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  :  79-0, 6/14/13 - See last page for vote


            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



           ASSEMBLY FLOOR  :  79-0, 6/14/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,  

                                                                CONTINUED





                                                                     SB 106
                                                                     Page  
          6

            Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,  
            Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,  
            Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,  
            Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell,  
            Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson,  
            Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas,  
            Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,  
            Wilk, Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Vacancy


          AL:k  6/17/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****





























                                                                CONTINUED