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Ms. Theresa Lensander
The American Pension Company
136 W. Canon Perdido Street
Santa Barbara, California 93101
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2000-03A
ERISA Sec. 3(32)
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Dear Ms. Lensander:
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This is in response to your request for an advisory opinion regarding the
application of Title I of the Employee Retirement Income Security Act of
1974, as amended (ERISA). Specifically, you ask whether the Employees’
Money Purchase Pension Plan (the Money Purchase Plan) of the Housing
Authority of the City of Santa Barbara (the Housing Authority) is a
governmental plan within the meaning of section 3(32) of Title I of ERISA
and, therefore, excluded by section 4(b)(1) from coverage under that title.
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You advise that the Money Purchase Plan was established by the Housing
Authority for its employees effective January 1, 1972, and was amended and
restated effective April 1, 1987. Article X, Section I of the plan document
states that the Housing Authority is the Plan Administrator. Section G of
that article provides that the Housing Authority’s Board of Commissioners
may amend or terminate the plan and may appoint and replace members of the
Administrative Committee. Article X, Section H assigns certain
administrative duties to the Administrative Committee. Article III, Section
A of the plan document provides for the Housing Authority to contribute an
amount equal to 12% of each participating employee’s compensation.
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Your request contains the following additional facts and representations.
The Housing Authority was created as a housing authority pursuant to the
Housing Authorities Law codified commencing at section 34200 of the Health
and Safety Code of the State of California. Section 34201(c) of the
California Health & Safety Code provides, in part, “That the
clearance, replanning, and reconstruction of the areas in which insanitary
or unsafe housing conditions exist and the providing of safe and sanitary
dwelling accommodations for persons of low income are public uses and
purposes for which public money may be spent and private property acquired
and are governmental functions of state concern; . . . .” The California
Health & Safety Code authorizes a housing authority to “[p]repare,
carry out, acquire, lease, and operate housing projects” (Section
34312(a)), “[p]rovide for the construction, reconstruction, improvement,
alteration, or repair of all or part of any housing project” (Section
34312(b)), “[a]cquire any real property by eminent domain” (Section
34315(d)), “[c]onduct investigations, hear testimony, and take proof under
oath . . .” (Section 34318(a)), and “[a]dminister oaths, issue subpenas
requiring the attendance of witnesses or the production of books and papers
. . .” (Section 34318(b)). The real property of a housing authority is
exempt from “all taxes and special assessments of the State or any city,
county, or political subdivision of the State.” (Section 34401). Housing
authorities have the authority to issue bonds (Section 34350) and the bonds
and property of housing authorities are exempt from state taxation (Section
34400). Section 34203 of the California Health & Safety Code defines a
housing authority as a “public corporation.”
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Section 34240 provides that “ [i]n each county and
city there is a public body corporate and politic known as the housing
authority of the county or city.” That section further provides that
“[t]he authority shall not transact any business or exercise its powers
unless, by resolution, the governing body of the county or city declares
that there is need for an authority to function in it.” Section 34270
provides that, for a housing authority of a city, the mayor, if an elected
official, of the city shall appoint five persons as commissioners of the
authority and shall appoint an additional two commissioners who are
tenants of the authority if the authority has tenants. Appointments must
be confirmed by the governing body of the city. If the mayor is not an
elected office, the commissioners are appointed by the governing body
directly. Generally, commissioners are appointed for a term of four years
except that the tenant commissioners are appointed for a term of two
years. You represent that California state courts have found housing
authorities in California to be governmental agencies.(1)
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You state that, in the case of the Housing Authority, the City Council by
resolution dated June 10, 1969, declared there was a need for a housing
authority in the City of Santa Barbara and empowered the Housing Authority
to transact business and exercise its powers in accordance with Section
34240 of the California Health and Safety Code. Commissioners are appointed
by the Mayor of Santa Barbara and confirmed by the City Council. You further
advise that the Housing Authority is exempt from coverage under the Social
Security Act. You state that the Housing Authority is funded by rental
income, federal grants, and donations by the City of Santa Barbara. The
Housing Authority’s administrative costs are paid from rental income and
federal grants. The city’s donations are used for land acquisition and
development for rental units. You also state that the City of Santa Barbara
does not have budgetary authority over the Housing Authority.
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Section 4(b)(1) of Title I of ERISA excludes governmental plans from
coverage under that title. Section 3(32) defines the term “governmental
plan” to include “a plan established or maintained for its employees by
the Government of the United States, by the government of any State or
political subdivision thereof, or by any agency or instrumentality of any of
the foregoing.” According to the information provided, the Money Purchase
Plan was established and is maintained by the Housing Authority for its
employees and participation is limited to employees of the Housing
Authority. The Housing Authority is a public corporation established
pursuant to state statute. Its statutory purpose is to provide acceptable
public housing for low- income persons and families. The Housing Authority
exercises governmental powers, including the right of eminent domain and its
property and revenues are exempt from state and local taxation. Further, the
Housing Authority is controlled and supervised by the mayor and city council
of the City of Santa Barbara. It is therefore our opinion that the Housing
Authority is a governmental agency or instrumentality within the meaning of
ERISA section 3(32) and that the Money Purchase Plan is a governmental plan
within the meaning of that section. Accordingly, the Money Purchase Plan is
excluded from ERISA Title I coverage by ERISA section 4(b)(1).
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This letter constitutes an advisory opinion under ERISA Procedure 76-1, 41
Fed. Reg. 36281 (1976). Accordingly, this letter is issued subject to the
provisions of that procedure, including section 10 thereof, relating to the
effect of advisory opinions. This letter relates solely to the application
of the provisions of Title I of ERISA and is not determinative of any
particular tax treatment under the Internal Revenue Code.
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Sincerely,
John J. Canary
Chief, Division of Coverage, Reporting and Disclosure
Office of Regulations and Interpretations
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See People v. Holtzendorff (1960), 2
Cal.Rptr. 676, 177 C.A.2d 788, and Torres v. Board of Com’rs of
Housing Authority of Tulare County (App. 5 Dist. 1979) 152 Cal.Rptr.
506, 89 Cal.App.3rd 545.
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