AB 2283, as introduced, Calderon. Public retirement system: investments: securitized rental homes.
Existing law creates the State Teachers’ Retirement System (STRS) and the Public Employees’ Retirement System (PERS) for the purpose of providing pension and other benefits to teachers and public employees. These systems are funded by employee and employer contributions, investment returns and, in the case of STRS, additional state contributions. The California Constitution authorizes the Legislature to prohibit certain investments by a retirement board if doing so is in the public interest and satisfies the standards of fiduciary care and loyalty required of a retirement board. The California Constitution commits to the retirement board of a public pension or retirement system plenary authority and fiduciary responsibility for investment of moneys and administration of the system.
This bill would require the Teachers’ Retirement Board and the Board of Administration of the Public Employees’ Retirement System, consistent with their fiduciary duties, on and after January 1, 2017, to cease investing in securitized home rental properties. The bill would define securitized home rental properties as single-family homes in California used as rental properties that are aggregated, either with properties in California or elsewhere, with the resulting income from the properties funding publicly traded investment products. The bill would also require the board, consistent with its fiduciary duties, on or before January 1, 2018, to liquidate investments in securitized home rental properties.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 22357 is added to the Education Code,
2to read:
(a) For purposes of this section, “securitized home
4rental properties” means single-family homes in California used
5as rental properties that are aggregated, either with properties in
6California or elsewhere, with the resulting income from the
7properties funding publicly traded investment products.
8(b) On and after January 1, 2017, the board, consistent with its
9fiduciary duties, shall not make new or additional investments in
10securitized rental home properties.
11(c) On or before January 1, 2018, the board, consistent with its
12fiduciary duties, shall liquidate its investments in securitized rental
13home properties.
14(d) This section shall not require the board to take any action
15unless the board determines in good faith that the action described
16in this section is consistent with the fiduciary responsibilities of
17the board described in Section 17 of Article XVI of the California
18Constitution.
Section 20201.5 is added to the Government Code, to
20read:
(a) For purposes of this section, “securitized home
22rental properties” means single-family homes in California used
23as rental properties that are aggregated, either with properties in
24California or elsewhere, with the resulting income from the
25properties funding publicly traded investment products.
26(b) On and after January 1, 2017, the board, consistent with its
27fiduciary duties, shall not make new or additional investments in
28securitized rental home properties.
P3 1(c) On or before January 1, 2018, the board, consistent with its
2fiduciary duties, shall liquidate its investments in securitized rental
3home properties.
4(d) This section shall not require the board to take any action
5unless the board determines in good faith that the action described
6in this section is consistent with the fiduciary responsibilities of
7the board described in Section 17 of Article XVI of the California
8Constitution.
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