BILL ANALYSIS                                                                                                                                                                                                    



                                                                            



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                                    THIRD READING


          Bill No:  SB 106
          Author:   Monning (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE VETERANS AFFAIRS COMMITTEE  :  6-0, 4/9/13
          AYES:  Hueso, Knight, Block, Correa, Lieu, Nielsen
          NO VOTE RECORDED:  Roth, Vacancy

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


            SUBJECT :    California Central Coast State Veterans Cemetery at  
                      Fort Ord: Endowment Fund

           SOURCE  :     Author


           DIGEST  :    This bill provides the Department of Veterans Affairs  
          (CalVet) statutory authorization to enter into a financial  
          agreement to receive cash advances into the Endowment Fund  
          (Fund), contingent upon that agreement not requiring the state  
          to repay or make payments on cash advances.

           ANALYSIS  :    

          Existing law: 

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

           3. 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:

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

           2. Requires that the agreement is reviewed and approved by DOF.
                                           
          Background

          Central Coast State Veterans Cemetery  .  In 1991 the federal Base  
          Realignment and Closure Commission recommended that the United  
          States Army post at Fort 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.

          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.

          Subsequent legislative efforts to use the master development  
          plan to apply to the State Cemetery Grants Program have not been  

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          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.

          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, Chapter 291, Statutes of 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.

           Comments
           
          According to the author's office, AB 1842 (Monning, Chapter 745,  
          Statutes of 2012) was signed into the law by Governor Brown  
          during the 2011-12 Session, and stipulated that CalVet could  
          enter into financial agreements to receive cash advances in an  
          Fund to be used for purposes of constructing the Central Coast  
          State Veterans Cemetery at Fort Ord.  Upon signing the  
          legislation, the Governor's office requested two minor  
          clarifying changes to the code section to better explain the  
          provisions of the bill. 

          While the language contained in AB 1842 expressed that  
          California has no obligation of repayment on cash advances  
          received into the Fund, the clarifying language found in this  
          bill is more explicit and clear in relaying that the State of  
          California will in no way be required to repay or make payments  
          on cash advances.

          This bill also seeks to clarify that any agreement entered into  
          by CalVet to receive cash advances, is first reviewed and  
          approved by DOF.

           Prior legislation  .  AB 1842 (Monning) (1) authorized CalVet to  

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          enter into a financial agreement to receive cash advances in the  
          existing Fund previously created to help the proposed California  
          Central Coast State Veterans Cemetery at Fort Ord; (2) provided  
          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 DOF; and (3) authorized  
          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.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          SUPPORT  :   (Verified  4/22/13)

          American Legion - Department of California
          AMVETS - Department of California
          California Association of County Veterans Service Officers
          California State Commanders Veterans Council
          Fort Ord Reuse Authority
          Monterey County Board of Supervisors
          Veterans of Foreign Wars  - Department of California
          Vietnam Veterans of America - California State Council



          AL:k  4/24/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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