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F I S C A L I M P A C T R E P O R T

SPONSOR Lujan, B

DATE TYPED 02/25/05 HB 1045

SHORT TITLE New PERA Office Building

SB

ANALYST Geisler

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

.01 See Narra-

tive

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to: SJR 17

SOURCES OF INFORMATION

Public Employees Retirement Association (PERA)

General Services Department (GSD)

SUMMARY

Synopsis of Bill

House Bill 1045 amends the PERA Act to authorize the PERA Board to acquire land and con-

struct a new building to house the association if the existing PERA Building is sold. HB 1045

provides authority to use the proceeds of the sale of the existing PERA Building to design and

construct a new building for PERA, which will be held as a trust asset in PERA’s name.

Significant Issues

If the existing PERA Building and surrounding property is sold, HB 1045 will give the PERA

Board authority to use the proceed of the sale for purchasing land and construction of a new

building to house the association.

FISCAL IMPLICATIONS

No fiscal impact, unless the PERA building is sold and the board undertakes construction of a

House Bill 1045 -- Page 2

new building.

CONFLICT, DUPLICATION, COMPANIONSHIP OR RELATIONSHIP

A companion bill, Senate Joint Resolution 17, gives GSD the prior authorization to trade or sell

property it owns in Santa Fe County to the PERA Board for construction of or alteration of an

office building to house the association if the existing PERA Building is sold. HB 1045 gives

the PERA Board statutory authority to acquire land from GSD through the purchase or land trade

provisions of Senate Joint Resolution 17.

OTHER SUBSTANTIVE ISSUES

In 1965, an act was passed authorizing the PERA Board to use the PERA trust fund to acquire, in

the name of PERA, land adjacent to the state capitol grounds and build thereon a building to

house the association and its employees. The law further directed PERA to give first priority to

public agencies in leasing such space in the PERA Building as was not needed for PERA’s own

use. Laws of 1965, Chapter 210. The provisions of the 1965 law are still codified in the PERA

Act. NMSA 1978, § 10-11-130(A)(8). The PERA Building and grounds are held on PERA’s

books as an investment of the PERA trust fund. Pursuant to both the PERA Act and Article XX,

§22, of the New Mexico Constitution, the PERA Board is the trustee of the PERA fund and is

responsible for administering trust investments.

The PERA Board and Capitol Building Planning Committee have begun substantive negotiations

regarding sale of the PERA building and grounds. If the PERA Board successfully negotiates a

sale of its existing Building and surrounding grounds, PERA will be required to relocate to an-

other location. The PERA Building and property is held on PERA’s books as an investment as-

set of the PERA trust fund and is its only permissible real estate investment. HB 1045 gives the

PERA Board statutory authority to acquire land for construction of a new building to house

PERA and its employees, which will be held in PERA’s name, in fee simple, as an investment

asset.

HB 1045 authorizes the PERA Board to use the proceed of the sale of its existing Building and

property, or any other funds under its control (use of which is permissible by law) to purchase

land and to plan, design, construct a new building for PERA.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The PERA Board will not have explicit statutory authority to use the proceeds of the sale of the

existing PERA Building to acquire land and construct a new building if and when the PERA

Board negotiates a sale with the Capitol Buildings Planning Commission. If authority is not

given to the PERA Board to purchase land and construct its own facility, negotiations for the sale

of PERA’s current property may cease.

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