BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 543 (Wolk) - Veterans: Veterans' Home of California ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: May 5, 2015 |Policy Vote: V.A. 5 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 28, 2015 |Consultant: Maureen Ortiz | | | | ----------------------------------------------------------------- SUSPENSE FILE. Bill Summary: SB 543 consolidates the individual Veterans' Morale, Welfare and Recreation Funds at each veterans' home into one statewide fund that will be administered by the Department of Veterans' Affairs, but allows each home to establish a separate account for purposes of receiving donations. Fiscal Impact: Redirection of approximately $11.5 million from individual accounts to the newly created state fund (Special Fund) First year costs of approximately $418,000, and ongoing of $396,000 annually to the Department of Veterans Affairs (General Fund) SB 543 (Wolk) Page 1 of ? The Department of Veterans' Affairs estimates the need for four positions: 3 AGPA's and 1 Business Services Assistant, to promulgate rules and regulations, administer the new fund, and comply with the reporting requirements. Background: Existing law authorizes the creation of a Veterans' Morale, Welfare and Recreations Fund (MWR) at each veterans home. Revenue to the Veterans' Morale, Welfare and Recreations Fund is derived from many sources including proceeds from the California Veterans Homes Fund, operations of a canteen, revenue derived from the issuance of prisoner-of-war special license plates, monies collected from gold course green fees and range ball fees, donations, interest earned on invested funds, and funds derived from the estates of deceased members. Existing law authorizes the MWR funds to be used for the following purposes: a) Operating the Veterans' Home Exchange store, hobby shop, motion picture theater, library and band, as well as any other function that is operated for the morale, welfare, and recreation of the members of the homes. b) Paying for newspapers, chapel expenses, welfare and entertainment expenses, sport activities, celebrations, and any other activity that is for the moral, welfare, and recreation of the veterans. Existing law prohibits the use of the MWR funds for the following purposes: a) Medical or any related treatment. b) Maintenance of the home's physical plant. c) Any function, operation, or activity not directly related to the morale, welfare, or recreation of the veterans. Current law also provides that certain portions of the estates of deceased veteran residents may be recovered by the department for obligations owed for costs of the veterans care that are in excess of the reimbursements made by the USDVA. Any recovered funds are deposited in the MWR account at the home where the SB 543 (Wolk) Page 2 of ? veteran had resided. Proposed Law: SB 543 creates the Veterans' Home Morale, Welfare, and Recreation Fund (MWR Fund) and continuously appropriates the money in the fund. Additionally, the bill does the following: a) Requires the administrator of each veterans' home to deposit the balance of funds (as of January 1, 2015) in each homes' existing MWR Fund into the newly created statewide MWR Fund. b) Provides that all future moneys collected as a result of unreimbursed costs of care determinations are state funds and shall be deposited in the MWR Fund. c) Requires the Department of Veterans' Affairs (CDVA) to adopt regulations, in consultation with the resident council at each home, which will govern the process by which a home may make an annual request for a disbursement as well as the process for the CDVA to review the request. d) Requires the department to annually determine the total amount for disbursement from the MWR Fund to the home proportionally by each home's relative share of the total population of the entire veterans home system; but states that any moneys derived from golf course green fees, range ball fees, and operations of activities specifically at the Veterans' Home at Yountville will be credited to the MWR Fund allocation for that home. e) Authorizes the department to allocate an additional one time allocation of up to 5 percent of the home's annual disbursement for a special project if the home's administrator shows good cause for the allocation. f) Authorizes the department to increase the allocation from the MWR to the Veterans' Home at Yountville, as specified. SB 543 (Wolk) Page 3 of ? g) Allows the California Veterans' Board to review any special allocation as specified. h) Authorizes monies in the MWR fund to be used to operate a canteen, hobby shop, theater, library, bank, newspapers, chapel expenses, entertainment expenses, sports activities, celebrations, or any other function or activity that is related to the morale, welfare and recreation of the residents that would not otherwise be paid for from the General Fund. i) Prohibits the use of the funds for medical treatments, maintenance of the home, or any function, operation, or activity that is not directly related to the morale, welfare, or recreation of the residents of the home. j) Provides that appropriations from the General Fund may not be decreased due to the department's special disbursement of MWR funds to the Yountville Home. aa) Requires the CDVA to report annually on deposits to, and expenditures from, the MWR Fund. bb) Requires the department to maintain a reserve in the MWR Fund of $2 million. cc) Authorizes the department to transfer funds to the Surplus Money Investment Fund as specified. dd) Authorizes a home administrator to enter into an agreement with the Veterans' Home Allied Council that authorizes the council to operate facilities and engage in activities for the general welfare of the residents of the home. SB 543 (Wolk) Page 4 of ? Staff Comments: There are currently eight state veterans' homes which are located in Barstow, Chula Vista, Fresno, Lancaster, Redding, Ventura, West Los Angeles, and Yountville with a combined total of nearly 2,000 residents. Certain portions of the estates of deceased veteran residents may be recovered by the department for obligations for costs of a veteran's care that are in excess of the reimbursements received by the U. S. Department of Veterans Affairs. These recovered funds are not currently returned to the state General Fund, but are instead deposited into the MWR account at the home where the veteran resided at death. Other sources of revenue include: a. The estates of deceased residents, who die without heirs or owing money to the home for the cost of their care; b. Donations from taxpayers when filing their state tax returns (this provision ended in 2006); c. Revenues from the issuance of prisonerofwar license plates; d. Other private donations; e. Interest earned from investments made with MWR Fund moneys; and f. Revenues from businesses operated using the MWR Fund. A 2013 report by the State Auditor identified inappropriate use of the MWR funds. SB 543 will provide CDVA oversight over the collection and disbursement of the moneys. SB 543 (Wolk) Page 5 of ? Recommended Amendments: Staff recommends deleting the continuous appropriation in order to provide the Legislature with continued oversight of the funds through the annual Budget Act. -- END --