BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 639
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          Date of Hearing:   April 30, 2013

                       ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
                                Al Muratsuchi, Chair
              AB 639 (John A. Pérez) - As Introduced:  February 20, 2013
           
          SUBJECT  :   Veterans Housing and Homeless Prevention Act of 2014

           SUMMARY  :   Authorizes the issuance of $600,000,000 in general  
          obligation bonds for the constructions, rehabilitation, and  
          preservation of affordable multifamily, supportive, and  
          transitional housing for veterans, if approved by the voters at  
          the November, 2014, general election. Specifically,  this bill  :  

          1)Authorizes the issuance of $600 million in general obligation  
            bonds, the proceeds of which are to be made available to the  
            Department of Housing and Community Development (HCD) for the  
            purpose of constructing, rehabilitating, and preserving  
            affordable multifamily, supportive, and transitional housing  
            for veterans.

          2)Restricts the use of bond proceeds to only those housing units  
            designated for veterans and their families.

          3)Requires the program to be administered by HCD in  
            collaboration with the California Department of Veterans  
            Affairs (CalVet).

          4)Requires HCD to establish a program to focus on veterans at  
            risk of homelessness or experiencing temporary or chronic  
            homelessness.

          5)Requires HCD, to the extent feasible, to establish and  
            implement programs that, among other things:

             a)   Leverage public, 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; and

             d)   Foster innovative financing opportunities.








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          6)Allows the Legislature, by majority vote, to amend the  
            provisions of the act for the purpose of improving program  
            efficiency, effectiveness, and accountability, or for the  
            purpose of furthering overall program goals.

          7)Creates the Housing for Veterans Fund and requires the  
            proceeds of bonds issued and sold pursuant to the bill to be  
            deposited in the fund.

          8)Subjects bonds deposited in Housing for Veterans Fund to  
            annual appropriation, as determined by the Legislature.

          9)Requires the measure to be submitted to the voters at the  
            November 4, 2014, general election.

          10)Contains an urgency clause.

           EXISTING LAW  :  

           1)Provides for farm and home purchase benefits for qualifying  
            veterans under the Veterans Farm and Home Purchase Act of 1974  
            and subsequent acts, which are collectively referred to as the  
            CalVet Home Loan Program (Military & Veterans Code Section  
            987.50, et seq.).

          2)Defines "home" as a parcel of real estate upon which there is  
            a dwelling house or other buildings that will, in the opinion  
            of CalVet, suit the needs of the purchaser and the purchaser's  
            dependents as a place of abode; a condominium; a mobilehome;  
            and cooperative housing (Military & Veterans Code Section  
            987.51).

          3)Authorizes the Veterans Bond Act of 2008 for the purpose of  
            creating a fund to provide farm and home aid for veterans in  
            the amount of $900 million (Military and Veterans Code Section  
            998.400, et seq.).

          4)Authorizes the Veterans Bond Act of 2000 for the purpose of  
            creating a fund to provide farm and home aid for veterans in  
            the amount of $500 million (Military and Veterans Code Section  
            998.300, et seq.).

           FISCAL EFFECT  :   Unknown at this time.









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           COMMENTS  :   

           Argument for the bill  :  New Directions, a non-profit entity that  
          provides housing and supportive services to veterans in the Los  
          Angeles area, states: 

               There is a national effort to end homelessness among  
               veterans and the creation of affordable housing with  
               support services is a key part of that effort. Veterans who  
               remain homeless, or are on the edge of homelessness,  
               utilize a disproportionate amount of public services such  
               as emergency rooms, jails, and treatment centers. The  
               creation of more affordable housing will not only save  
               money by stabilizing the lives of tens of thousands of  
               veterans, it is the honorable thing to do for a population  
               that has put their lives on the line for our country.

           Purpose of the bill:  AB 639 establishes the Veterans Housing and  
          Homeless Prevention Act to restructure $600 million of the $900  
          million in bonds approved by the voters for the CalVet Home Loan  
          Program in 2008 and use them instead to fund the construction  
          and rehabilitation of affordable multifamily, supportive, and  
          transitional housing for veterans. The move would leave CalVet  
          with $530 million in bonds for its home loan program. The bill  
          tasks HCD with administering the new funding program in  
          collaboration with CalVet and explicitly restricts the use of  
          bond proceeds to those housing units designated for veterans and  
          their families. The focus of the program would be on housing for  
          veterans who are homeless or at risk for homelessness and in  
          need of services such as mental health counseling, substance  
          abuse treatment, job training, and physical therapy to address  
          injuries. Restructuring the bonds requires voter approval, which  
          would be sought at the 2014 general election. 

          According to the author, "The Legislature must advance a  
          comprehensive, coordinated, and cost-effective approach to  
          respond to the housing and services needs of our veterans. 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 the attendant public costs, and place California at the  
          forefront of our nation's efforts to end veterans' homelessness  
          by 2016."

          According to the Committee on Housing and Community Development:








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               Despite California's high number of homeless veterans, the  
               state does not have any programs that are directly targeted  
               at serving this population, or at serving lower-income  
               veterans who are at risk of homelessness. HCD offers  
               various programs that support the development of  
               multifamily rental housing for low income Californians,  
               including supportive and transitional housing, but none are  
               veteran-specific. HCD's programs have been funded since  
               2002 from two voter-approved housing bonds, Proposition 46  
               of 2002 and Proposition 1C of 2006. These funds are nearly  
               gone and it is unclear when additional funds will be  
               available for these programs. In addition, the elimination  
               of redevelopment agencies meant a loss of around $1 billion  
               per year in affordable housing funding, funds that  
               generally worked in concert with state dollars and other  
               sources of funding to produce affordable units to serve  
               low-income Californians.

           California Veteran Farm and Home Purchase Program  : CalVet runs  
          the California Veteran Farm and Home Purchase Program, often  
          referred to as the CalVet Home Loan Program, which was  
          established in 1921 and reauthorized in 1943 and again in 1974.   
          The program provides loans to veterans for single-family  
          residences, including condominiums and planned unit  
          developments; farms; units in cooperative developments; and  
          mobilehomes in rental parks or on land owned by the veteran. The  
          restrictions on the program do not permit development of  
          affordable multifamily, supportive, and transitional housing of  
          the kind contemplated by this bill.  

          While the program has assisted over 420,000 veterans over the  
          years, it has seen a sharp decline in activity over the last  
          decade. In 2003, the program issued 1,130 new loans; in 2012 it  
          issued just 83. In the same time period, the program's portfolio  
          of outstanding loans declined from 20,169 to 7,913.   

          CalVet's Home Loan Program is funded primarily by veterans'  
          bonds, a type of tax-exempt general obligation bond. The program  
          is fully self-supporting and does not have a cost to the General  
          Fund. The principal and interest on the bonds and the  
          administrative costs are repaid from interest charged to the  
          veteran loan holders. The Legislature has placed on the ballot  
          and California voters have approved 23 veterans' bonds since  
          1943 to provide funding for the program. The most recent was  








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          Proposition 12 in 2008, which authorized $900 million in bonding  
          authority. The prior bond, Proposition 32 of 2000, authorized  
          $500 million in bonding authority. To date, CalVet has not  
          issued any of the bonds approved under Proposition 12, and has  
          about $230 million in bonding authority left under Proposition  
          32.

           CalVet Home Loan Program will continue  :  It is important to note  
          that the existing CalVet Home Loan Program will retain  
          approximately $300 million dollars in bond authority and  
          continue to function.  According to CalVet staff as interest  
          rates rise in the open market, the CalVet Home Loan product will  
          become increasingly attractive.  This bill leaves a substantial  
          amount of money for the existing program to continue and expand  
          as the state and national economies recover from recession. 

           Bond proceeds will be used exclusively for veterans and their  
          families  :  As a final matter, although bond authority is being  
          repurposed from the CalVet Home Loan program it still will  
          provide housing exclusively for veterans and their families.   
          According to the bill, "The bond proceeds shall only be used for  
          units designated for veterans and their families."

           Previous Committee  : Assembly Housing and Community Development

          Ayes: 7Noes: 0

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Association of Veteran Service Agencies (sponsor)
          Corporation for Supportive Housing (sponsor)
          AFSCME
          Affirmed Housing Group
          American Legion-Department of California
          AMVETS-Department of California
          Association for Los Angeles Deputy Sheriffs
          Association of California Healthcare Districts
          Burbank Housing Development Corporation
          California Association of Veteran Service Agencies
          California Building Industry Association
          California Conference of Carpenters
          California Hospital Association
          California Labor Federation








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          California Medical Association
          California Nurses Association
          California Professional Firefighters
          California Rural Legal Assistance Foundation
          California Special Districts Association
          California State Sheriffs' Association
          Century Housing
          Cities of Burbank, Murietta and Oakland
          Counties of Butte, Del Norte, Los Angeles, Santa Clara, and  
          Solano
          Hospital Corporation of America
          Housing California
          JP Morgan Chase & Co.
          League of California Cities
          Los Angeles County Sheriff's Department
          Los Angeles Probation Officers Union
          Los Angeles Police Protective League
          Los Angeles Probation Officers Union
          Los Angeles Regional Reentry Partnership
          New Directions, Inc.
          Non-Profit Housing Association of Northern California
          North Coast Veterans Resource Center
          Redding Veterans Resource Center
          Riverside Sheriffs' Association
          Sacramento Veterans Resource Center
          Salvation Army Haven
          San Diego Housing Federation
          SEIU California
          State Building and Construction Trades Council
          Swords to Plowshares
          United Native Housing Development Corporation
          United Way of Greater Los Angeles
          U.S. VETS
          VFW-Department of California
          Vietnam Veterans of America-California State Council
          Vietnam Veterans of California, Inc. 
          Western Center on Law and Poverty

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    John Spangler / V. A. / (916) 319-3550 










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