BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2680|
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THIRD READING
Bill No: AB 2680
Author: Negrete McLeod (D), et al
Amended: 4/22/04 in Assembly
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 5-0, 6/14/04
AYES: Soto, Ashburn, Escutia, Karnette, Oller
ASSEMBLY FLOOR : 77-1, 5/20/04 - See last page for vote
SUBJECT : State Teachers Retirement System: headquarters
building
SOURCE : State Teachers Retirement System
DIGEST : This bill authorizes the State Teachers
Retirement System Board to conduct real estate activities
relating to the location of their headquarters building.
ANALYSIS :
Existing State Teachers Retirement System (STRS) law:
1. Authorizes the STRS Board to remodel, equip, or
construct a headquarters building in Sacramento County
for STRS.
2. Authorizes the Board of Administration of the State
Public Employees' Retirement System (PERS Board) to
acquire property for the use of STRS and other state
retirement systems.
CONTINUED
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This bill:
1. Authorizes the STRS Board 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 headquarters
for the system.
2. Removes STRS from the systems for which the PERS Board
has the authority to acquire property.
Comments
This bill expands the geographic area in which STRS may
locate its headquarters within metropolitan Sacramento to
include eastern Yolo County, and eliminates an unused
provision in existing law that authorizes the PERS Board to
lease, purchase, or construct offices for STRS' use.
Under the provisions of the Property Acquisition Law (Part
11 of Division 3, Title 2 of the Government Code), the
Director of the State 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.
Section 22375 of the Education Code specifically exempts
STRS from these provisions and allows the STRS Board to
lease, purchase or build an office building within
Sacramento County to serve as a headquarters facility for
STRS.
In 1984, the STRS Board purchased STRS' existing
headquarters building in East Sacramento, which has housed
STRS staff for the last twenty years.
The STRS headquarters facility has been held in the real
estate investment portfolio of the STRS Fund since its
acquisition. At various times in the past, STRS has leased
space in its East Sacramento headquarters to both
governmental and private entities to generate additional
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revenue for the STRS Fund. As with all STRS investments in
real property in California, the STRS 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.
As a result of legislation enacted in recent years, STRS
has expanded its programs and operations to a point where
it is now occupying parts of three buildings in East
Sacramento. Consequently, the STRS Board directed STRS
staff to evaluate the System's long-term facility needs
that will allow the System to consolidate its operations to
provide a more efficient administration of STRS. After
narrowing the number of possible locations for a new
headquarters facility, STRS staff is nearing a point in the
planning process where a recommendation will be made to the
Board.
While existing law allows the STRS Board to lease, purchase
or build office space within Sacramento County to serve as
a headquarters facility for STRS, there may be properties
outside of Sacramento County, but within metropolitan
Sacramento, that best meet the administrative needs of STRS
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 STRS Board
may be unable to choose an alternative that provides the
best combination of improvements to member service and
returns to the STRS 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 State
Department of 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 State Department of Corrections and other specified
state agencies.
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This bill also eliminates an unused provision in existing
law that allows the PERS Board to lease, purchase, or build
offices for STRS' use. This provision, enacted in 1977,
anticipated PERS would include STRS in its new headquarters
building which became Lincoln Plaza in downtown Sacramento,
however, with the passage of Chapter 1429 and STRS'
purchase of a headquarters building in 1984, the need for
this authorization has long passed. PERS staff has
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/17/04)
State Teachers' Retirement System (source)
Chief Probation Officers of California
Yolo County Board of Supervisors
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Calderon, Campbell, Canciamilla, Chan, Chavez, Chu,
Cogdill, Cohn, Corbett, Correa, Cox, Daucher, Diaz,
Dutra, Dutton, Dymally, Firebaugh, Frommer, Garcia,
Goldberg, Hancock, Harman, Haynes, Jerome Horton, Shirley
Horton, Houston, Jackson, Keene, Kehoe, Koretz, La Malfa,
La Suer, Laird, Leno, Leslie, Levine, Lieber, Liu,
Longville, Lowenthal, Maddox, Maldonado, Matthews,
McCarthy, Montanez, Mountjoy, Mullin, Nakanishi, Nakano,
Nation, Negrete McLeod, Pacheco, Parra, Pavley, Plescia,
Reyes, Richman, Ridley-Thomas, Runner, Salinas,
Samuelian, Simitian, Spitzer, Strickland, Vargas, Wesson,
Wiggins, Wolk, Wyland, Yee, Nunez
NOES: Steinberg
NO VOTE RECORDED: Maze, Oropeza
TSM:mel 6/18/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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