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California Proposition 3, Home and Farm Bonds for Veterans (1982)

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California Proposition 3, or the Veterans Bond Act Of 1982, was on the November 2, 1982 statewide general election ballot in California as a legislatively-referred bond act, where it was approved.

Proposition 3 authorized the State of California to issue $450 million in bonds to continue the state's long-standing farm and home loan program for veterans.

Election results

Proposition 3
ResultVotesPercentage
Approveda Yes 4,840,325 67.1%
No2,369,16632.9%

Statutory impact

Logo of the Cal Vet loans program

Proposition 3 added sections 998.052, et seq. to the California Military and Veterans Code.

Ballot summary

Proposition 3's official ballot summary said:

"This act provides for a bond issue of four hundred fifty million dollars ($450,000,000) to provide farm and home aid for California veterans."

Fiscal impact

The fiscal estimate provided by the California Legislative Analyst's Office said:

"Under current law the state can sell bonds at any rate of interest up to 11 percent. If the full $450 million in bonds were sold at the maximum interest rate and paid off over a 25-year period, the total interest cost incurred by the state on the bonds would be about $720 million. Thus, the cost to the state of paying the principal and interest on the bonds authorized by this measure could total $1.17 billion. This cost would be less to the extent the bonds were sold at interest rates below 11 percent.
By permitting the state to sell bonds at a discount, the measure could result in less than $450 million being available for loans to veterans. At the same time, however, selling the bonds at a discount could result in a lower interest rate on the bonds than would otherwise be possible.
The extent to which the state would incur any net costs under this proposition would depend on how much money was received from veterans. If the payments made by those veterans participating in the farm and home loan program did not cover the costs of the bonds, the state's taxpayers would be required to pay the difference. Throughout its history, however, the loan program has been totally supported by the participating veterans at no direct cost to the taxpayer.
The state and local governments could incur higher costs under other bond finance programs if the bond sales authorized by this measure result in a higher overall interest rate on state and local bonds. These additional costs are unknown.
The interest paid by the state on these bonds would be exempt from the state personal income tax. Therefore, to the extent that the bonds are purchased by California taxpayers in lieu of taxable bonds, the state would experience a loss of income tax revenue. It is not possible, however, to estimate what this revenue loss would be."

Path to the ballot

The California State Legislature voted to put Proposition 3 on the ballot via Assembly Bill 3571 (Statutes of 1982, Ch. 304).

Votes in legislature to refer to ballot
Chamber Ayes Noes
Assembly 62 0
Senate 29 1

External links

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