BILL ANALYSIS Ó SENATE COMMITTEE ON VETERANS AFFAIRS LOU CORREA, CHAIRMAN Bill No: AB 1224 Author: Assembly Veterans Committee Version: As Proposed Hearing Date: April 10, 2012 Fiscal: Yes Consultant: Donald E. Wilson SUBJECT OF BILL Veterans' cooperative housing and 3-year Employment Training Panel (ETP) veterans. PROPOSED LAW 1. Gives the California Department of Veterans Affairs (CDVA) the authority to promulgate regulations for its new authority regarding cooperative housing. 2. Requires the Employment Training Panel's (ETP) three-year plan to include goals and strategies to support target populations in need of employment training, including military veterans and California National Guard members. EXISTING LAW 1. Provides for the establishment of employment training programs and specifies which individuals qualify as "eligible participants" of the training programs. 2. Establishes the Employment Training Panel (ETP) in the Employment development and requires the Governor to appoint the executive director and two assistant directors of ETP specifying that at least one assistant director have experience serving the needs of small business. 3. Provides that ETP is governed by eight panel members. Seven are appointed by the Governor and the leadership of the Legislature and have backgrounds in business management and employee relations, as specified. The Secretary of Business, Transportation and Housing, or his/her designee, shall serve as an ex officio, voting member. 4. Specifies the duties of ETP to include the duty to make contracts for training in job-related vocational skills, as specified and permits the ETP, subject to certain requirements, to delegate its authority to approve contracts for new hire training to any entity, as specified, for purposes of serving the needs of small businesses. 5. Requires the ETP, among other things, to establish a 3-year plan, as specified, that must be updated annually to establish minimum standards for the consideration of proposals, including the identification of employers and to develop a process by which local workforce investment boards may apply for marketing resources for the purpose of identifying local employers that have training needs reflecting the priorities of the panel. Authorizes the ETP to delegate its authority to approve contracts for training to local workforce investment boards, as provided. 6. Requires the ETP to allocate its annual funds for the training programs designed for individuals who are currently working and receiving specified benefits, as provided. 7. Authorizes the ETP to utilize funds in the Employment Training Fund (ETF) for, among other expenditures, the purpose of funding up to five licensed nurse training programs to train individuals who are currently working as nurse assistants or caregivers in a health facility, as defined. EXISTING BACKGROUND 1. In 1921, California chose to forego a wartime bonus for World War I veterans and, instead, established a home loan program to encourage home ownership. 2. The latest generation of veterans was unable to take advantage of this program until 2009 when the Federal Page 2 Government finally updated the federal law concerning the Cal-Vet Loan Program. 3. Up until the renewal of the law, demand for the Cal-Vet home loan program has dwindled as veterans loans had not offered the benefits it once did. As a result of the ability to find better opportunities outside of the CDVA, demand for the program dwindled. Loans fell from 2,752 in fiscal year 2000-01 to 954 in 2001-02. The program failed to break 1,000 loans again in 2002-03. In the same year, home improvement loans issued fell to 148. 4. Further problems for the program were that housing prices in California were quickly outdistancing loan limits under the program. The California Department of Veterans' Affairs (CDVA) thought it had solved the problem of continually returning to the legislature for renewed maximum loan values by tying the Cal-Vet loan limit to the Federal Fannie Mae Limit (SB 1893, Johannessen, 2002.) 5. As home prices increased over the years, the Cal-Vet program had to continually request increases for the maximum allowed home loan amount in order to offer usable loans for California priced property. Eventually California home prices far outdistanced the rest of the nation and the Cal-Vet program had to continually request increases for the maximum allowed home loan amount in order to offer usable loans for California priced property. Assembly Bill 1439 of 2005 (Assembly Veterans Affairs Committee), finally fixed the loan limit amount for homes to 125% of the Fannie Mae home loan limit. Farms were fixed to 150% of the loan limit. 6. In anticipation of the 2009 Federal Law change, SB 1572 of 2008 (Wyland) was put on the ballot as Proposition 12, which authorized an additional $900 million dollars to the Cal-Vet fund. 7. Equity housing cooperatives have traditionally not been allowed to have loans associated with them. Even though a veteran might own a home within the cooperative, the cooperative itself is a corporation that retains rights over the property. Since technically the veteran is not the full owner Cal-Vet has not been able to give loans to Page 3 veterans entering into these agreements since the veteran is not an owner with right over his property. 8. Limited equity housing cooperatives (LEHC) have a non-profit as the corporation and are meant to help those with fewer financial means to get into a cooperative. 9. Since Vietnam it was discovered that many veterans may not be ready to pick up where they left off when they left civilian life. Many veterans who returned home from Vietnam were found on skid rows across America a decade after the war and then diagnosed with post-traumatic stress disorder (PTSD). The lack of diagnosis and treatment for PTSD condemned many to a life most would choose not to follow. Many have committed suicide or gotten into trouble with the law. 10. Veterans returning home now not only have PTSD but also traumatic brain injury (TBI) and both have the potential to put veterans who are returning home now in the same position as many of those who returned from Vietnam. Veterans' advocates have vowed to not let the same thing happen to this generation. 11. Veterans returning home now that are getting in legal trouble or facing substance abuse problems are usually those suffering from PTSD and/or TBI and veterans advocates are hoping to find some form, or forms, of traditional housing to help veterans that are going through treatment or have recently finished treatment and are attempting to fully integrate into civilian life. 12. Advocates believe that one way to encourage home ownership for those returning to a full civilian life is to allow the Cal-Vet program to give loans to veterans who would like to buy into LEHC. Page 4 COMMENT 1. Legislative Counsel advises that the ETP portions of this bill have chaptering conflicts with AB 119. 2. This ETP portion of this bill deals with the same subject matter as AB 3066 of 2009 (Assembly Veterans Committee), AB 1567 of 2010 (Assembly Veterans Committee). Both bills passed the committee without opposition, but were vetoed by the previous governor. AB 3066 was vetoed by the governor. AB 1567 was also vetoed and included the following message- "I appreciate the service and dedication our veterans have provided to California and strongly support providing them employment training and opportunities. However, ETP already supports employment training for military veterans and its annual strategic planning process already puts a strong focus on developing training projects and partnerships in the veteran community. As California continues to struggle in these difficult economic times, this bill would reduce ETP's flexibility to meet the changing needs of California's employers and workers." 3. The new sections of this bill deals with clean up language on cooperative housing as established by AB 1330 of 2009 (Salas) and AB 2087 of 2010 (Torres). AB 1084 of 2011 (Davis) added clean up language as this bill now does for cooperative housing. All of these bills passed the committee and the senate floor without opposition. 4. If CDVA is now going to administer co-operative housing, it likely needs to promulgate regulations. The department believes that this bill will give them the authority to do so. SUPPORT American Legion, Department of California AMVETS-Department of California California Association of County Veteran Service Officers California State Commanders Veterans Council Vietnam Veterans of America - California State Council Page 5 OPPOSE None received Page 6