California Legislature—2013–14 Regular Session

Assembly BillNo. 639


Introduced by Assembly Member John A. Pérez

(Principal coauthors: Assembly Members Atkins and Muratsuchi)

February 20, 2013


An act to amend Section 51005 of the Health and Safety Code, and to amend Section 998.403 of, and to add Article 5y (commencing with Section 998.540) to Chapter 6 of Division 4 of, the Military and Veterans Code, relating to the financing of a program to provide housing to veterans through the issuance and sale of bonds of the State of California and by providing for the handling and disposition of those funds, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 639, as introduced, John A. Pérez. Veterans Housing and Homeless Prevention Act of 2014.

Existing law, the Veterans’ Bond Act of 2008, as approved by the voters, authorizes the issuance of bonds in the amount of $900,000,000, pursuant to the State General Obligation Bond Law, for purposes of financing the Cal-Vet program for farm, home, and mobilehome purchase assistance for veterans.

This bill would amend the Veterans’ Bond Act of 2008 to reduce the amount of bonds that are authorized to be issued under the act from $900,000,000 to $300,000,000. The bill would instead authorize the issuance of bonds in the amount of $600,000,000, as specified, for expenditure by the Department of Housing and Community Development for purposes of the construction, rehabilitation, and preservation of multifamily housing for veterans, in collaboration with the Department of Veterans Affairs. The bill would authorize the Legislature to amend the provisions of this act, by majority vote, under specified criteria. The bi8ll would impose a specified reporting requirement on the California Housing Finance Agency.

The bill would provide for submission of its provisions to the voters at the November 4, 2014, general election, as specified.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 51005 of the Health and Safety Code is
2amended to read:

3

51005.  

(a) The agency shall, by November 1 of each year,
4submit an annual report of its activities under this division for the
5preceding year to the Governor, the Secretary of the Business and
6Transportation Agency, the Director of Housing and Community
7Development, the Treasurer, the Joint Legislative Budget
8Committee, the Legislative Analyst, and the Legislature. The report
9shall set forth a complete operating and financial statement of the
10agency during the concluded fiscal year. The report shall specify
11the number of units assisted, the distribution of units among the
12metropolitan, nonmetropolitan, and rural areas of the state, and
13shall contain a summary of statistical data relative to the incomes
14of households occupying assisted units, the monthly rentals charged
15to occupants of rental housing developments, and the sales prices
16of residential structures purchased during the previous fiscal year
17by persons or families of low or moderate income. The report shall
18also include a statement of accomplishment during the previous
19year with respect to the agency’s progress, priorities, and
20affirmative action efforts. The agency shall specifically include in
21its report on affirmative action goals, statistical data on the numbers
22and percentages of minority sponsors, developers, contractors,
23subcontractors, suppliers, architects, engineers, attorneys, mortgage
24bankers or other lenders, insurance agents, and managing agents.

25(b) The report shall also include specific information evaluating
26the extent to which the programs administered by the agency have
27attained the statutory objectives of the agency, including, but not
28limited to, (1) the primary purpose of the agency in meeting the
P3    1housing needs of persons and families of low or moderate income
2pursuant to Section 50950, (2) the occupancy requirements for
3very low income households established pursuant to Sections
450951 and 51226, (3) the elderly and orthopedic disability
5occupancy requirements established pursuant to Section 51230,
6(4) the use of surplus moneys pursuant to Section 51007, (5) the
7metropolitan, nonmetropolitan, and rural goals established pursuant
8to subdivision (h) of Section 50952, (6) the California Statewide
9Housing Plan, as required by Section 50154, (7) the statistical and
10other information developed and maintained pursuant to Section
1151610, (8) the number of manufactured housing units assisted by
12the agency, (9) information with respect to the proceeds derived
13from the issuance of bonds or securities and any interest or other
14increment derived from the investment of bonds or securities, and
15the uses for which those proceeds or increments are being made
16as provided for in Section 51365, including the amount by which
17each fund balance exceeds indenture requirements, (10) any
18recommendations described in subdivision (d), (11) any
19recommendations described in Section 51227, (12) the revenue
20bonding authority plan adopted pursuant to Section 51004.5, (13)
21the statistical and other information required to be provided
22pursuant to Section 50156, (14) an analysis of the agency’s
23compliance with the targeting requirements of subsection (d) of
24Section 142 of the Internal Revenue Code of 1986 (26 U.S.C. Sec.
25142) with respect to any issue of bonds subject to those
26requirements under Section 103 of the Internal Revenue Code of
271986 (26 U.S.C. Sec. 103), including the numbers of rental units
28subject to this reporting requirement by categories based on the
29number of bedrooms per unit, and (15) the statistical and other
30information relating to congregate housing for the elderly pursuant
31to Section 51218.

32The agency may, at its option, include the information required
33by this section in a single document or may separately report the
34statistical portion of the information in a supplement appended to
35its annual report. This statistical supplement shall be distributed
36with copies of the agency’s annual report, but need not be provided
37to bond rating agencies, underwriters, investors, developers, or
38financial institutions.

39(c) The agency shall cause an audit of its books and accounts
40with respect to its activities under this division to be made at least
P4    1once during each fiscal year by an independent certified public
2accountant and the agency shall be subject to audit by the
3Department of Finance not more often than once each fiscal year.

4(d) The agency shall assess any obstacles or problems that it
5has encountered in meeting its mandate to serve nonmetropolitan
6and rural metropolitan areas, and recommend legislative and
7administrative solutions to overcome these obstacles or problems.
8The agency shall separately assess its progress in meeting the
9rehabilitation needs of rural areas and the new construction needs
10of rural areas, and separately assess its progress as to single and
11multifamily units. The agency shall include in its report a
12quantification and evaluation of its progress in meeting the housing
13needs of communities of various sizes in rural areas.

14(e) By December 1 of each fiscal year, the agency shall ascertain
15that not less than 25 percent of the total units financed by mortgage
16loans during the preceding 12 months pursuant to this part were
17made available to very low income households. If the agency finds
18that these very low income occupancy goals have not been met,
19the agency shall immediately notify the Governor, the Speaker of
20the Assembly, and the Senate Committee on Rules, and shall
21recommend legislation or other action as may be required to make
22(1) at least 25 percent of the units so available, and (2) at least 25
23 percent of the units thereafter financed so available. In housing
24developments for which the agency provides a construction loan
25but not a mortgage loan, the agency shall report annually on the
26percentage of units projected to be made available for occupancy
27and actually occupied by lower income households.

begin insert

28(f) The annual report required pursuant to this section shall
29also include an evaluation of any program established by the
30department pursuant to Article 5y (commencing with Section
31998.540) of Chapter 6 of Division 4 of the Military and Veterans
32Code.

end insert
33

SEC. 2.  

Section 998.403 of the Military and Veterans Code is
34amended to read:

35

998.403.  

For the purpose of creating a fund to provide farm
36and home aid for veterans in accordance with the Veterans’ Farm
37and Home Purchase Act of 1974 (Article 3.1 (commencing with
38Section 987.50)), and of all acts amendatory thereof and
39supplemental thereto, the committee may create a debt or debts,
40liability or liabilities, of the State of California, in the aggregate
P5    1amount of not more thanbegin delete nineend deletebegin insert threeend insert hundred million dollars
2begin delete ($900,000,000)end deletebegin insert ($300,000,000)end insert, exclusive of refunding bonds, in
3the manner provided herein.

4

SEC. 3.  

Article 5y (commencing with Section 998.540) is
5added to Chapter 6 of Division 4 of the Military and Veterans
6Code
, to read:

7 

8Article 5y.  The Veterans Housing and Homeless Prevention
9Act of 2014
10

 

11

998.540.  

This article shall be known and may be cited as the
12Veterans Housing and Homeless Prevention Act of 2014.

13

998.541.  

(a) California is home to almost two million veterans,
14more than any other state in the nation, and with the winding down
15of the wars in Iraq and Afghanistan, an unprecedented number of
16California veterans will return to our communities, many in need
17of housing, employment, mental health and drug treatment, and
18physical rehabilitation.

19(b) Unfortunately, California also leads the nation in the number
20of homeless veterans, roughly 25 percent of the nation’s homeless
21veterans live in California, approximately 19,000 veterans.
22According to the California Research Bureau, Los Angeles is
23number one in terms of the number of homeless veterans followed
24by the San Diego region at number three, and the San Francisco
25Bay Area at number nine.

26(c) Moreover, the face of the nation’s homeless veterans’
27population is changing as more OIF/OEF veterans find themselves
28in a downward spiral towards homelessness and, increasingly,
29female veterans and their children comprise more and more of the
30homeless veteran demographic.

31(d) With their higher rates of posttraumatic stress disorder,
32substance abuse, and unemployment, as well as the higher
33incidence of sexual trauma experienced by our female veterans,
34the current homeless veteran, all too often, cycles in and out of
35our jails, hospitals, and treatment programs, disproportionately
36drawing down services without receiving the proper services to
37stabilize their lives.

38(e) The Legislature must advance a comprehensive, coordinated,
39and cost-effective approach to respond to the housing and services
P6    1needs of our veterans. Such an approach should leverage public
2and private resources as well as align housing and services.

3(f) Five years ago, Californians overwhelmingly affirmed their
4gratitude to our veterans by approving Proposition 12, a $900
5million general obligation bond intended to help veterans
6specifically purchase single family homes, farms, and mobilehomes
7through the CalVet Home Loan Program.

8(g) As a result of the nation’s economic crisis and state’s housing
9downturn coupled with the changing demographics of our veterans,
10the Farm and Home Loan Program, as approved by Proposition
1112, has been significantly undersubscribed. Five years since its
12passage, the full $900 million remains unspent as does a portion
13of the $500 million from Proposition 32, which was approved by
14the voters in 2000.

15(h) Meanwhile, veterans in need of multifamily housing that is
16affordable, supportive, and transitional remains unmet and public
17and private resources available for these purposes remain
18underutilized.

19(i) California voters should be granted the opportunity to
20restructure the Proposition 12 veterans’ bond program to better
21respond to the housing and services needs as well as the changing
22demographics of the current veteran.

23(j) The Veterans Housing and Homeless Prevention Act of 2014
24will restructure $600 million of the existing Proposition 12 bond
25moneys to allow for the construction and rehabilitation of
26multifamily housing for veterans and prioritize projects that align
27housing with services. Even with this restructuring of bond moneys,
28the act still preserves over half a billion dollars for the existing
29CalVet Farm and Home Loan Program.

30(k) The Veterans Housing and Homeless Prevention Act of 2014
31will expand housing and service options for veterans,
32cost-effectively leverage public dollars, reduce the number of
33homeless veterans and its attendant public costs, and place
34California at the forefront of our nation’s efforts to end veterans
35homelessness by 2015.

36

998.542.  

(a) The State General Obligation Bond Law (Chapter
374 (commencing with Section 16720) of Part 3 of Division 4 of
38Title 2 of the Government Code), except as otherwise provided
39herein, is adopted for the purpose of the issuance, sale, and
40repayment of, and otherwise providing with respect to, the bonds
P7    1authorized to be issued by this article, and the provisions of that
2law are included in this article as though set out in full in this
3article. All references in this article to “herein” refer both to this
4article and that law.

5(b) For purposes of the State General Obligation Bond Law, the
6Department of Housing and Community Development is designated
7the board.

8

998.543.  

As used herein, the following terms have the following
9meanings:

10(a) “Board” means the Department of Housing and Community
11Development.

12(b) “Bond” means a veterans’ bond, a state general obligation
13bond, issued pursuant to this article adopting the provisions of the
14State General Obligation Bond Law.

15(c) “Bond act” means this article authorizing the issuance of
16state general obligation bonds and adopting the State General
17Obligation Bond Law by reference.

18(d) “Committee” means the Housing for Veterans Finance
19Committee, established pursuant to Section 998.547.

20(e) “Fund” means the Housing for Veterans Fund, established
21pursuant to Section 998.544.

22

998.544.  

(a) Bonds in the total amount of six hundred million
23dollars ($600,000,000), or so much thereof as is necessary, not
24including the amount of any refunding bonds, or so much thereof
25as is necessary, may be issued and sold to provide a fund to be
26used for carrying out the purposes expressed in subdivision (b)
27and to reimburse the General Obligation Bond Expense Revolving
28Fund pursuant to Section 16724.5 of the Government Code. The
29bonds, when sold, shall be and constitute a valid and binding
30obligation of the State of California, and the full faith and credit
31of the State of California is hereby pledged for the punctual
32payment of both principal of, and interest on, the bonds as the
33principal and interest become due and payable.

34(b) (1) The proceeds of bonds issued and sold pursuant to this
35section shall be made available to the board for the purposes of
36the construction, rehabilitation, and preservation of multifamily
37housing that is affordable, supportive, and transitional. The bond
38proceeds shall only be used for units designated for veterans and
39their families.

P8    1(2) The program established pursuant to paragraph (1) shall be
2administered by the board, in collaboration with the Department
3of Veterans Affairs.

4(3) The board shall establish a program to focus on veterans at
5risk for homelessness or experiencing temporary or chronic
6homelessness.

7(4) To the extent feasible, the board shall establish and
8implement programs that, among other things, do the following:

9(A) Leverage public (federal, state, and local), private, and
10nonprofit program and fiscal resources.

11(B) Prioritize projects that combine housing and supportive
12services, such as job training, mental health and drug treatment,
13or physical rehabilitation.

14(C) Promote public and private partnerships.

15(D) Foster innovative financing opportunities.

16(5) The Legislature may, from time to time, by majority vote,
17amend the provisions of this act for the purpose of improving
18program efficiency, effectiveness, and accountability, or for the
19purpose of furthering overall program goals.

20(c) The proceeds of bonds issued and sold pursuant to this article
21shall be deposited in the Housing for Veterans Fund, which is
22hereby created.

23(d) Bonds deposited in the Housing for Veterans Fund shall be
24subject to annual appropriation, as determined by the Legislature.

25

998.546.  

The bonds authorized by this article shall be prepared,
26executed, issued, sold, paid, and redeemed as provided in the State
27General Obligation Bond Law (Chapter 4 (commencing with
28Section 16720) of Part 3 of Division 4 of Title 2 of the Government
29Code), and all of the provisions of that law, except Section 16727
30of the Government Code, shall apply to the bonds and to this article
31and are hereby incorporated in this article as though set forth in
32full in this article.

33

998.547.  

Solely for the purpose of authorizing the issuance
34and sale pursuant to the State General Obligation Bond Law of
35the bonds authorized by this article, the Housing for Veterans
36Finance Committee is hereby created. For purposes of this article,
37the Housing for Veterans Finance Committee is “the committee”
38as that term is used in the State General Obligation Bond Law.
39The committee consists of the Controller, Treasurer, Director of
40Finance, and the Director of Housing and Community
P9    1Development, or their designated representatives. The Treasurer
2shall serve as chairperson of the committee. A majority of the
3committee may act for the committee.

4

998.548.  

The committee shall determine whether or not it is
5necessary or desirable to issue bonds authorized pursuant to this
6article in order to carry out the actions specified in Section 998.544
7and, if so, the amount of bonds to be issued and sold. Successive
8issues of bonds may be authorized and sold to carry out those
9actions progressively, and it is not necessary that all of the bonds
10authorized to be issued be sold at any one time.

11

998.549.  

There shall be collected each year and in the same
12manner and at the same time as other state revenue is collected,
13in addition to the ordinary revenues of the state, a sum in an amount
14required to pay the principal of, and interest on, the bonds each
15year. It is the duty of all officers charged by law with any duty in
16regard to the collection of the revenue to do and perform each and
17every act that is necessary to collect that additional sum.

18

998.550.  

Notwithstanding Section 13340 of the Government
19Code, there is hereby appropriated from the General Fund in the
20State Treasury, for the purposes of this article, an amount that will
21equal the total of the following:

22(a) The sum annually necessary to pay the principal of, and
23interest on, bonds issued and sold pursuant to this article, as the
24principal and interest become due and payable.

25(b) The sum necessary to carry out Section 998.551,
26appropriated without regard to fiscal years.

27

998.551.  

For the purposes of carrying out this article, the
28Director of Finance may authorize the withdrawal from the General
29Fund of an amount not to exceed the amount of the unsold bonds
30that have been authorized by the committee to be sold for the
31purpose of carrying out this article. Any amounts withdrawn shall
32be deposited in the fund. Any money made available under this
33section shall be returned to the General Fund from proceeds
34received from the sale of bonds for the purpose of carrying out
35this article.

36

998.552.  

All money deposited in the fund that is derived from
37premium and accrued interest on bonds sold shall be reserved in
38the fund and shall be available for transfer to the General Fund as
39a credit to expenditures for bond interest.

P10   1

998.553.  

Pursuant to Chapter 4 (commencing with Section
216720) of Part 3 of Division 4 of Title 2 of the Government Code,
3the cost of bond issuance shall be paid out of the bond proceeds.
4These costs shall be shared proportionally by each program funded
5through this bond act.

6

998.554.  

The board may request the Pooled Money Investment
7Board to make a loan from the Pooled Money Investment Account,
8including other authorized forms of interim financing that include,
9but are not limited to, commercial paper, in accordance with
10Section 16312 of the Government Code, for purposes of carrying
11out this article. The amount of the request shall not exceed the
12amount of the unsold bonds that the committee, by resolution, has
13authorized to be sold for the purpose of carrying out this article.
14The board shall execute any documents required by the Pooled
15Money Investment Board to obtain and repay the loan. Any
16amounts loaned shall be deposited in the fund to be allocated by
17the board in accordance with this article.

18

998.555.  

The bonds may be refunded in accordance with Article
196 (commencing with Section 16780) of Chapter 4 of Part 3 of
20Division 4 of Title 2 of the Government Code, which is a part of
21the State General Obligation Bond Law. Approval by the voters
22of the state for the issuance of the bonds described in this article
23includes the approval of the issuance of any bonds issued to refund
24any bonds originally issued under this article or any previously
25issued refunding bonds.

26

998.556.  

Notwithstanding any other provision of this article,
27or of the State General Obligation Bond Law, if the Treasurer sells
28bonds pursuant to this article that include a bond counsel opinion
29to the effect that the interest on the bonds is excluded from gross
30income for federal tax purposes, subject to designated conditions,
31the Treasurer may maintain separate accounts for the investment
32of bond proceeds and for the investment of earnings on those
33proceeds. The Treasurer may use or direct the use of those proceeds
34or earnings to pay any rebate, penalty, or other payment required
35under federal law or take any other action with respect to the
36investment and use of those bond proceeds required or desirable
37under federal law to maintain the tax exempt status of those bonds
38and to obtain any other advantage under federal law on behalf of
39the funds of this state.

P11   1

998.557.  

The Legislature hereby finds and declares that,
2inasmuch as the proceeds from the sale of bonds authorized by
3this article are not “proceeds of taxes” as that term is used in Article
4XIII B of the California Constitution, the disbursement of these
5proceeds is not subject to the limitations imposed by that article.

6

SEC. 4.  

Sections 1 to 3, inclusive, of this act shall take effect
7upon the approval by the voters of the Veterans Housing and
8Homeless Prevention Act of 2014, as set forth in Section 3 of this
9act.

10

SEC. 5.  

(a) Notwithstanding Sections 9040, 9043, 9044, 9061,
119094, and 13115 of the Elections Code or any other law, a ballot
12measure that sets forth Sections 1 to 3, inclusive, of this act shall
13be submitted to the voters at the November 4, 2014, general
14election.

15(b) The Secretary of State shall ensure the placement of the
16ballot measure as set forth in Sections 1 to 3, inclusive, of this act
17on the November 4, 2014, general election ballot, in substantial
18compliance with any statutory time requirements applicable to the
19submission of statewide measures to the voters at a statewide
20election.

21(c) The Secretary of State shall include, in the ballot pamphlet
22 mailed pursuant to Section 9094 of the Elections Code, the
23information specified in Section 9084 of the Elections Code
24regarding the provisions contained in Sections 1 to 3, inclusive,
25of this act.

26

SEC. 6.  

This act is an urgency statute necessary for the
27immediate preservation of the public peace, health, or safety within
28the meaning of Article IV of the Constitution and shall go into
29immediate effect. The facts constituting the necessity are:

30In order that this act be included on the November 4, 2014,
31general election ballot for purposes of assisting veterans at the
32earliest possible time, it is necessary that this act take effect
33immediately.



O

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