BILL ANALYSIS
AB 1330
Page 1
Date of Hearing: May 9, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1330 (Salas) - As Amended: May 5, 2009
Policy Committee: Veterans
AffairsVote: 7-0
Housing 8-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes the Department of Veterans Affairs (DVA),
in conjunction with the Department of Housing and Community
Development (HCD), to establish a pilot project for a
cooperative housing project, and requires DVA to prescribe any
necessary rules and regulations to implement the pilot project.
FISCAL EFFECT
Minor absorbable costs to DVA and HCD to the extent DVA elects
to undertake the pilot project. DVA already has statutory
authority under the CalVet Program (CalVet) to finance
cooperative housing.
COMMENTS
1)Background . In 1921, the Legislature created the CalVet to
provide farm and home buying assistance to the veterans
returning from World War I. CalVet currently operates under
the authority of the Veterans Farm and Home Purchase Acts of
1943 and 1974 and various bond acts set forth in the state
Military and Veterans Code. Most recently, the voters
approved a $900 million general obligation bond act for CalVet
in November 2008. These are self-liquidating bonds, with the
principal and interest payments made from the mortage payments
of participating veterans.
CalVet is different then a standard home loan program. DVA
purchases new and existing homes, farms, and mobilehomes that
have been selected by an eligible veteran and then resells the
AB 1330
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property in accordance with a contract requiring installment
payments by the veteran. Despite this distinction, CalVet
operates very much like a conventional home loan program.
Veterans participating in the CalVet make monthly mortgage
payments just like any typical borrower.
2)Purpose . The author seeks to expand the opportunities for
addressing the housing needs of veterans by directing DVA to
develop a pilot project in consultation with HCD for the
purpose of operating cooperative housing.
A "limited equity housing cooperative" is a corporation
organized as a nonprofit public benefit corporation that holds
title to real property for the benefit of a trust.
Cooperatives are made up of members who own stock in the
corporation. Rather than paying a mortgage payment each
month, each shareholder pays his or her share of the total
operating costs of the corporation. Benefits to the
shareholder under such an arrangement include establishing
personal income tax deductions, lower turnover rates, lower
real estate tax assessments (in some local areas), controlled
maintenance costs, and resident participation and control.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081