BILL ANALYSIS Ó
AB 1084
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CONCURRENCE IN SENATE AMENDMENTS
AB 1084 (Davis)
As Amended September 2, 2011
2/3 vote. Urgency
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|ASSEMBLY: |72-0 |(May 23, 2011) |SENATE: |37-0 |(September 7, |
| | | | | |2011) |
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Original Committee Reference: V.A.
SUMMARY : Expands, in the context of the California Veteran Home
Loan Program (CVHLP), the definition of cooperative housing
corporation to include a shared equity cooperative. This bill
would permit CVHLP to make loans for shared equity cooperatives.
The Senate amendments :
1)Repeal the California National Guard Members' Farm and Home
Purchase Act of 1978, to be effective in thirty days from the
effective date of the measure, except as provided.
2)Repeal the California National Guard Members' Revenue Bond Act
of 1978 to be effective in thirty days from the effective date
of the measure, except as provided.
3)Transfer all moneys in the National Guard Home Loan Fund and
the National Guard Members' Revenue Bond Revenue Account that
are not needed to meet revenue bond obligations to the CalVet
Home Loan Fund within thirty days from the effective date of
the measure.
4)Provide that any future revenue that would be deposited into
the National Guard Home Loan Fund instead be directed to the
CalVet Home Loan Fund.
5)Appropriate, all moneys deposited into the CalVet Home Loan
Fund.
6)Include "shared equity cooperative" within the definition of
"cooperative housing corporations" to authorize the use of the
CVHLP for shared equity cooperative purchases; and, outline
administrative procedures regarding the program.
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7)Require the Department of Veterans Affairs ("Department") to
continue to administer any outstanding loans made pursuant to
the National Guard Members' Home Loan Program.
8)Add several administrative requirements concerning conditions
for and administration of loans made under this authority.
9)Change the conditions under which the Department may acquire
an interest in land held by a Native American veteran.
10)Add an urgency clause.
EXISTING LAW: Existing law provides for farm and home purchase
benefits for qualifying veterans under the Veterans' Farm and
Home Purchase Act of 1943, and subsequent acts. Existing law
defines "cooperative housing corporation" for purposes of this
program to mean a real estate development in which membership in
the corporation, by stock, is coupled with the exclusive right
to possess a portion of the real property.
AS PASSED BY THE ASSEMBLY , this bill contained similar
provisions and intent, but the current version has greater
detail and includes new provisions concerning the National Guard
Members' Farm and Home Purchase Act and funds remaining therein
which will be used for cooperative housing loans.
FISCAL EFFECT : According to the Senate Appropriations
Committee, for the portion of the bill concerning shared equity
cooperative loans, costs are unknown but potentially
significant. Costs associated with funds consolidation are
approximately $9,800. The CVHLP is funded from general
obligation bonds that are repaid through monthly mortgage
payments. The program has no General Fund costs. While this
bill will expand the use of the funds which will likely deplete
the account sooner and potentially require future bond sales,
there is currently about $1 billion available in the home loan
fund.
COMMENTS : The Department administers CVHLP pursuant to
statutory authority. The stated objective of the program is to
provide veterans with the opportunity to acquire farms and
homes.
Co-op housing is a form of home ownership in which a corporation
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owns residential property, typically a condominium style
property. Owners purchase a share in the corporation which
gives them an exclusive right to occupy a particular unit owned
by the corporation. A shared equity co-op is similar to a
regular co-op except that a portion of the corporation is owned
by a non-profit who "shares" the unit with the buyer/homeowner.
Purchase of the shared equity units is limited to defined
low-income buyers, seniors, families, veterans, etc. When the
homeowner sells, a portion of the equity gain is shared with the
non-profit partner. Shared equity co-ops provide low income
individuals and families the opportunity to become homeowners.
The National Guard Members' Farm and Home Purchase Act was
established in 1978 and the bond funds were used to provide home
loans to members of the California National Guard who were not
eligible for the CVHLP at that time. The program has not been
operative for several years and there are currently only four
outstanding loans. This bill will transfer the remaining money
in the National Guard loan fund to the CalVet Home Loan Fund so
that the money can be used to provide loans for shared equity
cooperative housing. Expanding the use of the CVHLP to shared
equity cooperatives is intended to provide an additional path
for low income veterans to become homeowners.
This bill has been substantially amended since it left the
Assembly. However, the amendments are technical, aligned with,
and necessary to carry out the purposes and subject matter which
were heard and approved in the Assembly.
The bill contains an urgency clause allowing the bill to take
effect immediately upon enactment.
Analysis Prepared by : John Spangler / V. A. / (916) 319-3550
FN: 0002819