BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 106| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 106 Author: Monning (D) Amended: 6/11/13 Vote: 27 - Urgency 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 SENATE FLOOR : 37-0, 4/29/13 (Consent) AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella, Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Knight, Lara, Leno, Lieu, Monning, Nielsen, Padilla, Pavley, Price, Roth, Steinberg, Walters, Wolk, Wright, Wyland, Yee NO VOTE RECORDED: Liu, Vacancy, Vacancy ASSEMBLY FLOOR : Not available 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 CONTINUED SB 106 Page 2 (Fund), contingent upon that agreement not requiring the state to repay or make payments on cash advances. This bill requires CalVet to develop and submit a State Veterans Cemetery Grant Program (Program) application to the United States Department of Veterans Affairs (USDVA) for the establishment of a veterans cemetery upon the determination of the State Controller (Controller), after consultation with the Secretary of CalVet (Secretary). This bill specifies that if the Secretary or CalVet fails to submit a grant application to the Program, if USDVA denies the grant application, or if the grant funding is not received for any other reason, requires any amounts donated, received, or deposited to the Fund by specified entities to be refunded. Assembly Amendments (1) require CalVet to develop and submit a Program application to USDVA for the establishment of a veterans cemetery upon the determination of the Controller, after consultation with the Secretary, that the Fund has adequate funding as specified; (2) specify that if the Secretary or CalVet fails to submit a grant application to the Program, if the USDVA denies the grant application, or if the grant funding is not received for any other reason, the amounts donated, received or deposited will be refunded or transferred as specified; and (3) add an urgency clause. 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. 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. CONTINUED SB 106 Page 3 4. Requires CalVet to develop and submit a Program application to the USDVA for the establishment of a veterans cemetery upon the determination of the Controller, after consultation with the Secretary, that the Fund has adequate principal to annually yield sufficient investment earnings from the date of the determination to cover the annual administrative and oversight costs and to fund the estimated costs of developing and submitting the application. 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. 3. Specifies that, if the Secretary or CalVet fails to submit a grant application to the Program, if the USDVA denies the grant application, or if the grant funding is not received for any other reason, require any amounts donated, received, or deposited to the Fund by specified entities to be refunded by the Controller to those entities, and makes an appropriation for the purpose of making those refunds. 4. Requires any amounts remaining in the Fund after making the refunds, if any, to be transferred to the General Fund (GF). 5. Contains an urgency clause. Background Central Coast State Veterans Cemetery . In 1991 the federal Base Realignment and Closure Commission recommended that the U.S. 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 - CONTINUED SB 106 Page 4 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 successful due to the ongoing administrative and oversight fiscal impact a state veterans' cemetery at Fort Ord would have on the state's GF. 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 CONTINUED SB 106 Page 5 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, Chapter 745, Statutes of 2012) (1) authorized 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; (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: Yes Fiscal Com.: Yes Local: No SUPPORT : (Verified 6/13/13) 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 6/14/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED SB 106 Page 6 CONTINUED