§ 313. Management of funds. a. The funds of the police and fire
retirement system shall be managed in accordance with this section.

b. The comptroller shall be trustee of the several funds of the police
and fire retirement system. Such funds shall be invested by the
comptroller in securities in which he or she is authorized by law to
invest the funds of the state, except that he or she may invest in
obligations consisting of notes, bonds, debentures or equipment trust
certificates issued under an indenture, which are the direct obligations
of, or in the case of equipment trust certificates are secured by direct
obligations of, a railroad or industrial corporation, or a corporation
engaged directly and primarily in the production, transportation,
distribution, or sale of electricity, or gas, or the operation of
telephone or telegraph systems or waterworks, or in some combination of
them; provided the obligor corporation is one which is incorporated
under the laws of the United States, or any state thereof, or of the
District of Columbia, and said obligations shall be rated at the time of
purchase within the three highest classifications established by at
least two standard rating services. The maximum amount that the
comptroller may invest in such obligations shall not exceed thirty per
centum of the assets of the New York state police and fire retirement
system's funds; and provided further that not more than two and one-half
per centum of the assets of the New York state police and fire
retirement system's funds shall be invested in the obligations of any
one corporation of the highest classification and subsidiary or
subsidiaries thereof, that not more than two per centum of the assets of
the New York state police and fire retirement system's funds shall be
invested in the obligations of any one corporation of the second highest
classification and subsidiary or subsidiaries thereof, that not more
than one and one-half per centum of the assets of the New York state
police and fire retirement system's funds shall be invested in the
obligations of any one corporation of the third highest classification
and subsidiary or subsidiaries thereof. He or she shall, however, be
subject to all terms, conditions, limitations and restrictions imposed
by this article and by law upon the making of such investments. The
comptroller shall have full power:

1. To hold, purchase, sell, assign, transfer or dispose of any of the
securities or investments, in which any of the funds of the police and
fire retirement system shall be invested, including the proceeds of such
investments and any monies belonging to such funds, and

2. In his or her name as trustee, to foreclose mortgages upon default
or to take title to real property in such proceedings in lieu thereof
and to lease and sell real property so acquired.

c. The comptroller annually shall credit to each of the funds of the
police and fire retirement system regular interest on the mean amount
therein for the preceding year.

d. The custody of all funds of the police and fire retirement system
shall be in the charge of the head of the division of the treasury of
the department of taxation and finance, subject to the supervision and
control of the commissioner of taxation and finance.

e. Payment of all pensions, annuities and other benefits shall be made
as provided in this article. For the purpose of meeting disbursements
for pensions, annuities and other payments ordered by the comptroller,
the head of such division may keep on deposit an available fund which
shall not exceed ten per centum of the total amount of the several funds
of the police and fire retirement system. Every such deposit shall be
kept only in a bank or trust company organized under the laws of this
state, or in a national bank located in this state, which shall furnish
adequate security therefor.

f. The comptroller, however, shall have a fund in his or her immediate
possession. Such fund shall be used for the immediate payment of:

1. All pensions, annuities and other benefits, and

2. Such expenses as may necessarily be incurred in acquiring,
servicing and foreclosing mortgages and in acquiring, managing and
protecting investments, and

3. Such special expenditures for which the police and fire retirement
system will be paid by the state or a participating employer. Such fund
shall be reimbursed from time to time by the head of such division on
the warrant of the comptroller.

g. Neither the comptroller nor any person employed on the work of the
police and fire retirement system shall:

1. Except as herein provided, have any interest, direct or indirect,
in the gains or profits of any investment of the police and fire
retirement system, nor, in connection therewith, directly or indirectly,
receive any pay or emolument for his or her services.

2. Except as provided in section three hundred fifty of this article:

(a) Directly or indirectly, for himself or herself or as an agent or
partner of others, borrow any of its funds or deposits or in any manner
use the same except to make such current and necessary payments as are
authorized by the comptroller, or

(b) Become an endorser, surety or an obligor in any manner of monies
loaned by or borrowed of such funds.

h. The police and fire retirement system may use a part of its funds,
not exceeding ten per centum of its assets, (1) for purchasing or
leasing of land in the city of Albany and the construction thereon of a
suitable office building or buildings for the transaction of the
business of the retirement system, (2) for purchasing or leasing of land
in the cities of Albany, Syracuse, Buffalo, Binghamton, New York,
Rochester and Utica and the construction thereon of a suitable office
building or buildings for purposes of lease or sale to the state, (3)
for purchasing or leasing of land in the city of Albany on the north and
south sides of Washington avenue commonly known as the "Campus Site"
acquired by the state for a state building site pursuant to the
provisions of chapter five hundred seventy-two of the laws of nineteen
hundred forty-seven and the construction thereon of power plants
including service connections, electric substations including service
connections, garages, warehouses and restaurant facilities deemed
necessary for the efficient and economical operation of the office
building or buildings constructed on such land and (4) for purchasing or
leasing of land in the city of Albany acquired by the state for suitable
parking facilities for the use primarily of employees of the state and
persons having business with state departments and state agencies and
the construction thereon of such structures, appurtenances and
facilities deemed necessary for the efficient and economical operation
of the parking facilities constructed on such land and (5) for
purchasing or leasing of land in locations approved by the state
university trustees and the construction, acquisition, reconstruction,
rehabilitation or improvement of suitable buildings or facilities
thereon for purposes of lease or sale to the state university
construction fund, such buildings or facilities to be used by the state
university or by state-operated institutions or statutory or contract
colleges under the jurisdiction of the state university or by the
students, faculty and staff of the state university or of any such
state-operated institution or statutory or contract college, and their
families.

The police and fire retirement system from time to time may lease to
any public agency any portion of a building constructed for the
transaction of its business which may not be required for such purpose,
upon such terms and conditions as shall be deemed to be for the best
interest of the police and fire retirement system.

Real property of the police and fire retirement system acquired or
constructed pursuant to this subdivision shall be exempt from taxation.

i. At the close of each fiscal year, the average rate of investment
earnings of the retirement system shall be computed by the actuary and
certified to the comptroller. This rate shall be determined from the
investment earnings during the calendar year which ended three months
prior to the close of the fiscal year. For any year that such average
rate of earnings is in excess of three per centum but not in excess of
four per centum, the comptroller shall declare a rate of special
interest, for members earning regular interest of three per centum,
equal to the difference between such average rate of earnings and three
per centum, expressed to the lower one-tenth of one per centum, but not
in excess of one per centum. For any year, commencing with the fiscal
year the first day of which is April first, nineteen hundred seventy,
that such average rate of earnings is in excess of four per centum, the
special rate of interest for members earning regular interest of three
per centum shall be equal to the difference between such average rate of
earnings and three per centum, expressed to the lower one-tenth of one
per centum, but not in excess of two per centum, and for members earning
regular interest of four per centum, it shall be the difference between
such average rate of earnings and four per centum, expressed to the
lower one-tenth of one per centum, but not in excess of one per centum.
Special interest at such rates, shall be credited, by the comptroller at
the same time that regular interest is credited, to the individual
annuity savings accounts of persons who are members as of the close of
the fiscal year. Special interest shall not be considered in determining
rates of contribution of members. In the case of persons who last became
members on or after July first, nineteen hundred seventy-three, the
provisions of this subdivision shall apply only to the fiscal years
beginning April first, nineteen hundred seventy-two and ending March
thirty-first, nineteen hundred seventy-three.

j. The retirement system may invest, within the limitations authorized
for investments in conventional mortgages, a part of its funds in first
mortgages on real property located anywhere within the boundaries of the
United States and leased to the government of the United States,
provided however, that no such investment shall be made unless the terms
of the mortgage shall provide for amortization payments in an amount
sufficient to completely amortize the loan within the period of the
lease.