BILL ANALYSIS
AB 498
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Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
Mary Salas, Chair
AB 498 (Hayashi) - As Amended: April 22, 2009
SUBJECT : Affordable housing: veterans.
SUMMARY : This bill would require the California Department of
Veterans Affairs (CDVA) to collaborate with the Department of
Housing and Community Development to facilitate the development
of multifamily housing for military veterans and their families.
Specifically, this bill :
1)Requires CDVA to take action to ensure that if land is donated
to the state for the express purpose of providing land for
military veterans' housing, or if the department receives
funding for a housing project restricted for the use of
military veterans, any such housing built on that land, or
using that source of funds, shall, only may be used only for
housing for military veterans.
2)Directs CDVA, in collaboration with the Department of Housing
and Community Development, not later than July 1, 2010, and
annually thereafter, to prepare and submit to the Legislature
a study evaluating the most effective ways to increase the
supply of affordable housing for military veterans and their
families.
3)Provides for submission of an amendment to the Veterans' Bond
Act of 2008 to the voters at the November 2, 2010, statewide
general election.
EXISTING LAW :
1)Creates the Multifamily Housing Program as an omnibus
multifamily housing program, and that it be based on the
department's existing California Housing Rehabilitation
Program.
2)Establishes the Veterans Farm and Home Purchases Act of 1974
(Act), the object of which is to enable veterans to acquire
farms and homes:
a) Provisions of the Act are administered by CDVA through
the CalVet Home Loan Program;
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b) Uses State of California Veterans General Obligation
Bonds (referred to as QVMB in federal law) to finance loans
to eligible veterans;
c) The program purchases homes and farms for resale to the
eligible veterans under a Contract of Sale.
FISCAL EFFECT : Unknown.
COMMENTS : The author states that it is the intent of this
legislation to provide a multi-family housing product to
veterans operated by CDVA. However a part of this legislative
effort will send the recently voter approved General Obligations
bond that provided 900 million dollar to the CalVet Farm and
Home Loan program back to the voters for amendment. Since 1921,
the voters in California have approved approximately $8.8
billion of general obligation bond sales to finance the
veterans' farm and home purchase (Cal-Vet) program. The last
bond measure approved for the Cal-Vet Program was in November
2008 in the amount of $900 million. The amendment would allow
for a portion of the proceeds to be utilized for multi-family
housing.
Veterans' bonds have always been structured as to not endanger
the General Fund. Veterans bonds differ from most because the
debt is not serviced from the General Fund. Money is raised for
the loan program by selling the bonds. Then both the principle
and the debt service are paid by the veteran mortgagors' monthly
mortgage payments.
Until last year CalVet Farm and Home Loan program was limited to
Vietnam era vets who separated from the service prior to 1977.
Federal law now allows all veterans access to this loan program.
On June 17th the Heroes Earnings Assistance and Relief Tax
(HEART) Act of 2008 was signed into law. As for qualified
veterans' mortgage bonds issued in California or Texas, the
HEART Act repeals the requirement in those states that veterans
must have served before 1977 and reduces the eligibility period
to 25 years (rather than 30 years) following release from
military service. This change opens up this home loan program
to a vastly larger number of veterans. In prior years CalVet
Farm and Home Loan program used "unrestricted dollars"
(generated by the early pay off of bonds and by unused default
reserves) to fund loans for post 1977 veterans.
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Title 26 sections 143 (b) of the U.S. code govern the tax exempt
status of the state bonds issued under the authority of the
qualified veterans mortgage bond programs which is operated by
only five states. These funds are to be used to provide low
interest single-family mortgage loans for permanent financing of
owner-occupied homes. The Internal Revenue Code and its
regulations impose a number of requirements upon recipients of
loans which are fund from QVMB funds.
On June 17th the Heroes Earnings Assistance and Relief Tax
(HEART) Act of 2008 was signed into law. As for qualified
veterans' mortgage bonds issued in California or Texas, the
HEART Act repeals the requirement in those states that veterans
must have served before 1977 and reduces the eligibility period
to 25 years (rather than 30 years) following release from
military service. This change opens up this home loan program
to a vastly larger number of veterans.
There are also numerous housing policy questions that revolve
around the type of housing proposed and the viability of that
housing as it relates to services needed by veterans. Due to
the late nature of the amendments and the depth of the subject
matters contained within this bill, the author may want to
delete the sections of the bill relating to CalVet Farm and Home
Loan program.
Previous Legislation:
SB 1220 (Cedillo, Statutes of 2008) (AB 1818/Fuentes) -
Restricts occupancy of supportive housing projects to veterans
when the land on which the property is built is either owned or
leased by the US or California stipulates that vets-only
supportive housing
AB 1594 (Committee on Veterans Affairs, Statutes of 2003)
acknowledged the need for a nexus between veteran status and
services and allows HCD to award Emergency Housing and
Assistance Program funds to shelters that restrict occupancy to
veterans if the veterans served possess significant barriers to
social reintegration and employment, requiring specialized
treatment, and the housing provider provides those specialized
services to address those needs.
AB 2670 (Salas, Statutes of 2008): Requires the California
Department of Veterans Affairs (CDLAC) to apply to the
California Debt Limit Allocation Committee for the issuance of a
private activity bond under the qualified residential rental
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project program
Current Legislation:
AB 1330 (Salas): Authorizes the California Department of
Veterans Affairs (CDVA) to establish a pilot project for the
purpose of operating a cooperative housing project, in which
CDVA would prescribe the rules, regulations, and conditions
necessary to implement the pilot project.
AB 702 (Salas): Re-authorize the existing EHAP program which
provides operational grants to homeless shelters and
transitional housing providers.
AB 716 (Huber): Requires the California Department of Veterans
Affairs (CDVA) to establish a veteran data exchange system and
enter into memorandums of understanding or interagency
agreements with other state agencies and departments to
ascertain the veteran status of all persons receiving services,
benefits, or assistance from those state agencies and
departments.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Veteran Service Agencies
Corporation for Supportive Housing
Housing California
Opposition
None on file.
Analysis Prepared by : Eric Worthen / V. A. / (916) 319-3550