If the property is rented or leased to the State, it shall be on terms calling for
level periodic rental payments, not more than 1 year apart, in such amounts as will
amortize the total actual cost of the investment, including cost of land, construction,
improvement and supervision of construction, over a period of 20 years from the beginning
of the term of its first rental, together with income to be derived therefrom for
the benefit of the fund at such rate not in excess of 6% per annum, as shall be fixed
by the Director of the Division of Investment and approved by the board of trustees,
on the depreciated value of the asset which shall be its total actual cost to the
fund less a depreciation allowance equal in amount to the aggregate sums received
toward amortization of the investment. Such portion of the rentals as shall exceed the amounts received toward amortization
shall be treated as investment income.
It is the purpose of this section to provide for the accounting basis upon which the
real property investment shall be carried and depreciated and for the treatment, as
between capital and income, of the amounts received for the use of the property by
way of rental, in order to maintain the integrity and actuarial soundness of the funds
established by the “Public Employees' Retirement-Social Security Integration Act”
(P.L.1954, c. 84).
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