BILL ANALYSIS
AB 2680
Page 1
ASSEMBLY THIRD READING
AB 2680 (Negrete McLeod)
As Amended April 22, 2004
Majority vote
PUBLIC EMPLOYEES 8-0
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|Ayes:|Negrete McLeod, Levine, | | |
| |Campbell, Chan, Correa, | | |
| |Kehoe, Laird, Nakanishi | | |
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| | | | |
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SUMMARY : Authorizes the State Teachers' Retirement Board (STRB)
to conduct specified real estate activities. Specifically, this
bill :
1)Authorizes STRB to remodel, equip, or construct an office
building in the greater metropolitan Sacramento area including
the City of Sacramento, the County of Sacramento, and the
eastern part of Yolo County, for the purposes of establishing
a permanent headquarters facility for the system.
2)Removes the California State Teachers' Retirement System
(CalSTRS) from the systems for which the Public Employees'
Retirement Board has the authority to acquire property.
EXISTING LAW :
1)Authorizes STRB to remodel, equip, or construct an office
building in Sacramento County for a permanent headquarters
facility for CalSTRS.
2)Authorizes the Board of Administration of the California
Public Employees' Retirement System (CalPERS) to acquire
property for the use of CalSTRS and other state retirement
systems.
FISCAL EFFECT : According to CalSTRS, the authorization provided
by this bill does not assume any costs for actual construction
because the Board has made no final decision regarding a site.
This bill is designed to provide an option to pursue
geographical areas other than Sacramento County.
AB 2680
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COMMENTS : This bill expands the geographic area in which
CalSTRS may locate its headquarters facility within metropolitan
Sacramento to include eastern Yolo County, and eliminates an
unused provision in existing law that authorizes the Board of
Administration of CalPERS to lease, purchase, or construct
offices for CalSTRS' use.
Under the provisions of the Property Acquisition Law (Part 11 of
Division 3, Title 2 of the Government Code), the Director of the
Department of General Services (DGS) is generally authorized to
hire, lease, lease-purchase, or lease with the option to
purchase any real or personal property for the use of any state
agency if the director deems the hiring or leasing is in the
state's best interest. Education Code Section 22375
specifically exempts CalSTRS from these provisions and allows
STRB to lease, purchase or build an office building within
Sacramento County to serve as a headquarters facility for
CalSTRS. In 1984, STRB purchased the CalSTRS existing
headquarters building in East Sacramento, which has housed
CalSTRS staff for the last 20 years.
CalSTRS headquarters facility has been held in the real estate
investment portfolio of the Teachers' Retirement Fund (Fund)
since its acquisition. At various times in the past, CalSTRS
has leased space in its East Sacramento headquarters to both
governmental and private entities to generate additional revenue
for the Fund. As with all CalSTRS investments in real property
in California, the Fund pays no property taxes that would
otherwise be imposed on private holdings, and instead, all
non-governmental tenants in these investment properties are
required to pay in-lieu taxes.
According to CalSTRS, "As a result of legislation enacted in
recent years, CalSTRS has expanded its programs and operations
to a point where it is now occupying parts of three buildings in
East Sacramento. Consequently, the Board directed CalSTRS staff
to evaluate the System's long-term facility needs that would
allow the System to consolidate its operations to provide for
more efficient administration of the System. After narrowing the
number of possible locations for a new headquarters facility,
CalSTRS staff is nearing a point in the planning process where a
recommendation will be made to the Board.
"While existing law allows the Board to lease, purchase or build
office space within Sacramento County to serve as a headquarters
AB 2680
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facility for the System, there may be properties outside of
Sacramento County, but within metropolitan Sacramento, that best
meet the administrative needs of CalSTRS and the service needs
of its members, and also present attractive commercial
investment and/or development opportunities. Without legislative
authorization to consider locations in eastern Yolo County, the
Board may be unable to choose an alternative that would provide
the best combination of improvements to member service and
returns to the Fund."
The Legislature has previously recognized eastern Yolo County as
an appropriate location for state agency headquarters. For
example, the headquarters of DGS is located in leased office
space in an existing building along the West Sacramento
waterfront and the California Highway Patrol houses its training
facility and administrative operations near the northern edge of
the city. In addition, SB 1934 (Johnston), Chapter 782,
Statutes of 1998, allows DGS to construct a state-owned office
building in West Sacramento for the Department of Corrections
and other specified state agencies.
This bill also eliminates an unused provision in existing law
that allows the CalPERS Board of Administration to lease,
purchase, or build offices for CalSTRS' use. This provision,
enacted in 1977, anticipated CalPERS would include CalSTRS in
its new headquarters building which became Lincoln Plaza in
downtown Sacramento, however, with the passage of AB 3166
(Papan), Chapter 1429, Statutes of 1982, and CalSTRS' purchase
of a headquarters building in 1984, the need for this
authorization has long passed. CalPERS staff have indicated
that they have no concerns with the proposal and that the change
is consistent with their efforts to eliminate unnecessary
provisions of the Government Code that apply to their agency.
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957
FN: 0005435