BILL ANALYSIS                                                                                                                                                                                                    






                        SENATE COMMITTEE ON VETERANS AFFAIRS
                              Senator Ben Hueso, Chair
                                               


          BILL NO:  SB 106                   HEARING DATE: 4/9/13
          AUTHOR:   Monning
          VERSION:  As introduced
          FISCAL:   Yes
          VOTE:     21




                                        SUBJECT  
          
          California Central Coast State Veterans Cemetery at Fort Ord:  
          Endowment Fund.
           
           
                                      DESCRIPTION  
           
          Existing law  : 

             Authorizes the California Department of Veterans Affairs  
             (CalVet) to enter into a financial agreement to receive cash  
             advances in the existing Endowment Fund previously created to  
             help the proposed California Central Coast State Veterans  
             Cemetery at Fort Ord.

             Provides that any such agreement is permissible so long as  
             no obligations of repayment are made to the state, and the  
             agreement is reviewed and performed in consultation with the  
             Department of Finance.

             Authorizes CalVet to use money received from the prospective  
             federal grant, which is transferred to the Fund, to reimburse  
             the costs of developing and submitting the grant application,  
             to reimburse any cash advances made to the Fund.


           This bill  :













             Provides that CalVet's statutory authorization to enter into  
             a financial agreement to receive cash advances into the  
             Endowment Fund is contingent upon that agreement not  
             requiring the state to repay or make payments on cash  
             advances.

             Requires that the agreement is reviewed and approved by the  
             Department of Finance.


           

                                          
                                     BACKGROUND  
          
           Central Coast State Veterans Cemetery
           In 1991 the federal Base Realignment and Closure Commission  
          (BRAC) recommended that the United States Army post at Ford Ord  
          be inactivated. The fort was closed in 1994. Part of the Base  
          Reuse Plan includes building a veterans' cemetery.  
           
          Traditionally, veterans' cemeteries have been federal  
          responsibilities, but as the last century came to a close the  
          federal government enacted a cost saving measure by offering to  
          build cemeteries but let states pay the maintenance costs in  
          perpetuity as was done with the now completed Redding cemetery -  
          California's first.

          The federal government has proposed the same agreement for the  
          California Central Coast State Veterans Cemetery at Fort Ord,  
          saying the federal veterans' cemetery at Gustine in the Central  
          Valley is close enough and has enough room to relieve Washington  
          of any obligation to build a federal cemetery on the central  
          coast.

          Under the federal Veterans Affairs State Cemetery Grants  
          Program, the federal government will fund up to 100% of the cost  
          of establishing, expanding, or improving state veterans'  
          cemeteries, including the acquisition of initial operating  
          equipment, if the state agrees to cover the administrative and  
          oversight costs in perpetuity.

          SB 106 (Monning)                                                  
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          Subsequent legislative efforts to use the master development  
          plan to apply to the State Cemetery Grants Program have not been  
          successful due to the ongoing administrative and oversight  
          fiscal impact a state veterans' cemetery at Fort Ord would have  
          on the state's General Fund.

          Once completed, the cemetery will serve all veterans, but will  
          be most convenient for the approximately 100,000 veterans and  
          their families living within the 75-mile radius, an area that  
          includes the counties of Monterey, Santa Cruz, San Benito and  
          half of Santa Clara.

          The estimated interment needs of that area's veteran population  
          are 5,600 burial and crypt sites for the initial 10 years. The  
          actual interment sites to be provided in this initial phase will  
          be approximately 2,800 burial and crypt sites.

          The Phase I plan will develop 26 acres of the site. At a  
          minimum, the cemetery will provide approximately 11,500  
          gravesites in its 20-year build-out.

          A federal grant program provides funds to build both initial and  
          follow-on phases, but the State of California is responsible for  
          maintaining the cemetery -- using moneys from an endowment fund.  
          AB 3035 (Laird, 2006) established an endowment to cover  
          maintenance costs -- prior to applying for grant funding for  
          construction. The endowment fund goal is $3.4 million. The  
          current strategy is to sell or lease a portion of the site not  
          required to meet burial needs for the next 100 years.

                                           
                                       COMMENT  
          
          1.Author comments (paraphrased)  : SB 1842 (2012) allowed CalVet to  
           enter into financial agreements to receive cash advances for  
           the California Central Coast State Veterans Cemetery at Fort  
           Ord Endowment Fund.

           The author introduced SB 106 at the request of the Governor's  
           Office. It clarifies that when CalVet enters into any financial  
           agreements to receive cash advances permitted by AB 1842, the  
           state shall not be required to repay or make payments on cash  
          SB 106 (Monning)                                                  
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           advances and that the agreement is reviewed and approved by the  
           Department of Finance.

          2.Committee staff comments  : At the end of the 2012 legislative  
           process, AB1842 generated minor concern that the language did  
           not clearly rule out the possibility of a state obligation to  
           repay a cash advance as if it were a loan. In response, the  
           author amended the bill, changing the "encumbrance" to become  
           "financial obligation." The author's office then stated, "There  
           will be no repayment obligation because any agreement with any  
           person or entity will be made with the foreknowledge that he,  
           she, or it will absorb the risk, which is why the last  
           amendment to this bill changed "encumbrance" to "financial  
           obligation."

           Some lingering doubt may have caused the author and the  
           Governor's Office to further clarify this point via SB 106.

          3.Related Legislation  :

            AB 1842 (Monning, Ch. 745, Stats. 2012)
            (1) Authorizes the California Department of Veterans Affairs to  
           enter into a financial agreement to receive cash advances in  
           the existing Endowment Fund previously created to help the  
           proposed California Central Coast State Veterans Cemetery at  
           Fort Ord. (2) Provides such agreements are permissible so long  
           as no obligations of repayment are made to the state, and each  
           agreement is reviewed and performed in consultation with the  
           Department of Finance.  (3) Authorizes CDVA to use money  
           received from the prospective federal grant, which is  
           transferred to the Fund, to reimburse the costs of developing  
           and submitting the grant application, to reimburse any cash  
           advances made to the Fund. Senate 37-0; Assembly 74-0.

            AB 629 (Monning, Ch. 267, Stats. 2011)
            Prior law required CDVA, in voluntary cooperation with the  
           Monterey County Board of Supervisors, the City of Seaside, the  
           Fort Ord Reuse Authority (FORA), and local agencies to design,  
           develop, and construct the California Central Coast Veterans  
           Cemetery at Fort Ord, as specified. The State Contract Act  
           requires projects that are not under the jurisdiction of  
           specified departments to be under the charge and control of the  
          SB 106 (Monning)                                                  
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           Department of General Services (DGS). This bill authorizes  
           CDVA, rather than DGS, to enter into an agreement with the FORA  
           for the veterans cemetery project to be under the sole charge  
           and direct control of the FORA. Senate 34-0; Assembly 78-0.


            AB 1757 (Monning, Ch. 450 Stats. 2010)
            (1) Requires the California Department of Veterans Affairs  
           (CDVA), in voluntary consultation with local governments and  
           stakeholders, to construct the California Central Coast  
           Veterans Cemetery at Ford Ord. (2) Authorizes CDVA to design,  
           develop, and construct the cemetery in phases. (3) Requires the  
           regulations established regarding burial eligibility to apply  
           to all state-operated veterans cemeteries, and limits burial to  
           dependent children of honorably discharged veterans. Senate  
           34-0; Assembly 76-0.

            AB 3035 (Laird, Ch. 291 Stats. 2006)
            Creates the California Central Coast State Veterans Cemetery at  
           Fort Ord Endowment Fund in the State Treasury and directs that  
           moneys in the Endowment Fund shall be allocated, upon  
           appropriation, to the Department of Veterans Affairs for annual  
           administrative and oversight costs of the cemetery. Senate  
           40-0; Assembly 79-0.

            SB 1815 (McPherson, Ch. 771, Stats. 2000)
            Ordered the development of the Central Coast Veterans Cemetery  
           Master Plan and appropriated $140,000 for the creation of a  
           Central Coast Veterans Cemetery Master Development Fund.   
           Senate 40-0; Assembly 74-0.




                                      POSTITIONS  
          
          Sponsor:  Author.

           Support: American Legion - Department of California
                    AMVETS - Department of California
                    California Association of County Veterans Service  
                   Officers
          SB 106 (Monning)                                                  
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                    California State Commanders Veterans Council
                    Monterey County Board of Supervisors
                    Veterans of Foreign Wars (VFW) - Department of  
                   California
                    Vietnam Veterans of America - California State Council


          Oppose:   None received
          
          Analysis by: Wade Cooper Teasdale































          SB 106 (Monning)                                                  
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