AB 2651

Bill Subjects

Abstract

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.