AB 2651 Assembly Bill

BILL NUMBER: AB 2651	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 3, 2010
	AMENDED IN ASSEMBLY  APRIL 19, 2010

INTRODUCED BY   Assembly Member Knight

                        FEBRUARY 19, 2010

   An act to amend  Sections 16757 and   Section
 16773 of the Government Code, to amend Sections 998.402 and
998.404 of, and to add Section 988.6 to, the Military and Veterans
Code, relating to veterans  , and declaring the urgency thereof,
to take effect immediately  .



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2651, as amended, Knight. Veterans farm and home purchases:
bond acts.
   Existing law authorizes the Department of Veterans Affairs to
provide home and farm purchase loans to veterans and to utilize the
proceeds from state general obligation bonds issued and sold for
these purposes.
   This bill would create in the State Treasury a revolving special
fund known as the Veterans' Bonds Payment Fund, which moneys would be
used solely to pay debt service, as defined, on bonds issued
pursuant to all veterans  '  farm and home purchase bond
acts, as specified, and all moneys in this fund would be continuously
appropriated for this purpose. The bill would also authorize moneys
in the Veterans' Bonds Payment Fund to be transferred to an account
within the Refunding Escrow Fund  for the purposes of paying debt
service  , as prescribed.  This bill would prohibit moneys
from being borrowed or transferred from the Veterans' Bonds Payment
Fund to the General Fund or the General Cash Revolving Fund, as
specified. 
   The Veterans' Bond Act of 2008 (hereafter the act) authorizes, for
purposes of financing a specified program for farm, home, and
mobilehome purchase assistance for veterans, the issuance, pursuant
to the State General Obligation Bond Law, of bonds in the amount of
$900,000,000. The act requires specified payments required to be
remitted for the payment of debt service on the bonds in each fiscal
year, to be transferred to the General Fund to pay the debt service
on all of the money in the fund.  Existing law does not grant a
lien on the Veterans' Farm and Home Building Fund or the money
therein to the holder of any bonds issued under the act   .

   This bill would instead require those payments to be transferred
to the Veterans' Bonds Payment Fund, rather than to the General Fund.
 This bill would not grant a lien on the Veterans' Farm and Home
Building Fund, the Veterans' Bonds Payment Fund, or the money
therein to the holder of any bonds issued under the act. 

   Existing law requires the proceeds of each sale of bonds, and the
amount that may have been paid as accrued interest on the bonds, to
be paid over by the Treasurer into the fund. Under existing law, all
money deposited in the fund that is derived from premium and accrued
interest on bonds sold is required to be reserved in the fund and
available for transfer to the General Fund, as provided, except that
amounts derived from premiums on the bonds may be used to pay costs
of issuance of the bonds, as specified, prior to transfer to the
General Fund.  
   This bill would provide that the moneys described above that are
deposited in the Veterans' Farm and Home Building Fund of 1943 shall
be available for transfer to the Veterans' Bond Payment Fund.

   Under existing law, whenever any payment of principal of any bonds
becomes due, either upon the maturity of any of the bonds or upon
the redemption thereof prior to maturity, and whenever any interest
on any of the bonds falls due, warrants shall be drawn against the
appropriation made by the bond act from the General Fund by the
Controller in favor of the Treasurer, or state fiscal agents, or
other duly authorized agents, pursuant to claims filed with the
Controller by the Treasurer, in the amounts falling due.
   This bill would provide that for any of the above payments  of
debt service  , with respect to any bonds issued pursuant to a
veterans  '  farm and home purchase  account
  bond act  , the Controller shall first draw
warrants against the  appropriation from the  Veterans' Bond
Payment Fund, and, to the extent moneys in the fund are insufficient
to pay the amount  of debt service then  due, shall draw
warrants against the  appropriation made by the bond act from the
 General Fund. 
   This bill would declare that it is to take effect immediately as
an urgency statute. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 16757 of the Government Code
is amended to read:
   16757.  (a) The proceeds of each sale of bonds, and the amount
that may have been paid as accrued interest on the bonds, shall be
forthwith paid over by the Treasurer into the fund.
   (b) All money deposited in the fund pursuant to this section that
is derived from premium and accrued interest on bonds sold shall be
reserved in the fund and shall be available for transfer to the
General Fund as provided in the bond act, except that amounts derived
from premium on the bonds may be used to pay costs of issuance of
the bonds, as provided in Section 16724.5, and in subdivisions (d)
and (e) of Section 16727, prior to transfer to the General Fund.
Moneys described in the prior sentence that are deposited in the
Veterans' Farm and Home Building Fund of 1943, created by Section 988
of the Military and Veterans Code, shall be available for transfer
to the Veterans' Bond Payment Fund created pursuant to Section 988.6
of the Military and Veterans Code. 
   SEC. 2.   SECTION 1.   Section 16773 of
the Government Code is amended to read:
   16773.  Whenever any payment of principal of any bonds shall
become due, either upon the maturity of any of the bonds or upon the
redemption thereof prior to maturity, and whenever any interest on
any of the bonds shall fall due, warrants shall be drawn against the
appropriation made by the bond act from the General Fund by the
Controller in favor of the Treasurer, or state fiscal agents, or
other duly authorized agents, pursuant to claims filed with the
Controller by the Treasurer, in the amounts so falling due. For any
 such  payments  of debt service, as defined in
subdivision (c) of Section 998.404 of the   Military and
Veterans Code,  with respect to any bonds issued pursuant to a
 veterans   veterans'  farm and home
purchase  account   bond act  adopted
pursuant to  Chapter 6 (commencing with Section 980) of Division
4 of  the Military and Veterans Code, the Controller shall first
draw warrants against the  appropriation from the  Veterans'
Bonds Payment Fund  created by   in 
Section 988.6 of the Military and Veterans Code, and, to the extent
moneys in that fund are insufficient to pay the  amount due,
shall draw warrants against the General Fund.   amount
of debt service then due, shall draw warrants against the
appropriation made by the bond act from the General Fund for payment
of any remaining amount then due. 
   SEC. 3.   SEC. 2.   Section 988.6 is
added to the Military and Veterans Code, to read:
   988.6.  (a) There is hereby created in the State Treasury a
revolving special fund known as the Veterans' Bonds Payment Fund. All
moneys in this fund shall be used solely to pay debt service, as
this term is defined in subdivision (c) of Section 998.404,  when
due  on bonds issued pursuant to all  veterans
  veterans'  farm and home purchase bond acts
pursuant to this chapter, and  notwithstanding Section  
13340 of the Government Code,  all moneys in this fund are
continuously appropriated for this purpose.
   (b) All moneys in the Veterans' Bonds Payment Fund are necessary
for immediate use and no amounts of this fund shall be considered
"surplus money," for the purposes of Section 16470 of the Government
Code.
   (c) Moneys in the Veterans' Bonds Payment Fund shall be used
solely as described in subdivision (a), and therefore no moneys in
that fund shall be  transferred for use as described in
  borrowed by, or transferred to, the General Fund
pursuant to  subdivision (a) of Section 16310  of the
Government Code or any other similar authority, or to the General
Cash Revolving Fund pursuant to Section 16381 of the Government Code
or any other similar authority  .
   (d) Moneys in the Veterans' Bonds Payment Fund may be transferred
to an account within the Refunding Escrow Fund created by Section
16784 of the Government Code  for the purposes of paying debt
service, as defined in subdivision (c) of Section 998.404, in
connection with the refunding of bonds issued pursuant to veterans'
farm and home purchase bond acts pursuant to  this chapter
 .
   SEC. 4.   SEC. 3.   Section 998.402 of
the Military and Veterans Code is amended to read:
   998.402.  As used herein, the following  words 
 terms  have the following meanings:
   (a) "Board" means the Department of Veterans Affairs.
   (b) "Bond" means  a  veterans' bond, a state general
obligation bond, issued pursuant to this article adopting the
provisions of the State General Obligation Bond Law.
   (c) "Bond act" means this article authorizing the issuance of
state general obligation bonds and adopting the State General
Obligation Bond Law by reference.
   (d) "Committee" means the Veterans' Finance Committee of 1943,
established by Section 991.
   (e) "Fund" means the Veterans' Farm and Home Building Fund of
1943, established by Section 988.
   (f) "Payment Fund" means the Veterans' Bonds Payment Fund
established by Section 988.6.
   SEC. 5.   SEC. 4.   Section 998.404 of
the Military and Veterans Code is amended to read:
   998.404.  (a) All bonds authorized by this article, when duly sold
and delivered as provided herein, constitute valid and legally
binding general obligations of the State of California, and the full
faith and credit of the State of California is hereby pledged for the
punctual payment of both principal and interest thereof.
   (b) There shall be collected annually, in the same manner and at
the same time as other state revenue is collected, a sum of money, in
addition to the ordinary revenues of the state, sufficient to pay
the principal of, and interest on, these bonds as provided herein,
and all officers required by law to perform any duty in regard to the
collection of state revenues shall collect this additional sum.
   (c) On the dates on which funds are to be remitted pursuant to
Section 16676 of the Government Code for the payment of debt service
on the bonds in each fiscal year, there shall be transferred to the
Payment Fund to pay the debt service all of the money in the fund,
not in excess of the amount of debt service then due and payable. If
the money transferred on the remittance dates is less than debt
service then due and payable, the balance remaining unpaid shall be
transferred to the General Fund out of the fund as soon as it shall
become available, together with interest thereon from the remittance
date until paid, at the same rate of interest as borne by the bonds,
compounded semiannually. Notwithstanding any other provision of law
to the contrary, this subdivision shall apply to all 
veterans   veterans'  farm and home purchase bond
acts pursuant to this chapter. This subdivision does not grant any
lien on the fund  , the Payment Fund,  or the moneys therein
to the holders of any bonds issued under this article. For the
purposes of this subdivision, "debt service" means the principal
(whether due at maturity, by redemption, or acceleration), premium,
if any, or interest payable on any date with respect to any series of
bonds. This subdivision shall not apply, however, in the case of any
debt service that is payable from the proceeds of any refunding
bonds.
   SEC. 5.   This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to save the state five hundred thousand dollars
($500,000) in debt interest payment costs, it is necessary that this
act go into immediate effect.