Code Section Group

Military and Veterans Code - MVC

DIVISION 4. VETERANS' AID AND WELFARE [690 - 1008.5]

  ( Division 4 enacted by Stats. 1935, Ch. 389. )

CHAPTER 7. Veterans’ Revenue Debenture Act of 1970 [1000.1 - 1006.16]

  ( Chapter 7 added by Stats. 1970, Ch. 1488. )

ARTICLE 7. Miscellaneous [1006.1 - 1006.16]
  ( Article 7 added by Stats. 1970, Ch. 1488. )

1006.1.
  

All debentures and the income therefrom are at all times exempt from taxation in the State of California, except for transfer, inheritance, and gift taxes.

(Added by Stats. 1970, Ch. 1488.)

1006.2.
  

All debentures shall be legal investments for all trust funds, for the funds of all insurance companies, banks (both commercial and savings), trust companies, state school funds and any pension funds, public or private.

(Added by Stats. 1970, Ch. 1488.)

1006.3.
  

Any money or funds which may by law be invested in bonds of the State of California may be invested in debentures.

(Added by Stats. 1970, Ch. 1488.)

1006.4.
  

Whenever any bonds of the State of California may by law be used as security for the performance of any act or the deposit of any public money, debentures may be so used.

(Added by Stats. 1970, Ch. 1488.)

1006.5.
  

All debentures, subject to the provisions for registration contained therein, are negotiable instruments under the law merchant.

(Added by Stats. 1970, Ch. 1488.)

1006.6.
  

The department may include in the proceedings authorizing the issuance of debentures any provisions not inconsistent with this chapter which limit, restrict or regulate the holding, deposit, investment, and application of money consisting of the proceeds from the sale of the debentures or the revenues or other income received from the pledged contracts entered into by the department with veterans, and such provisions shall constitute a contract with the holders of the debentures and shall be binding upon the department and all other officers, officials and agencies of the State of California and upon the state so long as any of the debentures are outstanding.

(Added by Stats. 1970, Ch. 1488.)

1006.7.
  

The department may provide in the proceedings authorizing issuance of debentures for the establishment of one or more reserve funds out of the proceeds of the sale of the debentures or out of revenues or out of any moneys or securities available to the department under this act, and may provide for the use and application of any surplus moneys in any such reserve fund.

(Added by Stats. 1970, Ch. 1488.)

1006.8.
  

The State Treasurer may sell any of the debentures authorized under this chapter to the United States of America or to any of its departments, agencies or instrumentalities upon such terms and conditions as may be mutually agreed upon, and the department is specifically authorized to enter into any such agreements, terms and conditions required by the United States of America or any of its departments, agencies or instrumentalities as a condition to the purchase of such debentures.

(Added by Stats. 1970, Ch. 1488.)

1006.9.
  

Warrants for the payments to be made on account of the debentures either as to principal, interest, premium, or otherwise, shall be duly drawn by the State Controller, upon the request of the State Treasurer, whenever the drawing of such warrants is required in order to make such payments.

(Added by Stats. 1970, Ch. 1488.)

1006.10.
  

Notwithstanding anything contained in this chapter, the proceeds received from the sale of debentures and any revenues received by the department from pledged contracts entered into by the department may be used to defray any expenses incurred by the department or the State Treasurer in connection with and incidental to the issuance and sale of debentures including expenses for preparation, inspections and examinations, surveys and reports, which may be required by the purchasers of debentures, and any legal opinions deemed necessary or advisable by the department in connection with the issuance of debentures except that the proceedings authorizing the issuance of such debentures may contain appropriate provisions governing the use and application of the proceeds from the sale of the debentures or other revenues received by the department for the purposes above specified.

(Added by Stats. 1970, Ch. 1488.)

1006.11.
  

This chapter shall be liberally construed to carry out the objects and purposes and the declared public policy of the State of California as in this chapter set forth. The facts with which the Legislature is fully cognizant are:

The State of California is committed to aid and assist veterans under the Veterans’ Farm and Home Purchase Act of 1974. Increasing numbers of servicemen who served in Vietnam are being discharged and need home loans. The Cal-Vet loan program must be updated to provide comparable benefits to those provided veterans of World War II and the Korean Conflict. Conditions in the money market render it impracticable for the State of California in conformity with its other commitments to continue to raise funds for veterans’ aid through the issuance and sale of general obligation bonds of the state. There is now in the Department of Veterans Affairs a backlog of applications which cannot be processed because funds are inadequate to meet the demand for loans. This act provides another method whereby the State of California will be able to raise the necessary funds for the aid and assistance of veterans through the issuance of revenue debentures payable exclusively from the proceeds of contracts of sale of properties acquired by the department from veterans’ revenue debenture proceeds and resold to veterans without imposing any liability upon the State of California and without creating any debt or liability of the State of California. The urgent requirements of veterans and the necessity of raising funds immediately for their aid and assistance render it essential that this law be adopted.

(Amended by Stats. 1976, Ch. 663.)

1006.12.
  

If any section, subdivision, sentence, clause or phrase of this chapter is for any reason held to be unconstitutional or invalid or unenforceable, such decision shall not affect the validity or enforceability of the remaining portions of the chapter. The Legislature hereby declares that it would have passed this chapter and each section, subdivision, sentence, clause and phrase hereof irrespective of the fact that any one or more sections, subdivisions, sentences, clauses and phrases may be declared unconstitutional, invalid or unenforceable.

(Added by Stats. 1970, Ch. 1488.)

1006.13.
  

This chapter shall not operate to rescind or repeal any act of the State of California now or hereafter enacted providing for the issuance of general obligation bonds of the State of California for the purpose of financing the Veterans’ Farm and Home Purchase Act of 1974 or for purposes similar to those set forth in the Veterans’ Farm and Home Purchase Act of 1974 provided such bonds are either payable out of the General Fund of the State of California or the full faith and credit of said state is pledged for the payment of both the principal of and interest thereon.

(Amended by Stats. 1976, Ch. 663.)

1006.14.
  

All money in any of the funds created or authorized to be created in any resolution of issuance under the provisions of this chapter is hereby appropriated for expenditure in carrying out the purposes herein and therein provided.

(Added by Stats. 1970, Ch. 1488.)

1006.15.
  

The purchaser shall make an initial payment of at least 10 percent of the selling price of the property, in case of a farm, and 5 percent in the case of a home. The department may waive the initial payment in any case where the value of the property as determined by the department appraisal shall be equal to the amount to be paid by the department plus at least 10 percent in the case of a farm, and 5 percent in the case of a home. The balance of the purchase price may be amortized over a period fixed by the department, not exceeding 40 years, together with interest thereon at the rate as determined by the department for such amortization purposes. The department shall establish the actual interest rate to be paid. To this end the department, by two-thirds vote of the California Veterans Board, with the approval of the Veterans’ Debenture Finance Committee established by Section 1000.3 of this code, is empowered to establish a uniform rate of interest payable upon the amount remaining unpaid under all pledged veterans’ purchase contracts then or thereafter executed. The California Veterans Board and the Veterans’ Debenture Finance Committee shall periodically at least once each year make a finding as to the rate of interest to be charged, taking into consideration the requirements of the Veterans’ Debenture Revenue Fund created by this chapter, but subject to any covenant contained in any resolution of issuance adopted in accordance with this chapter pursuant to which debentures are at the time outstanding. Subject to any such covenant, the department may raise or lower the rate of interest payable under such contracts for any given period as many times and as frequently as it deems to be for the best interests of the department, if in so doing its action is made applicable alike to any and all pledged contract holders and 30 days’ advance notice is given of the time when the new rate of interest is to become effective. Upon demand of the Veterans’ Debenture Finance Committee, given as provided in any resolution of issuance adopted pursuant to this chapter, the department shall increase the rate of interest to be charged upon the amount remaining unpaid upon all pledged veterans’ purchase contracts then in existence. A change in the interest rate may affect the total amount of any installment payment. The purchaser on any installment date may pay any or all installments still remaining unpaid. Subject to any covenant contained in any resolution of issuance adopted in accordance with this chapter, and pursuant to which debentures are at the time outstanding, the department may, in any individual case, for good cause postpone from time to time, upon such terms as the department deems proper, the payment of the whole or any part of any installment of the purchase price or interest thereon.

This section is intended to be applicable to all lands acquired from the proceeds of the sale of debentures issued hereunder and to the resale and disposition of such lands to the purchasers thereof and no other provision of law shall be applicable to the purchase or resale of such lands except only as in this act provided.

(Added by Stats. 1970, Ch. 1488.)

1006.16.
  

The department shall require that all applicants under this article qualify under the applicable federal laws and regulations governing the permitted uses of tax-exempt bond funds, and file within the time limits required under applicable federal laws and regulations.

(Amended by Stats. 1993, Ch. 1066, Sec. 10. Effective October 11, 1993.)

MVCMilitary and Veterans Code - MVC7