The board may, subject to and consistent with its fiduciary duty, establish a program utilizing the retirement fund to assist currently employed members and annuitants who are victims of a natural disaster to obtain loans from the retirement fund for the sole purpose of repairing or rebuilding their homes which have been damaged by a natural disaster. In order to qualify for a loan the home of the member or annuitant shall have been damaged by a natural disaster and the home shall have been in an area that has been declared a disaster area in a proclamation of the Governor of a state of emergency affecting the area in which the member or annuitant resides.

The board may lend any amount of money, up to and including 100 percent of the costs of repairing or rebuilding a home of a member or annuitant. However, 5 percent of the loan shall be secured by the contributions of the member who requests the loan.

The board may, under conditions it may deem prudent, require that a member or annuitant pledge other assets as collateral for a loan.

The board shall establish terms for the termination of loans made pursuant to this section upon the separation of members from service, to ensure, in the case of any default, that this system shall not suffer any loss, and to provide, as a condition of retirement, for alternative security. The board may impose other terms and conditions as the board may determine appropriate.

The Legislature hereby reserves full power and authority to change, revise, limit, expand, or repeal the loan program authorized by this section.

(Repealed and added by Stats. 1995, Ch. 379, Sec. 2. Effective January 1, 1996.)