BILL NUMBER: AB 639 INTRODUCED BILL TEXT 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: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 51005 of the Health and Safety Code is amended to read: 51005. (a) The agency shall, by November 1 of each year, submit an annual report of its activities under this division for the preceding year to the Governor, the Secretary of the Business and Transportation Agency, the Director of Housing and Community Development, the Treasurer, the Joint Legislative Budget Committee, the Legislative Analyst, and the Legislature. The report shall set forth a complete operating and financial statement of the agency during the concluded fiscal year. The report shall specify the number of units assisted, the distribution of units among the metropolitan, nonmetropolitan, and rural areas of the state, and shall contain a summary of statistical data relative to the incomes of households occupying assisted units, the monthly rentals charged to occupants of rental housing developments, and the sales prices of residential structures purchased during the previous fiscal year by persons or families of low or moderate income. The report shall also include a statement of accomplishment during the previous year with respect to the agency's progress, priorities, and affirmative action efforts. The agency shall specifically include in its report on affirmative action goals, statistical data on the numbers and percentages of minority sponsors, developers, contractors, subcontractors, suppliers, architects, engineers, attorneys, mortgage bankers or other lenders, insurance agents, and managing agents. (b) The report shall also include specific information evaluating the extent to which the programs administered by the agency have attained the statutory objectives of the agency, including, but not limited to, (1) the primary purpose of the agency in meeting the housing needs of persons and families of low or moderate income pursuant to Section 50950, (2) the occupancy requirements for very low income households established pursuant to Sections 50951 and 51226, (3) the elderly and orthopedic disability occupancy requirements established pursuant to Section 51230, (4) the use of surplus moneys pursuant to Section 51007, (5) the metropolitan, nonmetropolitan, and rural goals established pursuant to subdivision (h) of Section 50952, (6) the California Statewide Housing Plan, as required by Section 50154, (7) the statistical and other information developed and maintained pursuant to Section 51610, (8) the number of manufactured housing units assisted by the agency, (9) information with respect to the proceeds derived from the issuance of bonds or securities and any interest or other increment derived from the investment of bonds or securities, and the uses for which those proceeds or increments are being made as provided for in Section 51365, including the amount by which each fund balance exceeds indenture requirements, (10) any recommendations described in subdivision (d), (11) any recommendations described in Section 51227, (12) the revenue bonding authority plan adopted pursuant to Section 51004.5, (13) the statistical and other information required to be provided pursuant to Section 50156, (14) an analysis of the agency's compliance with the targeting requirements of subsection (d) of Section 142 of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 142) with respect to any issue of bonds subject to those requirements under Section 103 of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 103), including the numbers of rental units subject to this reporting requirement by categories based on the number of bedrooms per unit, and (15) the statistical and other information relating to congregate housing for the elderly pursuant to Section 51218. The agency may, at its option, include the information required by this section in a single document or may separately report the statistical portion of the information in a supplement appended to its annual report. This statistical supplement shall be distributed with copies of the agency's annual report, but need not be provided to bond rating agencies, underwriters, investors, developers, or financial institutions. (c) The agency shall cause an audit of its books and accounts with respect to its activities under this division to be made at least once during each fiscal year by an independent certified public accountant and the agency shall be subject to audit by the Department of Finance not more often than once each fiscal year. (d) The agency shall assess any obstacles or problems that it has encountered in meeting its mandate to serve nonmetropolitan and rural metropolitan areas, and recommend legislative and administrative solutions to overcome these obstacles or problems. The agency shall separately assess its progress in meeting the rehabilitation needs of rural areas and the new construction needs of rural areas, and separately assess its progress as to single and multifamily units. The agency shall include in its report a quantification and evaluation of its progress in meeting the housing needs of communities of various sizes in rural areas. (e) By December 1 of each fiscal year, the agency shall ascertain that not less than 25 percent of the total units financed by mortgage loans during the preceding 12 months pursuant to this part were made available to very low income households. If the agency finds that these very low income occupancy goals have not been met, the agency shall immediately notify the Governor, the Speaker of the Assembly, and the Senate Committee on Rules, and shall recommend legislation or other action as may be required to make (1) at least 25 percent of the units so available, and (2) at least 25 percent of the units thereafter financed so available. In housing developments for which the agency provides a construction loan but not a mortgage loan, the agency shall report annually on the percentage of units projected to be made available for occupancy and actually occupied by lower income households. (f) The annual report required pursuant to this section shall also include an evaluation of any program established by the department pursuant to Article 5y (commencing with Section 998.540) of Chapter 6 of Division 4 of the Military and Veterans Code. SEC. 2. Section 998.403 of the Military and Veterans Code is amended to read: 998.403. For the purpose of creating a fund to provide farm and home aid for veterans in accordance with the Veterans' Farm and Home Purchase Act of 1974 (Article 3.1 (commencing with Section 987.50)), and of all acts amendatory thereof and supplemental thereto, the committee may create a debt or debts, liability or liabilities, of the State of California, in the aggregate amount of not more thanninethree hundred million dollars($900,000,000)($300,000,000) , exclusive of refunding bonds, in the manner provided herein. SEC. 3. Article 5y (commencing with Section 998.540) is added to Chapter 6 of Division 4 of the Military and Veterans Code, to read: Article 5y. The Veterans Housing and Homeless Prevention Act of 2014 998.540. This article shall be known and may be cited as the Veterans Housing and Homeless Prevention Act of 2014. 998.541. (a) California is home to almost two million veterans, more than any other state in the nation, and with the winding down of the wars in Iraq and Afghanistan, an unprecedented number of California veterans will return to our communities, many in need of housing, employment, mental health and drug treatment, and physical rehabilitation. (b) Unfortunately, California also leads the nation in the number of homeless veterans, roughly 25 percent of the nation's homeless veterans live in California, approximately 19,000 veterans. According to the California Research Bureau, Los Angeles is number one in terms of the number of homeless veterans followed by the San Diego region at number three, and the San Francisco Bay Area at number nine. (c) Moreover, the face of the nation's homeless veterans' population is changing as more OIF/OEF veterans find themselves in a downward spiral towards homelessness and, increasingly, female veterans and their children comprise more and more of the homeless veteran demographic. (d) With their higher rates of posttraumatic stress disorder, substance abuse, and unemployment, as well as the higher incidence of sexual trauma experienced by our female veterans, the current homeless veteran, all too often, cycles in and out of our jails, hospitals, and treatment programs, disproportionately drawing down services without receiving the proper services to stabilize their lives. (e) The Legislature must advance a comprehensive, coordinated, and cost-effective approach to respond to the housing and services needs of our veterans. Such an approach should leverage public and private resources as well as align housing and services. (f) Five years ago, Californians overwhelmingly affirmed their gratitude to our veterans by approving Proposition 12, a $900 million general obligation bond intended to help veterans specifically purchase single family homes, farms, and mobilehomes through the CalVet Home Loan Program. (g) As a result of the nation's economic crisis and state's housing downturn coupled with the changing demographics of our veterans, the Farm and Home Loan Program, as approved by Proposition 12, has been significantly undersubscribed. Five years since its passage, the full $900 million remains unspent as does a portion of the $500 million from Proposition 32, which was approved by the voters in 2000. (h) Meanwhile, veterans in need of multifamily housing that is affordable, supportive, and transitional remains unmet and public and private resources available for these purposes remain underutilized. (i) California voters should be granted the opportunity to restructure the Proposition 12 veterans' bond program to better respond to the housing and services needs as well as the changing demographics of the current veteran. (j) The Veterans Housing and Homeless Prevention Act of 2014 will restructure $600 million of the existing Proposition 12 bond moneys to allow for the construction and rehabilitation of multifamily housing for veterans and prioritize projects that align housing with services. Even with this restructuring of bond moneys, the act still preserves over half a billion dollars for the existing CalVet Farm and Home Loan Program. (k) The Veterans Housing and Homeless Prevention Act of 2014 will expand housing and service options for veterans, cost-effectively leverage public dollars, reduce the number of homeless veterans and its attendant public costs, and place California at the forefront of our nation's efforts to end veterans homelessness by 2015. 998.542. (a) The State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), except as otherwise provided herein, is adopted for the purpose of the issuance, sale, and repayment of, and otherwise providing with respect to, the bonds authorized to be issued by this article, and the provisions of that law are included in this article as though set out in full in this article. All references in this article to "herein" refer both to this article and that law. (b) For purposes of the State General Obligation Bond Law, the Department of Housing and Community Development is designated the board. 998.543. As used herein, the following terms have the following meanings: (a) "Board" means the Department of Housing and Community Development. (b) "Bond" means a 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 Housing for Veterans Finance Committee, established pursuant to Section 998.547. (e) "Fund" means the Housing for Veterans Fund, established pursuant to Section 998.544. 998.544. (a) Bonds in the total amount of six hundred million dollars ($600,000,000), or so much thereof as is necessary, not including the amount of any refunding bonds, or so much thereof as is necessary, may be issued and sold to provide a fund to be used for carrying out the purposes expressed in subdivision (b) and to reimburse the General Obligation Bond Expense Revolving Fund pursuant to Section 16724.5 of the Government Code. The bonds, when sold, shall be and constitute a valid and binding obligation 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 of, and interest on, the bonds as the principal and interest become due and payable. (b) (1) The proceeds of bonds issued and sold pursuant to this section shall be made available to the board for the purposes of the construction, rehabilitation, and preservation of multifamily housing that is affordable, supportive, and transitional. The bond proceeds shall only be used for units designated for veterans and their families. (2) The program established pursuant to paragraph (1) shall be administered by the board, in collaboration with the Department of Veterans Affairs. (3) The board shall establish a program to focus on veterans at risk for homelessness or experiencing temporary or chronic homelessness. (4) To the extent feasible, the board shall establish and implement programs that, among other things, do the following: (A) Leverage public (federal, state, and local), private, and nonprofit program and fiscal resources. (B) Prioritize projects that combine housing and supportive services, such as job training, mental health and drug treatment, or physical rehabilitation. (C) Promote public and private partnerships. (D) Foster innovative financing opportunities. (5) The Legislature may, from time to time, by majority vote, amend the provisions of this act for the purpose of improving program efficiency, effectiveness, and accountability, or for the purpose of furthering overall program goals. (c) The proceeds of bonds issued and sold pursuant to this article shall be deposited in the Housing for Veterans Fund, which is hereby created. (d) Bonds deposited in the Housing for Veterans Fund shall be subject to annual appropriation, as determined by the Legislature. 998.546. The bonds authorized by this article shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), and all of the provisions of that law, except Section 16727 of the Government Code, shall apply to the bonds and to this article and are hereby incorporated in this article as though set forth in full in this article. 998.547. Solely for the purpose of authorizing the issuance and sale pursuant to the State General Obligation Bond Law of the bonds authorized by this article, the Housing for Veterans Finance Committee is hereby created. For purposes of this article, the Housing for Veterans Finance Committee is "the committee" as that term is used in the State General Obligation Bond Law. The committee consists of the Controller, Treasurer, Director of Finance, and the Director of Housing and Community Development, or their designated representatives. The Treasurer shall serve as chairperson of the committee. A majority of the committee may act for the committee. 998.548. The committee shall determine whether or not it is necessary or desirable to issue bonds authorized pursuant to this article in order to carry out the actions specified in Section 998.544 and, if so, the amount of bonds to be issued and sold. Successive issues of bonds may be authorized and sold to carry out those actions progressively, and it is not necessary that all of the bonds authorized to be issued be sold at any one time. 998.549. There shall be collected each year and in the same manner and at the same time as other state revenue is collected, in addition to the ordinary revenues of the state, a sum in an amount required to pay the principal of, and interest on, the bonds each year. It is the duty of all officers charged by law with any duty in regard to the collection of the revenue to do and perform each and every act that is necessary to collect that additional sum. 998.550. Notwithstanding Section 13340 of the Government Code, there is hereby appropriated from the General Fund in the State Treasury, for the purposes of this article, an amount that will equal the total of the following: (a) The sum annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to this article, as the principal and interest become due and payable. (b) The sum necessary to carry out Section 998.551, appropriated without regard to fiscal years. 998.551. For the purposes of carrying out this article, the Director of Finance may authorize the withdrawal from the General Fund of an amount not to exceed the amount of the unsold bonds that have been authorized by the committee to be sold for the purpose of carrying out this article. Any amounts withdrawn shall be deposited in the fund. Any money made available under this section shall be returned to the General Fund from proceeds received from the sale of bonds for the purpose of carrying out this article. 998.552. All money deposited in the fund 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 a credit to expenditures for bond interest. 998.553. Pursuant to Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code, the cost of bond issuance shall be paid out of the bond proceeds. These costs shall be shared proportionally by each program funded through this bond act. 998.554. The board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, including other authorized forms of interim financing that include, but are not limited to, commercial paper, in accordance with Section 16312 of the Government Code, for purposes of carrying out this article. The amount of the request shall not exceed the amount of the unsold bonds that the committee, by resolution, has authorized to be sold for the purpose of carrying out this article. The board shall execute any documents required by the Pooled Money Investment Board to obtain and repay the loan. Any amounts loaned shall be deposited in the fund to be allocated by the board in accordance with this article. 998.555. The bonds may be refunded in accordance with Article 6 (commencing with Section 16780) of Chapter 4 of Part 3 of Division 4 of Title 2 of the Government Code, which is a part of the State General Obligation Bond Law. Approval by the voters of the state for the issuance of the bonds described in this article includes the approval of the issuance of any bonds issued to refund any bonds originally issued under this article or any previously issued refunding bonds. 998.556. Notwithstanding any other provision of this article, or of the State General Obligation Bond Law, if the Treasurer sells bonds pursuant to this article that include a bond counsel opinion to the effect that the interest on the bonds is excluded from gross income for federal tax purposes, subject to designated conditions, the Treasurer may maintain separate accounts for the investment of bond proceeds and for the investment of earnings on those proceeds. The Treasurer may use or direct the use of those proceeds or earnings to pay any rebate, penalty, or other payment required under federal law or take any other action with respect to the investment and use of those bond proceeds required or desirable under federal law to maintain the tax exempt status of those bonds and to obtain any other advantage under federal law on behalf of the funds of this state. 998.557. The Legislature hereby finds and declares that, inasmuch as the proceeds from the sale of bonds authorized by this article are not "proceeds of taxes" as that term is used in Article XIII B of the California Constitution, the disbursement of these proceeds is not subject to the limitations imposed by that article. SEC. 4. Sections 1 to 3, inclusive, of this act shall take effect upon the approval by the voters of the Veterans Housing and Homeless Prevention Act of 2014, as set forth in Section 3 of this act. SEC. 5. (a) Notwithstanding Sections 9040, 9043, 9044, 9061, 9094, and 13115 of the Elections Code or any other law, a ballot measure that sets forth Sections 1 to 3, inclusive, of this act shall be submitted to the voters at the November 4, 2014, general election. (b) The Secretary of State shall ensure the placement of the ballot measure as set forth in Sections 1 to 3, inclusive, of this act on the November 4, 2014, general election ballot, in substantial compliance with any statutory time requirements applicable to the submission of statewide measures to the voters at a statewide election. (c) The Secretary of State shall include, in the ballot pamphlet mailed pursuant to Section 9094 of the Elections Code, the information specified in Section 9084 of the Elections Code regarding the provisions contained in Sections 1 to 3, inclusive, of this act. SEC. 6. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order that this act be included on the November 4, 2014, general election ballot for purposes of assisting veterans at the earliest possible time, it is necessary that this act take effect immediately.