Article 5x. Veterans’ Bond Act Of 2008 of California Military And Veterans Code >> Division 4. >> Chapter 6. >> Article 5x.
This article may be cited as the Veterans' Bond Act of
(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
(b) For purposes of the State General Obligation Bond Law, the
Department of Veterans Affairs is designated the board.
As used herein, the following terms have the following
(a) "Board" means the Department of Veterans Affairs.
(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 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.
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 than
three hundred million dollars ($300,000,000), exclusive of refunding
bonds, in the manner provided herein.
(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
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, the Payment 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.
There is hereby appropriated from the General Fund, for
purposes of this article, a sum of money that will equal both of the
(a) That sum annually necessary to pay the principal of, and the
interest on, the bonds issued and sold as provided herein, as that
principal and interest become due and payable.
(b) That sum necessary to carry out Section 998.406, appropriated
without regard to fiscal years.
For the purposes of this article, the Director of Finance
may, by executive order, authorize the withdrawal from the General
Fund of a sum of money not to exceed the amount of the unsold bonds
which have been authorized by the committee to be sold pursuant to
this article. Any sums withdrawn shall be deposited in the fund. All
moneys made available under this section to the board shall be
returned by the board to the General Fund, plus the interest that the
amounts would have earned in the Pooled Money Investment Account,
from the sale of bonds for the purpose of carrying out this article.
The board may request the Pooled Money Investment Board to
make a loan from the Pooled Money Investment Account, in accordance
with Section 16312 of the Government Code, for the purposes of
carrying out this article. The amount of the request shall not exceed
the amount of unsold bonds which the committee has, by resolution,
authorized to be sold for the purpose of carrying out this article.
The board shall execute whatever documents are 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.
Upon request of the board, supported by a statement of its
plans and projects approved by the Governor, the committee shall
determine whether to issue any bonds authorized under this article in
order to carry out the board's plans and projects, and, if so, the
amount of bonds to be issued and sold. Successive issues of bonds may
be authorized and sold to carry out these plans and projects
progressively, and it is not necessary that all of the bonds be
issued or sold at any one time.
As long as any bonds authorized under this article are
outstanding, the Secretary of Veterans Affairs shall, at the close of
each fiscal year, require a survey of the financial condition of the
Division of Farm and Home Purchases, together with a projection of
the division's operations, to be made by an independent public
accountant of recognized standing. The results of each survey and
projection shall be reported in writing by the public accountant to
the Secretary of Veterans Affairs, the California Veterans Board, the
appropriate policy committees dealing with veterans affairs in the
Senate and the Assembly, and the committee.
The Division of Farm and Home Purchases shall reimburse the public
accountant for these services out of any money which the division
may have available on deposit with the Treasurer.
The committee may authorize the Treasurer to sell all or
any part of the bonds authorized by this article at the time or times
established by the Treasurer.
Whenever the committee deems it necessary for an effective sale of
the bonds, the committee may authorize the Treasurer to sell any
issue of bonds at less than their par value, notwithstanding Section
16754 of the Government Code. However, the discount on the bonds
shall not exceed 3 percent of the par value thereof.
Out of the first money realized from the sale of bonds as
provided herein, there shall be redeposited in the General Obligation
Bond Expense Revolving Fund, established by Section 16724.5 of the
Government Code, the amount of all expenditures made for the purposes
specified in that section, and this money may be used for the same
purpose and repaid in the same manner whenever additional bond sales
Any bonds issued and sold pursuant to this article 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. The approval of the voters for the issuance of bonds under this
article includes approval for the issuance of bonds issued to refund
bonds originally issued or any previously issued refunding bonds.
Notwithstanding any provision of the bond act, if the
Treasurer sells bonds under this article for which bond counsel has
issued an opinion to the effect that the interest on the bonds is
excludable from gross income for purposes of federal income tax,
subject to any conditions which may be designated, the Treasurer may
establish separate accounts for the investment of bond proceeds and
for the earnings on those proceeds, and may use those proceeds or
earnings to pay any rebate, penalty, or other payment required by
federal law or take any other action with respect to the investment
and use of bond proceeds required or permitted under federal law
necessary to maintain the tax-exempt status of the bonds or to obtain
any other advantage under federal law on behalf of the funds of this
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 Article XIII B.