BILL NUMBER: AB 2651	CHAPTERED
	BILL TEXT

	CHAPTER  27
	FILED WITH SECRETARY OF STATE  JUNE 15, 2010
	APPROVED BY GOVERNOR  JUNE 15, 2010
	PASSED THE SENATE  JUNE 14, 2010
	PASSED THE ASSEMBLY  JUNE 14, 2010
	AMENDED IN SENATE  JUNE 3, 2010
	AMENDED IN ASSEMBLY  APRIL 19, 2010

INTRODUCED BY   Assembly Member Knight

                        FEBRUARY 19, 2010

   An act to amend 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, 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.
   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 bond act, the Controller shall first draw
warrants against the appropriation from the Veterans' Bonds 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.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  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
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' farm and home purchase 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 in Section 988.6 of the Military and Veterans
Code, and, to the extent moneys in that 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 for payment
of any remaining amount then due.
  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' 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 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. 3.  Section 998.402 of the Military and Veterans Code is
amended to read:
   998.402.  As used herein, the following 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. 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' 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.