BILL NUMBER: AB 2651 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 19, 2010
INTRODUCED BY Assembly Member Knight
FEBRUARY 19, 2010
An act to add Section 998.4055 to the Military and
Veterans Code, relating to veterans. An act to amend
Sections 16757 and 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.
LEGISLATIVE COUNSEL'S DIGEST
AB 2651, as amended, Knight. Veterans farm and home
purchases. 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, as prescribed.
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.
This bill would instead require those payments to be transferred
to the Veterans' Bonds Payment Fund, rather than to the General Fund.
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, with
respect to any bonds issued pursuant to a veterans farm and home
purchase account, the Controller shall first draw warrants against
the Veterans' Bond Payment Fund, and, to the extent moneys in the
fund are insufficient to pay the amount due, shall draw warrants
against the General Fund.
The acts authorizing the various bonds issues for these purposes
require the Controller to pay, from the General Fund, the principal
and interest on the bonds when due, and to be reimbursed for those
costs from the Veterans' Farm and Home Building Fund of 1943.
This bill would authorize the Controller to establish a
zero-balance account within the General Fund and to transfer to that
account, from the Veterans' Home Building Fund of 1943, those amounts
necessary to pay from the General Fund the principal and interest on
the bonds as it comes due.
Vote: majority. 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 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
State Controller in favor of the State
Treasurer, or state fiscal agents, or other duly authorized
agents, pursuant to claims filed with the State
Controller by the State Treasurer, in the amounts
so falling due. For any such payments with respect to any bonds
issued pursuant to a veterans farm and home purchase account adopted
pursuant to the Military and Veterans Code, the Controller shall
first draw warrants against the Veterans' Bonds Payment Fund created
by 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.
SEC. 3. 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, on bonds
issued pursuant to all veterans farm and home purchase bond acts
pursuant to this chapter, and 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 subdivision
(a) of Section 16310.
(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.
SEC. 4. Section 998.402 of the Military
and Veterans Code is amended to read:
998.402. As used herein, the following words have the following
meanings:
(a) "Board" means the Department of Veterans Affairs.
(b) "Bond" means 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. 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
General 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 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.
SECTION 1. Section 998.4055 is added to the
Military and Veterans Code, immediately following Section 998.405, to
read:
998.4055. Notwithstanding any other law, the Controller may
establish a zero-balance account in the General Fund and transfer to
that account, from the Veterans Home Building Fund of 1943, those
amounts that are necessary to pay from the General Fund the principal
and interest that is due and payable on bonds issued pursuant to
this article.