(a)

(1) All debentures issued under this

chapter to any lender or bondholder shall be executed in the name of the fund as obligor, shall be signed by the Treasurer, and shall be negotiable. Pursuant to Sections and 129130, all debentures shall be dated as of the date of the institution of foreclosure proceedings or as of the date of the acquisition of the property after default by other than foreclosure, or as of another date as the department, in its discretion, may establish.

(2) The debentures shall bear interest from that date at a rate equal to the insured loan or bonds, and shall be payable on a payment

schedule identical with payments on the insured loan or bonds. The Treasurer shall take appropriate steps to the extent feasible to provide that interest on the debentures is exempt from federal income taxation under

Section of the Internal Revenue Code to the extent interest on the insured loan or bonds is exempt from federal income taxation under

Section of the Internal Revenue Code on the date the insured loan or bonds is exchanged for debentures. All debentures shall be exempt, both as to principal and interest, from all taxation now or hereafter imposed by the state or local taxing agencies, shall be paid out of the fund, which shall be primarily liable therefor, and shall be, pursuant to

Section of

Article XVI of the California Constitution, fully and unconditionally guaranteed as to principal and interest by the State of California, which guaranty shall be expressed on the face of the debentures.

(3) If the fund fails to pay upon demand, when due, the principal of, or interest on, any debentures issued under this chapter, the Treasurer shall pay to the holders the amount thereof, which amount, notwithstanding

Section of the Government Code, is hereby continuously appropriated from the General Fund, without regard to fiscal years, and thereupon to the extent of the amount so paid the Treasurer shall succeed to all the rights of the holders of the debentures. The fund shall be liable for repayment to the General Fund of any money paid from the General Fund pursuant to this

section in accordance with procedures jointly established by the Treasurer and the department. (

b) Any debenture issued under this

article shall be paid on a par with general obligation bonds issued by the state.