpired written call option
shall not be sold unless the board first enters into a closing
purchase transaction.
The board may purchase exchange traded options only through an
exchange and only for the purpose of a closing purchase transaction.
20206. The board shall employ investment counsel on its staff or on
a consulting basis or trust companies or trust departments of bands
to render service in connection with the board's investment program.
Whenever the board elects to contract with outside firms for
investment counseling services it shall obtain proposals from all
interested firms and conduct a public meeting at which a consultant
or consultants shall be selected by the board. At least once in each
three-year period after the prior selection, a consultant or
consultants shall be obtained by the same procedure upon submission
of new proposals.
20207. (a) The Legislature finds and declares that changing
economic conditions and increasing complexity in the investment
market make it necessary and desirable that this system obtain the
best possible investment expertise.
(b) It is the intent of the Legislature that the board secure
investment advisers with the composite expertise necessary for the
investment of the retirement fund portfolio.
20208. Upon a finding by the board that necessary investment
expertise is not available within existing civil service
classifications, and with the approval of the State Personnel Board,
the board may contract with qualified investment personnel having
demonstrated expertise in the management of large and diverse
investment portfolios to render service in connection with the
investment program of the board.
The board shall report to the Governor, the Legislature, and the
Joint Legislative Budget Committee on the nature, duration, and cost
of investment contract services used. The report shall be submitted
annually in April.
20209. The board shall, pursuant to the state civil service
statutes, either contract with, or establish and fill a full-time
position for, a person who is experienced and knowledgeable in
corporate management issues to monitor each corporation any of whose
shares are owned by this system and to advise the board on the voting
of the shares owned by this system and on the responses of this
system to merger proposals and tender offers.
Notwithstanding Section 13340, there is hereby continuously
appropriated, without regard to fiscal years, from the retirement
fund, an amount sufficient to pay all costs arising from this
section.
20210. Notwithstanding any other provision of law, the board shall,
by contract, retain not less than two separate individual investment
advisers. There is hereby appropriated, without regard to fiscal
year, from the retirement fund, an amount sufficient to pay all costs
arising from this section.
No costs arising from this section shall be paid from the General
Fund.
