BILL ANALYSIS                                                                                                                                                                                                    Ó

                              Senator Ben Hueso, Chair

          BILL NO:  AB 717                   HEARING DATE: 6/11/13
          AUTHOR:   Chávez
          VERSION:  3/21/13
          FISCAL:   Yes
          VOTE:     Majority

          Veterans: California Veterans Board  

           Summary  :  Modifies membership qualifications for the California  
          Veterans Board, and changes the Board's function in relation to  
          the Department of Veterans Affairs (CalVet).

           Existing law:

                  Provides that the Board shall determine the policies for  
               all CalVet departmental operations.

                 Requires the seven-member Board to be appointed by the  
               Governor and confirmed by the Senate for four-year terms.

                 Requires members to meet the definition of "veteran"  
               contained in GOVT Code §18540.4.

                 Requires that five of Board positions be uniquely  
               defined and filled by individuals, who meet specified  
               categories of education, training, professional expertise,  
               or personal experiences.

          This bill:
                  Changes the Board's role from determining CalVet  
               policies to serving as an advisory body to the CalVet  


                  Repeals the categorical requirements for four of the  
               five Board positions that have eligibility defined by  
               educational or experience.

                 Requires that every Board member be a member in good  
               standing with a congressionally chartered veteran service  

                 Provides that nothing in the bill shall be construed to  
               prohibit any currently serving Board members from  
               completing their terms.

                 Requires the CalVet secretary and the Board to seek to  
               confer with the California State Commanders Veterans  
               Council at least twice per calendar year on issues  
               affecting California veterans.

           Existing Board eligibility requirements

           Government Code §18540.4.  "Veteran" means: Any person who has  
          served full time in the armed forces in time of national  
          emergency or state military emergency or during any expedition  
          of the armed forces and who has been discharged or released  
          under conditions other than dishonorable.

          Requires that all members of the board shall be veterans as  
          "veteran" is defined in Section 18540.4 of the Government Code.


                 One member to be retired from the active or reserve  
               forces of the United States military service.

                 One member to be a resident of a California veterans  

          AB 717 (Chávez)                                             2


                 One member to have substantial training or professional  
               expertise in mortgage lending and real estate finance.

                 One member to have substantial training or professional  
               expertise in geriatrics, gerontology, or long-term care.

                 One member to have an accounting or auditing background,  
               and preferably shall be a certified public accountant.

                 One member to have a degree in health care  
               administration or have experience in the financial  
               management of health care facilities.

                 One member to have substantial training, professional  
               knowledge, or experience in the issues faced by female  
               veterans which may include, but are not limited to, the  
               following issues:

                  o         Combat-related disorders;

                  o         Sexual trauma;

                  o         Homelessness.

          Mandates that the member of the board who is a resident of a  
          California veterans home shall be appointed for a term expiring  
          January 15 of an odd-numbered year. Subsequent appointments  
          shall be made on a rotational basis based on the age of the  
          home, beginning with the oldest veterans home with independent  

           Role of the Board  
          CDVA was established in 1921 to provide the State's veterans  
          with low-cost home and farm loans, assistance in obtaining  
          veterans' benefits, and various levels of care at three  
          residential facilities. To set policy for CDVA and provide  
          veterans a forum to appeal departmental decisions denying  
          services, the Legislature established the board in 1946. State  
          statutes give the Board broad policy-making authority over the  
          AB 717 (Chávez)                                             3


           The State Auditor released an audit in June 2003, which severely  
          indicted the Board. The audit report (2002-120) stated: 

          "(T)he Board of seven volunteers has established itself as an  
          ineffective policy-maker, unable to strengthen weaknesses in the  
          department's administration of veterans' programs that the  
          Bureau of State Audits (bureau) has reported over the past three  
          years. As an example of the board's inability to effect strong  
          policy, only half of its 32 policies provide direction for  
          departmental operations. Further, although the bureau and other  
          oversight agencies have identified a number of problems within  
          the department, the board has no clearly defined policies to  
          guide and monitor the department's corrective actions. The board  
          also has not used the services of the inspector general for  
          veterans affairs (inspector general) to review the department's  
          operations in areas where board policy could improve the  
          department's delivery of services to veterans."

          (The California Performance 2004 report on streamlining  
          government recommended that the board be eliminated and its  
          functions performed within a newly modified Department of  
          Veterans Affairs. Obviously, that elimination did not occur.)

          The audit report offered several recommendations to the Board.  
          The list included the following:

           1. "Assert its policy-making authority by actively identifying  
          areas of the department's operations that it feels need guidance  
          or direction and developing meaningful policies that provide the  
          department with the guiding principles necessary to complete its  

           2. "To enable board members to perform their policy-making and  
          oversight functions effectively, the board should provide  
          training to its members on the laws and regulations controlling  
          veterans' affairs; board policies, duties, and authority,  
          including how to conduct appeals; departmental operations; state  
          laws regarding open meetings; and state laws regarding the  
          privacy of medical information."

           California State Commanders Veterans Council
          AB 717 (Chávez)                                             4


           Fifty-plus years old, the Council is a group of 22 veterans  
          service organizations and other military-related entities. Its  
          mission is to evaluate pending state legislation affecting  
          California's veterans, whether active, reserve, National Guard,  
          or retired.

           Congressionally chartered veterans organizations  
          VSOs are non-profit organizations dedicated to supporting  
          veterans and their families. Some VSOs are congressionally  
          chartered and have legal federal recognition or approval for the  
          purposes of preparing, presenting, and prosecuting claims under  
          laws administered by the United States Department of Veterans  
          Affairs, as provided in Title 38 of the U.S. Code and the Code  
          of Federal Regulations.

          Among the better known congressionally chartered CSOs are the  
          American Legion, Disabled American Veterans, Veterans of Foreign  
          Wars, AMVETS, Marine Corps League, Order of the Purple Heart,  
          and Vietnam Veterans of America.

           Committee staff comments:
          1.Regarding requirements for board membership, the author  

               Currently the appointees to the CVB must represent very  
               specific professional areas including a mortgage expert,  
               aging care professional, auditor, and healthcare  
               administrator. These professional requirements were added  
               to infuse expertise into CDVA when the board was used to  
               establish operational policy, a practice which was retired  
               over forty years ago. Not only are these professions not  
               useful in fulfilling the job of an oversight board, but the  
               application pool is significantly restricted.

            In 2012, Board Chairman Thomas Moran testified before the  
            Senate Veterans Affairs Committee in opposition to AB 2548,  
          AB 717 (Chávez)                                             5


            which provides that one member of the Board shall have  
            substantial training, professional knowledge, or experience in  
            the issues faced by female veterans which may include, but are  
            not limited to, combat related disorders, sexual trauma, and  
            homelessness. Chairman Moran said that he was sympathetic with  
            the unique needs of women veterans, but that this legislation  
            eliminates the last general purpose position on the Board. He  
            said that the stringent qualifications required for the  
            various expertise positions severely limit the universe of  
            qualified candidates for Board service.

            In 2010, Governor Schwarzenegger vetoed a similar bill, AB  
            2784. He said:

               This measure would inappropriately interfere with existing  
               executive branch authority and usurp the deliberative  
               process. Furthermore, the additional requirements for  
               appointments to the California Veterans Board remove  
               administrative flexibility and prevent the most qualified  
               individuals from serving.

          2.With regard to the Board's role with CalVet, the author says:

               Current law states that the CVB sets policy for CDVA. This  
               has not been common practice in forty years as CDVA has  
               grown. AB 717 updates law to reflect current practice of  
               using the CVB as an advisory board to the Secretary.

           Related Legislation  

            AB 2548 (Mitchell, Ch. 205, Stats. 2012)
            This bill provides that one Board member to have substantial  
           training, professional knowledge, or experience in the issues  
           faced by female veterans who may include, but are not limited  
           to, combat related disorders, sexual trauma, and homelessness.

            AB 2784 (Comm on Veterans Affairs, vetoed, 2010)  
           This bill would have: (1) Expanded the Board to nine members.  
           (2) Required that two members of the board be appointed from  
           Operation Iraqi Freedom or Operation Enduring Freedom  
           (OIF/OEF). (3) Added mental health counseling to an aspect of  
          AB 717 (Chávez)                                             6


           qualifications that can be considered for appointing a member  
           of the board. (4) Prohibited the CalVet secretary from making  
           policy recommendations without first briefing the board.  (6)  
           Encouraged the Governor to appoint a member with expertise in  
           women's mental and physical health issues.

            SB 1387 (Comm on Veterans Affairs, Ch. 183, Stats. 2010)
            This bill: (1) Requires one board member to have a degree in  
           health care administration or experience in the financial  
           management of health care facilities. (2) Requires the board  
           member who is a resident of a veterans home to be appointed for  
           a term expiring January 15 of odd-numbered years.

            SB 164 (Johannessen, Ch. 220, Stats. 2001)
            This bill makes several reforms to streamline Board operations,  
           including changing the reporting requirements and separating  
           out the annual budget. CalVet provides support to the Board;  
           this measure ensures that adequate office space and meeting  
           space are also provided, and that there is easy access for  
           disabled veterans.

            SB 1411 (Johannessen, vetoed, 2000)  
           Nearly identical to SB 164 (Johannessen, 2001), this bill  
           contained an additional provision that triggered the Governor's  
           veto. That provision (not in SB 164) would have allowed the  
           Board to obtain the services of a part-time attorney, and would  
           have appropriated $25,000 to pay for the attorney's services.

          Sponsor:  Author.

          Support:  California State Commanders Veterans Council

          Oppose:   None on file.
          Analysis by: Wade Cooper Teasdale

          AB 717 (Chávez)                                             7


          AB 717 (Chávez)                                             8