AB 2283, as amended, 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,begin insert before either board chooses to invest in new securitized home rental properties or reinvest in an existing investment in securitized home rental properties andend insert consistent with their fiduciary duties,begin delete on and after January 1, 2017, to cease investing in securitized home rental properties.end deletebegin insert to evaluate their investment in securitized home rental properties and ensure certain requirements are met, including that the property management group is in compliance with fair housing laws, as specified.end insert 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.begin delete 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.end deletebegin insert The bill would also require each board to appoint an independent ombudsman to implement a system of oversight and enforcement of these provisions.end insert
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
(b) Before the board chooses to invest in new securitized home
15rental properties or reinvest in an existing investment in securitized
16home rental properties, the board shall evaluate those investments
17and ensure all of the following:
18
(1) That the property management group is in compliance with
19fair housing laws that prohibit discrimination against renters
20based on race, national origin, sex, familial composition, or
21disability.
P3 1
(2) That rents are not increased to a level that is inconsistent
2with the surrounding rental market, that an unreasonable financial
3burden is not placed on the tenant through unjustly raising rents,
4and that rents are kept affordable.
5
(3) That securitized home rental properties are in compliance
6with lawful eviction notice
guidelines to ensure renters are not
7unjustly evicted from the property.
8
(4) That adequate maintenance of the investment properties is
9being conducted.
10
(c) The board shall appoint an independent ombudsman to
11implement a system of oversight and enforcement of subdivision
12(b).
13(d) This section shall not require the board to take any action
14unless the board determines in good faith that the action described
15in this section is consistent with the fiduciary responsibilities of
16the board described in Section 17 of Article XVI of the California
17Constitution.
Section 20201.5 is added to the Government Code, to
19read:
(a) For purposes of this section, “securitized home
21rental properties” means single-family homes in California used
22as rental properties that are aggregated, either with properties in
23California or elsewhere, with the resulting income from the
24properties funding publicly traded investment products.
25(b) On and after January 1, 2017, the board, consistent with its
26fiduciary duties, shall not make new or additional investments in
27securitized rental home properties.
28(c) On or before January 1, 2018, the board, consistent with its
29fiduciary duties, shall liquidate its investments in securitized rental
30home properties.
31
(b) Before the board chooses to invest in new securitized home
32rental properties or reinvest in an existing investment in securitized
33home rental properties, the board shall evaluate those investments
34and ensure all of the following:
35
(1) That the property management group is in compliance with
36fair housing laws that prohibit discrimination against renters
37based on race, national origin, sex, familial composition, or
38disability.
39
(2) That rents are not increased to a level that is inconsistent
40with the surrounding rental market, that an unreasonable financial
P4 1burden is not placed on the tenant through unjustly raising rents,
2and that rents are kept affordable.
3
(3) That securitized home rental properties are in compliance
4with lawful eviction notice
guidelines to ensure renters are not
5unjustly evicted from the property.
6
(4) That adequate maintenance of the investment properties is
7being conducted.
8
(c) The board shall appoint an independent ombudsman to
9implement a system of oversight and enforcement of subdivision
10(b).
11(d) This section shall not require the board to take any action
12unless the board determines in good faith that the action described
13in this section is consistent with the fiduciary responsibilities of
14the board described in Section 17 of Article XVI of the California
15Constitution.
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