BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           2087 (Torres)
          
          Hearing Date:  07/15/2010           Amended: 04/19/2010
          Consultant:  Maureen Ortiz      Policy Vote: VA 4-0
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          ____
          BILL SUMMARY:   AB 2087 expands the definition of "home" for  
          purposes of the CalVet Home Loan Program to include a residence  
          of two to four units which are occupied only by veterans and  
          their families.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
                                                                  
          Home loan expansion        ------unknown, potentially over $150  
          annually---    Special*

          *Cal-Vet Home Loan Fund
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          ____
          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense file.
          
          There is currently over $900 million available in the Cal-Vet  
          Home Loan Fund which is used to assist veterans in purchasing  
          home, farms, condominiums, and mobile homes.  The effect of  
          expanding the eligibility of the use of those funds to  
          multi-unit housing is unknown, but it would diminish the amount  
          of money available for these purposes at a much quicker pace.

          This bill is intended to conform to Internal Revenue Code  
          Section 143(k)(7) which defines a single-family residence to  
          include a residence of two to four units, and furthers that  
          definition to require that all units must be occupied by  
          veterans and their families.

          By expanding the definition of home to include two to four  
          multi-family units, this bill is intended to permit veterans to  
          collectively purchase a duplex or four-plex so that they can  
          live in a supportive environment.











          The program is operated by the Department of Veterans Affairs  
          which purchases a new or existing home that has been selected by  
          the eligible veteran, and then resells the property to that  
          veteran.  The monthly payments are set in an amount sufficient  
          to do all of the following:  1) reimburse the department for its  
          costs in purchasing the farm,  home, or mobile home, 2) cover  
          all costs resulting from the sale of the bonds, including  
          interest on the bonds, and 3) cover the costs of operating the  
          program. The Cal-Vet Home Loan Program has been funded through a  
          series of voter-approved, self-supporting bonds - the latest  
          being one in the amount of $900 million approved under the  
          Veterans Bond Act of 2008 (Proposition 12).

          AB 1330, Chapter 524 Statutes of 2009, authorized the Department  
          of Veterans Affairs to establish a pilot project for the purpose  
          of establishing one cooperative housing project.  AB 2087 would  
          enable veterans to purchase homes consisting of two to four  
          units which could ultimately be used for cooperative housing.